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NBA Top Shot maker Dapper Labs is now worth $2.6 billion thanks to half of Hollywood, the NBA and Michael Jordan
From the early success of Crypto Kitties to the explosive growth of NBA Top Shot, Dapper Labs has been at the forefront of the cryptocurrency collectible craze known as NFTs.
Now the company is reaping the benefits of its trailblazing status with a new $305 million financing led by some of the biggest names in Hollywood, sports and investing.
The new round values the company at a whopping $2.6 billion, according to multiple media reports, and comes at a time when NFTs have captured the popular imagination.
Leading the company’s financing was Coatue, the financial services firm that’s behind many of the biggest later-stage tech deals. But heavy hitters from the entertainment world also took their cut — these are folks like NBA legend Michael Jordan as well as current players and funds including Kevin Durant, Andre Iguodala, Kyle Lowry, Spencer Dinwiddie, Andre Drummond, Alex Caruso, Michael Carter-Williams, Josh Hart, Udonis Haslem, JaVale McGee, Khris Middleton, Domantas Sabonis, Klay Thompson, Nikola Vucevic and Thad Young and Richard Seymour’s 93 Ventures.
Entertainment and music heavyweights including Ashton Kutcher and Guy Oseary’s Sound Ventures, Will Smith and Keisuke Honda’s Dreamers VC, Shawn Mendes and Andrew Gertler’s AG Ventures, Shay Mitchell and 2 Chainz also bought in on the action.
And from the venture world comes other strategic investors like Andreessen Horowitz, The Chernin Group, USV, Version One and Venrock.
The company said it would use the funds to continue building out NBA Top Shot and expanding the updated digital trading card platform to other sports and a broader creator community.
Top Shot has already notched over $500 million in sales for its animated trading cards featuring things like LeBron James dunking, and the sky (at least for now) is seemingly the limit for the collectible applications of blockchain.
It’s like the one thing that cryptocurrency can do really well and it’s been embraced far beyond the world of sports collectibles. The recent $69 million sale of a digital piece of art at Christies also marks a watershed moment for the art world.
“NBA Top Shot is successful because it taps into basketball fandom — it’s a new and more exciting way for people to connect with their favorite teams and players,” said Roham Gharegozlou, CEO of Dapper Labs. “We want to bring the same magic to other sports leagues as well as help other entertainment studios and independent creators find their own approaches in exploring open platforms. NFTs unlock a new model for monetization that benefits the fans much more than advertising or sponsorships.”
Powering the Top Shot system and Dapper Labs’ other offerings is a new blockchain protocol called Flow, which purports to handle mainstream consumer applications at scale, and can support mass adoption.
Flow also allows for transactions using fiat currency and credit cards, and provides a much needed ease of cryptocurrency, and can keep customers safe from the fraud or theft common in cryptocurrency systems, according to a statement from Dapper Labs.
Flow enables NFT marketplaces and other decentralized applications that need to scale to handle mainstream demand without extremely high transaction costs (“gas fees”) or environmental concerns, the company said.
“NBA Top Shot is one of the best demonstrations we’ve seen of how quickly new technology can change the landscape for media and sports fans,” said Kevin Durant, co-founder of Thirty Five Ventures. “We’re excited to follow the progress with everything happening on Flow blockchain and use our platform with the Boardroom to connect with fans in a new way.”
Already companies like Warner Music Group, Ubisoft, Warner Media and the UFC, as well as thousands of third-party developers, artists and other creators, are using the Flow mainnet to sell collectible cards and develop custodial wallets.
Additional investors in the round include: MLB players like Tim Beckham and Nolan Arenado; NFL players Ken Crawley, Thomas Davis, Stefon Diggs, Dee Ford, Malcom Jenkins, Rodney McLeod, Jordan Matthew, Devin McCourty, Jason McCourty, DK Metcalf, Tyrod Taylor and Trent Williams; team ownership, including Vivek Ranadivé (Kings); and notable sports investors Bolt Ventures.
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Postmates becomes the official on-demand food delivery partner of the NFL
The National Football League is naming Postmates as its very first on-demand food delivery partner.
In this context, a partnership means a multiyear sponsorship, which also makes Postmates a sponsor of the Super Bowl. And as the season kicks off with the Kansas City Chiefs hosting the Houston Texans, Postmates is teaming up with the Chiefs’ Patrick Mahomes (through his foundation 15 and the Mahomies) and the Texans’ Deshaun Watson, with each quarterback arranging for meal delivery to frontline health workers in their opponent’s home town.
This seems like a particularly appropriate year for a food delivery partnership, since most fans will be watching games from home, rather than at a stadium or their local sports bar, as the NFL’s vice president of business development Nana-Yaw Asamoah noted in a statement.
“Fans will be watching NFL football this season from their couch more than ever before, so teaming up with Postmates as the first official on-demand food delivery partner of the NFL was a perfect combination,” Asamoah said. “We’re excited for Postmates to bring an NFL experience directly to our fans’ doorsteps throughout the season and around the year.”
Postmates previously partnered with individual Major League Baseball teams, including the Dodgers and the Yankees. The food delivery company is also being acquired by Uber, in a deal that’s expected to close next year.
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Snapchat’s new Lens celebrates tomorrow’s NFL kickoff
Snap and the NFL recently announced a multi-year extension to their content partnership. Now, with the season starting tomorrow, they’re revealing more details about what kinds of content fans can expect to find on Snapchat.
For tomorrow night’s kickoff, they’ve created a special augmented reality Lens that takes fans from the Kansas City Chiefs’ locker room (the Chiefs are hosting the Houston Texans) through the tunnel and into Arrowhead Stadium, where they’ll be greeted by Kansas City’s Patrick Mahomes and Houston’s Deshaun Watson.
The Lens will be available nationally, and as regular games begin, it will transform into an entrance into a more generic NFL stadium.
After that, the NFL will be creating a highlight show that updates each game day, plus three weekly shows — “Rankings” (which offers historic NFL facts designed to encourage fan debates), “Mic’d Up” (a behind-the-scenes look at what coaches and players say during the games) and “Predictions.” The NFL will also continue producing “Real Talk with the NFL,” a show that highlights the league’s social justice initiatives.
Ian Trombetta, the NFL’s senior vice president of social and influence marketing, told me that all of this content is created by the league’s social lab in partnership with Snap. And while the NFL continues to see high ratings on traditional linear TV, he said Snapchat plays “a really critical role for us.”
Image Credits: Snap
“It’s always about: How do we engage new audiences, younger audiences, and do it in ways that are very authentic to the platforms?” Trombetta said. “We don’t look to do things that are just content dumps.”
Snapchat says that viewership of NFL content increased 80% during the 2019-20 season, and that 90% of viewers were under the age of 35.
Of course, it’s going to be a strange season. Like other professional sports organizations, the NFL has to test its players for COVID-19, and different teams are taking different approaches toward allowing fans in the stadiums — many games will be taking place without fans at all.
.@NFL launches @Snapchat AR portal celebrating tomorrow’s kickoff https://t.co/mOqNzfZ2wQ @TechCrunch @anthonyha pic.twitter.com/qRKWi282mD
— Russ Caditz-Peck (@RussCP) September 9, 2020
“The [NFL] organization is leaning on us more than they ever had,” Trombetta said. “We didn’t ignore the fact of what’s happening, anyone would be crazy to think we could totally shut that off. There has to be an acknowledgement of it, while also finding new ways, very seamless ways for fans to engage and celebrate rituals around games that they’ve established over years and decades.”
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With stadiums closed, TV networks turn to live esports broadcasts
The COVID-19 pandemic has wiped out the spring seasons for professional sports and associated revenue for TV networks, but esports is filling part of that void.
Gaming companies behind titles licensed by each major league are the winners in this unexpected shift; Electronic Arts (EA) is first among them with FIFA, Madden NFL, NBA Live and NHL in its EA Sports portfolio and more than 100 esports events planned for 2020. The way EA, networks and sports leagues are responding to production challenges in this crisis will reshape the esports market going forward.
Millions of people sheltering in place has created a breakout opportunity for esports broadcasting:
- A large portion of the internet-using population is at home 24/7, with screens as their main entertainment outlet;
- Sports fans have few competitive live events to watch;
- Broadcasters like ESPN, CBS, and Sky lost their most valuable content for attracting live viewers and need alternative content;
- Star athletes and non-sports celebrities are stuck at home with wide-open schedules.
In late March, 900,000 viewers tuned into Fox Sports for Nascar’s iRacing series, with 1.1 million watching in early April; the network has also broadcast Madden NFL tournaments with NFL commentators and athletes. ESPN is televising NBA players facing off against each other in NBA 2K (by Take-Two Interactive) and pro drivers (and other pro athletes like Manchester City striker Sergio Aguero) are racing each other in Codemasters’ F1 2019 game. ESPN has broadcast competitive play of non-sports games with League of Legends (by Riot Games) and Apex Legends (by EA) tournaments.
To be clear, ratings for these events have varied widely, but networks and game companies are rethinking how esports is broadcast, which will advance its pop-culture appeal.
Games adapting pro sports are best bridge to non-gamers
Esports is a massively popular activity with its own large piece of turf in pop culture, but it hasn’t secured a central role. Research firm Newzoo pegs the global audience of “esports enthusiasts” at 223 million. But unlike soccer and basketball, esports is siloed because it caters to viewers who are generally avid gamers. The action is extremely fast, so commentary by a streamer rarely helps outsiders understand what is going on enough to become engaged.
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In the age of social distancing, the LA Rams turn to Snap and Madden to unveil new uniforms
As the U.S. waits for the great reopening of its hallowed national pastimes in an era of pandemic-enforced social distancing, sports teams are increasingly turning to a new wave of digital tools like social media and video games to connect with a new generation of fans.
The Los Angeles Rams are the latest team to embrace the trend, choosing to work with social media giant Snap and EA Sports’ Madden NFL franchise to unveil the new design of their uniforms ahead of the opening of the most high-tech stadium in the National Football League later this year.
The team is working with Los Angeles’ own Snap to unveil the uniforms in a custom-created Snapchat augmented reality lens, featuring the ability to trigger players into action.
The revelation of the uniform in augmented reality, a decision brought about by social distancing measures put in place in California, is a first for any NFL team. The Rams franchise also collaborated with the Madden franchise to provide a sneak peak of the uniform through in-game renders of Rams players showing off the new look.
On Instagram, social media users can see interactive content of the uniforms in their new natural habitat before the stadium opens.
“We had been chatting about how to use AR for a while. Just across the board,” said Lexi Vonderlieth, the head of partnership marketing. “We were trying to figure out ways to bring the uniform to life and showcase that a bit and create something that was a bit engaging.”
From the world lens through Snap, viewers can see Jared Goff or Aaron Donald in their apartments, living rooms or backyards. Through the selfie view Snap users can put on the new jersey and Rams helmet.
The Los Angeles-based Snap has had a longtime relationship with the Rams — in part through proximity and in part through connections in the Los Angeles business world.
The unveiling of the uniforms, which happened earlier today, marked the first time that Snap had worked with a franchise directly instead of with the National Football League broadly.
Earlier uses of the Snap filters and camera this season came during the NFL draft itself — where Snap rolled out special cams as a way for fans to celebrate and represent their own teams.
The National Football League actually plays a prominent roll in the history of Snap lenses. The famous “Gatorade dump” tradition where the coach from the winning team in the Super Bowl gets doused with Gatorade by his players was one of the first lenses that Snap developed.
“We saw this incredible connection in how AR could engage,” said Snap senior director of global creative strategy, Jeff Miller. “Snap is a platform that is built for connecting with close friends and family. Sports passion is expressed through those kinds of connections.”
Snap, in some senses, is uniquely positioned to amplify the fan experience in a socially distanced sporting world. “[The technology] gives us an ability to create amazing experiences that can replace a physical activation, enhance it or give alternatives in a sport-from-home environment.”
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T2D3 Software Update: Embracing the Founder to CEO (F2C) Journey
Neeraj Agrawal
Contributor
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Neeraj Agrawal is a general partner at Battery Ventures.
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It’s been four years since TechCrunch published my blog post The SaaS Adventure, which introduced the concept of a “T2D3” roadmap to help SaaS companies scale — and, as an aside, explored how well my mom understood my job as an “adventure capitalist.” The piece detailed seven distinct stages that enterprise cloud startups must navigate to achieve $100 million in annualized revenue. Specifically, the post encouraged companies to “triple, triple, double, double, double” their revenue as they hit certain milestones.
I was blown away by the response to the piece and gratified that so many founders and investors found the T2D3 framework helpful. Looking back now, I think a lot of the advice has stood the test of time. But plenty has also changed in the broader tech and software markets since 2015, and I wanted to update this advice for founders of hyper-growth companies in light of the market shifts that have occurred.
Perhaps the most notable change in the last four years is that the number of playbooks for companies to follow as they sell software has expanded. Today, more companies are embracing product-led growth and a less-formal, bottoms-up model — employees are swiping credit cards to buy a product, and not necessarily interacting with a human salesperson.
Many of the most high-profile, recent software IPOs structure their go-to-market operations this way. T2D3’s stages, by contrast, focus quite a bit on scaling a company’s internal sales function to grow. Indeed, both a product-led and a sales-led approach are viable in today’s growing B2B-tech market.
What’s more, the revenue needed for a software company to go public has increased dramatically in the last four years. This means that software founders need to focus not only on building a scalable product and finding scalable go-to-market channels, but also building a scalable org chart. These days, what is scarce for software founders isn’t money from investors; it’s great human talent.
So in addition to T2D3, my firm and I are now focusing on another founder journey: F2C, or the transition from founder/CEO to CEO/founder. This journey can take many paths, but ideally it starts with the traditional hustle to find early product/market fit.
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Why Carbon just raised another $260 million
Two months ago, we reported that Carbon was set to raise up to $300 million, bringing the 3D printing company’s valuation up to a lofty $2.5 billion. The real numbers released this week by the company aren’t quite so lofty, but are impressive nonetheless. The Series E fetched $260 million, putting its valuation at closer to $2.4 billion.
The latest round follows a $200 million Series D that arrived in late-2017, bringing the company’s total raise to $680 million. What exactly is the bay area-based startup planning to do with that massive sum, in the wake of high profile manufacturing partnerships with companies like Adidas and Riddell?
CEO/co-founder Joseph M. DeSimone and recent addition CMO Dara Treseder (most recently of GE Ventures) stopped by our offices to discuss what the latest round means for the Bay Area-based company.
Asked for a timeline around when Carbon might exit, DeSimon offered a non-committal answer. “As we grow our business, we haven’t made announcements for our IPO or anything like that yet,” he told TechCrunch. But the revenue business is growing nicely. So we’re in pretty good shape.”
It’s hard to say precisely what goals the company is hoping to attain before going public, but at the very least, Carbon presents a good indicator that the 3D printing industry is back on the uptick — in some circles, at least.
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Live streams of karate and niche sports are terrifying major sports leagues
Of the 100 most-watched live telecasts in the US in 2005, 14 were sporting events; in 2015, sporting events comprised 93 of the top 100 telecasts. That shift occurred because TV shows are shifting to online or on-demand viewing, and live broadcasts of the biggest sports are the main thing TV networks have left to draw in live audiences. But the need to keep those sports on TV and off streaming services is only accelerating the rate at which young people are tuning into other sports leagues instead.
The rapid adoption of subscription video streaming services like Netflix and Hulu and of social live streams on Facebook, YouTube, and Twitch is enabling massive growth by sports leagues that you won’t normally see on TV. In the streaming era, more sports – and new types of sports like esports – keep thriving while interest in traditional pro leagues like the NFL and MLB declines.
OTT is where the growth is
The central narrative in the global film/TV industry right now is the response of incumbent companies to the growing dominance of Netflix, Amazon, and other streaming (aka “OTT” or over-the-top) services. The incumbents are merging to consolidate ownership of must-have shows onto a smaller number of new OTT services that will each be stronger.
The majority of American households have a Netflix subscription (i.e. access to one of Netflix’s 56M US accounts), another 20M have a Hulu subscription, the number of OTT-only households has tripled in 5 years, and 50% of US internet users use a subscription OTT service at least weekly. Almost one-third (29%) of Americans say they watch more streaming TV than linear TV, and among those age 18-29 it’s 54% (with 29% having cut the cord on linear TV entirely). People, especially young people, want to watch shows on their own time and on any device, and they get more value from a few $8-40 per month subscription platforms than a $100+ per month cable bill.
Meanwhile, social live-streaming platforms that got their start enabling people to either vlog or watch video gaming are expanding to all sorts of live broadcasting: Twitch averaged 1 million viewers at any given point of day in January, and there were 3.5 billion broadcasts over Facebook Live in the first two years after it launched (with 2 billion users viewing at least one).
We’ve hit the pivot point where media is streaming-first. Netflix is now the leading studio in Hollywood, spending $13 billion this year on content. Linear TV viewing is declining: every major cable network (except NBC Sports) has declining viewership and aging viewers. Between 2007 and 2017, the median age of primetime viewers on ABC, CBS, NBC, and Fox went up 8-11 years and are all in the 50s or 60s.
Major pro sporting events are the last bastion of TV networks because the dominant brands are, for the most part, only available live on TV. Beyond those, the only content getting large audiences to tune in simultaneously are a couple Hollywood awards shows and premieres or finales of a couple hit shows (Big Bang Theory and NCIS).
The exclusive broadcast rights to those live sports events – particularly the NFL, NBA, MLB, and top NCAA basketball and football games – are the last defense for major broadcast networks. They are the reason for younger Americans to not cut the cord. ESPN makes $7.6 billion per year in carriage fees from cable companies paying for the right to carry the main ESPN channel (the other ESPN channels add another $1 billion); that number is increasing even as ESPN’s viewership is declining.
Disney (ESPN’s owner) and other leading broadcasters don’t want to let people watch major sporting events online instead (at least not easily or cheaply) because doing so would pull the rug out from under their traditional revenue stream and OTT revenue (subscription + ads) won’t make up for it quickly enough. This problem is only exacerbated by the fact that TV networks are paying record sums for exclusive broadcast rights to top sports leagues out of fear that losing them to a rival could be a nail in their coffin.
This strategy is delaying, not stopping the shift in consumption habits. More and more young people are tuning out (or never tuning in) to the major pro sports on TV, and the median age of their audiences shows that: 64 for the PGA Tour, 58 for NASCAR, 57 for MLB, 52 for NCAA football and men’s basketball, and 50 for the NFL…and all are getting older. (Cable news networks, the other holdouts who are still doing well on live TV face the same situation: the average age of Fox News, MSNBC, and CNN viewers is now 65, 65, and 61 respectively.)
The major pro sports staying on linear TV has expanded the market opening for new sports to fill the open space with young people who mainly consume content online. In fact, a growing marketplace of different sports leagues (including esports) developing their own fanbases is an inevitability of the shift to OTT video as it lowers the barrier to entry to near-zero and let’s geographically dispersed fans unify in one place.
1. Lower barrier to entry for distribution
Lawn bowling is no longer your grandfather’s sports league. Mint Images/Getty Images
Niche sports leagues – or frankly, even big sports leagues that just aren’t at the scale of professional football, baseball, basketball, and hockey – have always had a hard time getting coverage on television. But you can produce and distribute video for an online audience more cheaply than for a television audience.
In fact with Facebook Live and Twitch, you can stream live video for free, and you can share clips across every social channel to attract interest. To launch your own OTT service or partner with an existing one, you don’t need to start with a massive audience from the beginning and you don’t need millions of dollars from sponsors just to break even.
Having signed over 150 new deals this year alone for its 20+ sports verticals (which will stream 2,500 live events in 2018), Austin-based FloSports has established itself as the go-to OTT partner for sports leagues with an established, passionate following that aren’t massive enough to garner regular ESPN-level coverage.
From rugby, track & field, and wrestling to bowling, competitive marching band, and ballroom dance, millions of Americans have participated in these activities in their youth and through clubs as adults but rarely see them on television. In fact, the rare instances when such sports are on TV – like their national championships – the league is usually paying large sums (potentially hundreds of thousands of dollars) for that airtime rather than getting paid by the broadcasters.
FloSports gives a home to the superfans of its partner leagues, with full coverage of the sport and commentary meant for real fans. It produces events in the manner best fit to highlight the action and turns superfans – who generally pay a subscription – into evangelists who recruit friends. There are numerous sports that have millions of participants yet no active, high-quality event coverage; those are underserved markets.
By tapping into this, FloSports properties (like FloWrestling, FloTrack, etc.) have gained hundreds of thousands of subscribers and created a surge of interest in teams like Oklahoma State’s wrestling team, which saw an 144% increase in live stream viewing and 68% growth in event attendance after joining FloWrestling (leading to them to set an all-time attendance record in the university’s basketball arena of 14,059 people). In the first half of 2018, FloSports’ various Instagram accounts collectively received 307M video views, more than the collective accounts of Fox Sports or of all NFL teams (and NFL Network).
2. Going global right away.
Johanne Defay of France at a World Surf League event. Mark Ralston/AFP/Getty Images
The top pro sports leagues have geographically concentrated fan-bases that fit the geographic restrictions of TV broadcasters, which end at a country’s border. Online streaming empowers sports that have large fan bases who aren’t geographically concentrated to aggregate in the digital sphere with enough eyeballs (and paying subscriptions) to drive engagement with the sport’s content through the roof.
Since being acquired in 2015 and renamed World Surf League, the governing body of professional surfing has developed a large global following – with 6.5M Facebook fans and 2.9M Instagram followers – through the launch of live streams and on-demand video on its website and mobile app, plus partnering with third-parties like Bleacher Report’s OTT service B/R Live. Only 20-25% of WSL’s viewers are in the US but since its competitions are streamed direct-to-consumer online, they were able to reach surfers around the world right away. After seeing WSL’s Facebook Live streams garner over 14M viewers in 2017, Facebook paid up to become the exclusive live-stream provider for WSL competitions for two years, beginning this past March.
3. Immediate data on audience engagement.
As with all offline-to-online shifts, OTT video streaming captures dramatically more data on audience demographics and engagement than television does, and it does it in real-time. This makes it easier for emerging sports leagues to partner with advertisers and show immediate ROI on their sponsorships, plus it informs their understanding of how to produce their particular type of sporting event for maximum audience engagement.
Karate Combat is a year-old league that builds off the existing base of karate participants and fans around the world (numbering in the tens of millions) with a new competition format specifically intended for OTT. The league allows full-contact fighting and sets the match in a pit (rather than a traditional fighting ring) for better camera angles. It also replaces the traditional focus on having a big in-person audience (which is expensive) and instead sets the fights in exotic locations (like the fight this coming Thursday night on top of the World Trade Center).
Like many emerging sports leagues, Karate Combat is vertically integrated: the league organizing the competitions is also the one producing and streaming the event coverage over its website, mobile apps, and social channels. This not only means it captures the content-related revenue from subscribers, advertisers, and numerous OTT distribution partners, but it sees every data point about fans’ viewing behavior and their interaction with various dashboards (like biometrics on each fighter) so they can optimize both online and offline aspects of the production.
4. Online means interactive
Jujitsu fighting is now an OTT service. South_agency/Getty Images
Online viewing creates the opportunity for functionality you can’t achieve with linear TV: interactive displays overlayed on or next to live video. Viewers can pull up and click through real-time stats, change camera views, or switch overlays (think the the yellow first-down line in NFL broadcasts or coloring around a hockey puck to help you track it on the ice). Ultimately, a more interactive experience means a more social and more entertaining experience (and the sort of deep engagement advertisers value too).
FloSports’ ju-jitsu live streams (FloGrappling) give subscribers multiple live cameras each covering simultaneous matches on different mats so they can click between them. This is a more personalized experience than passively watching one broadcast on TV and it gets that subscriber actively engaged, with their behavior providing valuable data points for FloSports and their deeper interaction likely more compelling to event sponsors.
The display might also highlight live comments from friends or friends-of-friends in order to draw viewers into a more social experience. Discussion of a specific live stream with others watching it has been a central feature for Twitch and Facebook Live and enables the league or team streaming the event to directly engage with fans around the world.
An exception to the OTT-first strategy may be in sports that are entirely new and have zero existing base of participants or fans. Karate, surfing, and video-gaming all have millions of passionate participants around the world, going back decades. A new league like the 3-year-old Drone Racing League (DRL), which has raised $21M in venture capital to develop the sport of competitive drone racing, has to artificially stimulate the development of a fanbase if it doesn’t want to wait years for grassroots competitions to create a critical mass of fans even for a niche OTT service. It’s unsurprising then that DRL has focused on striking TV deals with ESPN, Sky Sports, ProSiebenSat.1, and others to thrust it in front of large audiences from the start, like a new game show hoping its format will entice enough people to take interest.
Power is in the hands of the league owners
Ari Emanuel, chief executive officer of William Morris Endeavor Entertainment. Jonathan Alcorn/Bloomberg via Getty Images
The best position to be in right now is the owner of a sports league that’s rapidly growing in popularity. The competition for audience by both traditional media companies and tech platforms leaves a long list of distribution partners eager for must-have, exclusive content – especially content like sports events that fans want to want live together – and willing to pay up.
Moreover, vertical integration to control your fans’ content viewing experience and own your relationship with them has never been easier. There are direct subscriptions, advertisers, event sponsors, event tickets, a portfolio of possible OTT distribution deals, and merchandising. The potential revenue streams a league can develop are only more numerous when you add in launching a fantasy sports league – like World Surf League has done – and the recent nationwide legalization of sports betting in the US.
Endeavor, the parent company of Hollywood’s powerful WME-IMG talent agency, seems to have recognized this and is an early mover in the space. It bought two sports leagues that have relied on TV deals and event attendance revenue – UFC for $4B and the smaller but rapidly growing Professional Bull Riders for $100M – and, since they each own their content, launched direct-to-consumer subscription platforms (UFC Fight Pass and PBR Ridepass) for super-fans and cord-cutters. (Endeavor also paid $250M to acquire Neulion, the technology company whose infrastructure powers the OTT services of the UFC, PBR, World Surf League, and dozens of others.)
There’s opportunity for new streaming platforms focused on being the media partner for these emerging sports leagues. Inevitably, the opportunity for bundling will consolidate many of the niche subscriptions onto a small number of leading sports OTT platforms, and that’s a powerful market position for those platforms.
What is unclear is if they can defend themselves as the incumbent media and tech companies come around to this phenomenon and commit billions toward capturing the market. The leading sports broadcasting companies all have OTT offerings and want to make them as compelling to potential subscribers as possible even if they exclude content from the biggest pro sports. A larger company that can afford to spend huge sums on exclusive sports streaming rights (like Disney with ESPN/ABC, Comcast with NBC/Sky Sports, CBS with CBS Sports Network, or Discovery with Eurosport) might opt to buy a company like FloSports as part of their deep dive into the space or they might just aim to outbid them when a league’s contract comes up for renewal.
The hope for an independent OTT platform devoted to emerging sports leagues is they get big enough, fast enough that they can afford to keep winning the rights to emerging leagues as those leagues grow and offers from competitors bid prices up. These dedicated OTT services will likely have to secure long-term – think ten years – streaming rights deals or acquire control of some popular new sports leagues outright to hold their own.
Like online distribution triggered an explosion of digital publishing brands and social influencers for every imaginable niche, the rise of high-quality live streaming and subscription OTT services will allow a lot more sports leagues to build an audience and revenue base substantial enough to thrive. There’s more variety for consumers and resources than ever for those with a rapidly growing league to attract fans worldwide.
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EA apologizes for ‘unfortunate mistake’ of cutting Colin Kaepernick reference from ‘Madden’
EA became the subject of online scrutiny this week when it was discovered that the gaming giant deleted a reference to Colin Kaepernick on the soundtrack for Madden 19. The former 49ers quarterback was name-checked by rapper Big Sean on a verse of the YG song “Big Bank,” only to have the mention deleted. The track includes the line, “You boys all cap, I’m more Colin Kaepernick.”
The move was noted on Twitter this week and amplified by radio host (and Kaepernick’s girlfriend) Nessa Diab, along with Big Sean himself. The latter said the reference was deleted “like it was a curse word,” adding, “he’s not a curse, he’s a gift! Nobody from my team approved any of this.”
Oh!!!!! @EAMaddenNFL who told you to edit Colin’s name out???? @nfl ? @NFLPA Curious minds want to know
Thanks Jean for the info!!! If you guys see more shady stuff send it over. https://t.co/EIBQbaQ5SA
— NESSA (@nessnitty) August 2, 2018
Kaepernick became a leading figure in the Black Lives Matter movement after sitting and later kneeling during the National Anthem as a form of protest against black deaths at the hands of police officers. A number of NFL players have since followed suit, leading Donald Trump to call for the firing of players over on-field protests.
Hey Sean, no doubt we messed up here. We look forward to making it right. pic.twitter.com/taFXQ7UwBA
— EA SPORTS Madden NFL (@EAMaddenNFL) August 3, 2018
In a statement to TechCrunch, EA called the deletion “an unfortunate mistake,” chalking up the move to confusion of relating to player rights:
We made an unfortunate mistake with our Madden NFL soundtrack. Members of our team misunderstood the fact that while we don’t have rights to include Colin Kaepernick in the game, this doesn’t affect soundtracks. We messed up, and the edit should never have happened. We will make it right, with an update to Madden NFL 19 on August 6 that will include the reference again. We meant no disrespect, and we apologize to Colin, to YG and Big Sean, to the NFL, to all of their fans and our players for this mistake.
NBC Sports notes, however, that this is apparently not the first time Kaepernick’s name has been removed from a Madden soundtrack. While the player’s likeness appeared in last year’s version of the game, his name was apparently also removed from the Mike WiLL Made-It track, “Bars of Soap.”
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CBS to stream NFL games on mobile
CBS today announced an expanded agreement with the NFL which will allow it to stream NFL ON CBS games through its over-the-top service, CBS All Access, through 2022. The deal includes, for the first time, rights to stream the games on mobile devices. The changes will begin this season, and will additionally include the ability for TV Everywhere subscribers (those who have an existing pay TV subscription) to stream the games on mobile, too.
According to the network, the entire 2018 NFL ON CBS season, including Super Bowl LIII, will stream live on CBS All Access across all platforms. This includes not only mobile devices and the web, but also on media streaming devices like Roku, Apple TV, Chromecast, Android TV, Fire TV, and game consoles like Xbox One and Playstation, plus Samsung Smart TVs.
The games will also be available to those who chose to subscribe to CBS All Access through Amazon’s a la carte TV service, Amazon Channels.
CBS already had streaming rights to NFL games, starting in the 2016 season. But Verizon [disclosure: TC parent by way of Oath] held exclusive mobile streaming rights to games until their deal expired with the 2017 season. That change has broadened access to NFL games on mobile.
For example, Fox’s multi-year deal for Thursday Night Football also included mobile rights, Variety reported. Verizon is now streaming games through Yahoo, Go90 and other properties on mobile. And NBCU and ESPN have Sunday and Monday Night Football deals that involve mobile streaming, the site also noted.
For the NFL, it needs to broaden access to games on mobile devices to address issues with lower ratings that’s, in part, attributed to cord cutting.
And for CBS, access to the games on mobile could give its streaming service a boost in the wake of what may be slowing growth, and the mistake of putting too much pressure on the “Star Trek” prequel to deliver subscribers. “Star Trek: Discovery” has underwhelmed some fans, leaving it with a 4.7 out 10 user score on Metacritic, and a lot of negative reviews on IMDb.
In other words, CBS can’t count on those core Trek fans to subscribe to All Access just to watch the new show, as it may have hoped.
Bringing in NFL fans could help with sign-ups – as will being available on Amazon Channels, which accounts for some 55% of direct-to-consumer subscriptions, according to reports.
“We are excited to extend our partnership with CBS as it aligns perfectly with our goal of providing NFL fans with greater opportunities to watch NFL games across digital devices,” said Hans Schroeder, Chief Operating Officer of NFL Media and Business, in a statement about the CBS deal. “The 2018 season will mark a new era for NFL fans with unprecedented access to NFL games across digital platforms.”
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