67 XTREME Sport and Data
or decades, the business of sport has relied on four main revenue streams: broadcast, sponsorship, ticketing and merch, and there is a reason for that. Sport has something very rare – endless live content. Like religion, sport is passed down from generation to generation, and in many families it is often considered a sacrilege to support a team that rivals the one from your hometown. But now sport is everywhere. Families from all over the world can be devoted to a team that is a thousand miles away. Last year, a combined 3.572 billion viewers – more than half of the world’s population aged four and over – tuned in to watch the official broadcast coverage of the Fifa World Cup in Russia. Global distribution of sport content has peaked, and a new age in the field is approaching. “Technology is coming into this space for the first time and it’s changing not only the way athletes perform, but the way we consume and produce sports,” explains Angela Ruggiero, 1998 Olympic Ice Hockey Gold medallist and CEO and co-founder of Sports Innovation Lab. There is a new type of fan emerging. Ruggiero calls it the ‘fluid fan’, someone who is open to change, empowered to choose and continuously evolving – that’s Sports Innovation Lab’s three-legged stool. The challenge is, if the fluid fan is continuously evolving, they might not be around tomorrow. “You have to constantly refresh your content and engage by investing in new technology,” explains Ruggiero. “They may never have watched cable or subscribed to pay TV. They’re fans that consume sports via digital or social platforms.” Ruggiero saw this shift by observing what was happening to other industries. “In 2015, Disney’s Bob Iger bet on ESPN and admitted that, for the first time, there was a decline in cable subscribers. “Parallel to this, I was on the board of the Olympic Channel, the International Olympic Committee’s (IOC) single largest ever investment. It was our attempt to go direct to the consumer, to make an OTT
DIE HARD 2.0 Sports Innovation Lab is a company that looks at the entire sports technology ecosystem and helps clients better understand technology and trends. “The traditionalists are still watching sports on TV – we call them the diehards – but they will likely have a second screen in their hands. Even the most avid fans only spend 11% of their time actually watching sports. The industry isn’t just competing for wallet share anymore, it’s competing for time share.” Ruggiero tells us that the diehards aren’t going away, but there is an increasing shift towards the fluid fan. Depending on the sport, geography and personal history, there are entire leagues being built upon the fluid fan, which could usher in a new age for sport. The fluid fan may not necessarily be enthusiastic about the sport content or be riveted to the actual competition. They like the shoulder content – content that might allow them to get to know the athlete on a personal level. For example, you might be obsessed with a musician because of their celebrity, but you don’t like listening to their music. “The diehards are still consuming sports in traditional ways, but that demographic is getting older, and if any good business wants to capture that next generation consumer, that next generation fan, they have to understand how they want to consume content,” adds Ruggiero. For the most part, fluid fans are younger, but they don’t have to be. They could be a casual fan who historically hasn’t been treated the right way.
platform that would allow us to connect to our fans outside the Olympic games,” she says. Ruggiero was also attending Harvard, where she studied disruption to learn more about how tech was shaping her industry. “I saw the whole sports industry, this, in my opinion, archaic industry – that hadn’t evolved much and was unable to move forward because it didn’t understand tech.” She laments there was no one who had a deep subject matter expertise in technology, that the industry could turn to. “It just didn’t exist, and there were these large boards and committees literally betting on the future, including the IOC. “We’re making our plans, we’re looking at innovative ways to engage with fans, but with little understanding about what media will look like in a few years. Media is the largest revenue driver in the sports industry, and if that changes, then everything else underneath it will change.” As a solution, Ruggiero co-founded Sports Innovation Lab with Josh Walker. Walker had previously founded Forrester, a research company that determined technology’s impact across various different industries.
MEDIA IS THE LARGEST REVENUE DRIVER IN THE SPORTS INDUSTRY, AND IF THAT CHANGES, THEN EVERYTHING ELSE UNDERNEATH ITWILL CHANGE
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