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The sports industry has seen a profound transformation in its diverse fan bases, driven primarily by technological evolution and changes in consumer behaviours, partly influenced by COVID-19.
In the past, the bond between fans and teams was solely dependent on physical presence in stadiums and the enjoyment of events through traditional media. However, with the advent of social media, streaming platforms, and immersive new technology, the interaction between fans and sports has altered dramatically.
According to analysis by global consulting firm AlixPartners, more than 95% of GenZ fans born between 1997 and 2012 use social media to interact with sports content, while more than 60% of young people under the age of 24 prefer to engage in video games rather than watch video content. In addition, most GenZ fans are more likely to play video games while watching sports than fans of previous generations.
“Generation Z uses social media and streaming platforms like YouTube, Twitch, and Instagram to watch sports content, including live coverage, interviews, and match highlights. Growing interest amongst fans in video games, even in conjunction with a sporting event, and the increasingly limited attention of the new generations represents a new challenge for leagues, sports clubs, and the traditional media,” explains Edoardo Persenda, Senior Vice President of AlixPartners’ TMT Practice.
“Today’s fans expect increasingly personalised and interactive experiences, similar to those offered by social media or video games, and are looking for more realistic, immersive, and surprising gaming experiences.”
CHALLENGES AND RISKS
This fan-base evolution brings with it several risks for the companies that are unable to adapt to these new market dynamics.
“One of the most obvious dangers is the loss of fans to other sports or entertainment, which in turn would entail significant economic risks, including reduced ticketing, merchandising, and sponsorship revenue, as well as less advantageous television rights revenue. The impact also affects the ability to attract new investors and talent, weakening bargaining power with partners and suppliers,” says Roberto Jona, Consultant at AlixPartners.
A reduced fan base not only results in lost revenue from physical attendance at matches (ticketing and merchandising) but, more importantly, leads to a significant decrease in online traffic and digital interactions, impacting brand value for sponsors looking for visibility and engagement to recoup their sizeable investments.
Another challenge for “traditional” industry stakeholders – leagues, clubs, traditional media, and betting agencies – is the redoubling of new technologies, platforms, and communication channels. The surfacing of new “players” in the industry (such as Twitch, which has become a major platform for live streaming sporting events and exclusive content, and Sorare, the blockchain-based platform where users buy, sell, and trade digital player cards, allowing them to interact with the world of football in a completely new way using NFTs) is leading to the development of go-betweens with the fan base, risking a compromise of the direct relationship with their fans and customers, which is fundamental to monetising the data and information from them.
OPPORTUNITIES AND ROADMAP TRANSFORMATION
According to AlixPartners, the evolution of fan characteristics presents an opportunity for the companies that understand and embrace this change.
“To avoid the contraction and intermediation of their fan base and to maximise value creation through data monetisation, companies in the industry will need to protect and develop their direct relationship with fans, which is needed to understand and profile their characteristics. They must develop a new multichannel strategy – physical, digital, and multimedia – by creating new content enabled by emerging technologies. For their strategy to succeed, they must first understand fans' facets and desires, and then respond to them across all channels in complementary and consistent ways”, Persenda points out.
With this in mind, some sports clubs, teams, and organisations increasingly invest in proprietary digital content to establish a direct relationship with their fans – this will obtain the first-party data that is essential for profiling and customisation of offers to maximise revenues. Organisations are redefining how they interact with their audiences, from interactive engagement programs on social media and streaming platforms to fan-exclusive events.
Sports leagues and clubs around the world are evolving their strategies to adapt to new fan behaviours and expectations, taking advantage of the spread of immersive technologies, such as virtual reality, digital assets like NFTs, and new interaction platforms, which are all revolutionising the way fans interact with sports and their teams.
Many of the new initiatives undertaken by clubs to strengthen the bond with the fans leverage the physical channel, enriched with digital and multimedia experiences, such as the Barcelona “Total Xperience”, a physical tour that includes several multimedia experiences, including access to the immersive room “Spotify Camp Nou Live” and the “Barça Virtual Dream”, where you can dive into Barcelona’s virtual universe, experiencing the feeling of being one of the players.
In addition to stadium entertainment, some sports clubs want to expand their audience through immersive experiences outside sports venues, thus reaching more fans. One example is the NBA House, a four-day pop-up experience that takes place in cities such as New York, Paris, and Beijing. This event features interactive games, gaming areas, meetings with NBA legends and contests with official prizes, attracting thousands of fans. These initiatives allow clubs to engage people even away from stadiums, offering unique experiences accessible to a much wider audience.
Social media content created by athletes is also one of the main levers for engaging younger audiences. This generation follows athletes not only for their performance but also for their personalities, values, and off-field activities. Sports leagues recognise this potential, as demonstrated by the NFL hiring over 1,000 influencers to promote the league and MLB partnering with stars like “Ambassadors” on social media. Behind-the-scenes content, glimpses of everyday life and exclusive broadcasts, such as those produced by some football clubs or the Netflix series “Formula 1: Drive to Survive”, have become essential tools to retain and transform casual viewers into committed fans.
Expanding into parallel markets such as e-sports and gaming is a further opportunity. This fast-growing industry offers new avenues for fan engagement and revenue diversification through sponsorship, merchandise sales, and digital content. Some significant examples are the Philadelphia 76ers, a famous NBA team that acquired Team Dignitas, a professional e-sports organization, and the NFL, one of the first sports leagues to offer a game in “virtual reality”, betting on the future adoption of VR devices to engage new generations of fans around the world like never before.
This article was originally published in Italian on calcioefinanza.it:
https://www.calcioefinanza.it/2024/10/10/alixpartners-come-cambia-il-tifo-nello-sport/