Post-Covid monetisation of fan engagement
Updated: Oct 8, 2021
Developing your own social audio or social video layer provides numerous monetisation opportunities during sports coverage, whilst giving fans the control they crave.
By Rory Squires SportBusiness April 28, 2021
Without fans in stadiums, clubs are looking for new ways to boost revenue streams, including investigating NFTs (Laurence Griffiths/Getty Images)
Sports fans have always been willing to pay a premium to enjoy real-time sports entertainment, whether the action has been viewed in-person at a stadium or at home via a paid-for media channel.
However, the growth of over-the-top (OTT) streaming in recent years has presented significant monetisation opportunities for sports rights-holders and media companies that have had to contend with a relentless behavioural shift away from traditional television consumption.
The latest research by We Are Social and Hootsuite found that, on average, seven out of every 10 internet users worldwide between the ages of 16 and 64 watch online streamed content every month. This translates into a significant revenue stream in sport and the wider entertainment sector.
Many sports rights-holders have already embraced sports betting as an opportunity to monetise their offering and engage fans. A 2019 survey by GlobalWebIndex found that 60% of US sports fans are more likely to watch a game if they have placed a bet on it.
The worldwide growth of in-play betting over the past decade has fuelled further opportunities via real-time engagement (RTE) platforms. However, the ultra-low latency and feed synchronisation on offer from providers like Agora is essential in order to maintain the integrity of placing wagers via an OTT service by allowing viewers to bet any time during the game, alongside friends who can be anywhere in the world.
With so-called rapid markets being increasingly common during sporting events – enabling bets to be placed at short intervals and in relation to events that are seconds away from happening – viewers can discuss and place wagers to enhance gamification and social elements.
There has been a surge of interest in tipping for content creators across many different digital platforms in recent years, with voluntary donations via a virtual “tip” jar becoming increasingly common on platforms that thrive on user-generated content (UGC) or professional UGC. The likes of YouTube, Twitch and TikTok already provide this functionality while to Vox, Twitter and Soundcloud are developing similar offerings.
Putting the viewer in control can reap financial rewards for the rights-holder or the OTT platform, which can share in the tipping revenue directly. This is illustrated by Patreon, which gives fans the chance to support financially the work of publishers with regular donations, and is expected to distribute more than $1bn to content creators this year.
The trend for voluntary financial contributions has led to the growth of platforms like WeShowUp, which invites viewers who have reserved a digital “seat” for an online comedy, theatre or entertainment show to “pay what it’s worth afterwards” rather than splash out up-front for a ticket. Other virtual concert platforms like Kumu – which is powered by Agora and is now the No.1 app in the Philippines – have also grown substantially.
In the context of a sports match shown via OTT, a tipping function can be used at various stages of the event by, for example, providing access to a pre-game or post-game talk show or a virtual tailgate party, allowing viewers to mingle digitally with others face-to-face in real time. Audience members will often tip to be mentioned on screen, or just to show their appreciation for the content.
Putting the viewer in charge can appeal to their basic desire to enjoy a more personalised experience. Research in 2020 by Verizon Media found that about one-third of sports fans are looking for more control over their live viewing experience.
Furthermore, introducing tipping as a reward mechanism for engaging viewers can lead to two-sided marketplace “network effects”, driving value that will lead to greater interest in the service and the creation of more high-quality content.
VIP premium subscriptions
In North America alone, between 2021 and 2026, revenues for subscription-based video on demand and advertising-based video on demand services are projected to increase by 35% to $54.4bn and by 140% to $32.6bn respectively, according to Digital TV Research.
However, the growth of live interactive streaming – also known as social audio or social video – has introduced an extra layer of RTE that presents an even more powerful proposition, as illustrated by the growth of social audio apps like Clubhouse and Locker Room.
Aside from basic subscription, sponsor and advertising-related income, there are opportunities to open up other income channels. Via interactive and live-streaming technology providers such as Agora, for example, rights-holders are given the option of charging viewers additional fees for ‘VIP’ access to special features on their own platforms as opposed to the usual social media networks like Facebook and YouTube.
Unique camera angles, interviews and exclusive behind-the-scenes footage, as well as ‘talk shows’ that are driven by UGC – providing virtual access to key figures and the opportunity to pose questions to them – can all be enabled as add-ons. This tallies with a broader trend that has seen mobile game operators, for example, enjoy significant financial benefits from users paying for so-called “skins” and additional features.
Ecommerce powered by AI and big data
With social video and OTT-based RTE, the integration of social media features into a rights-holder’s streaming platform generates numerous data feeds and data points.
Big data can build a detailed picture of a viewer’s habits, behaviours, interests and motivations, with artificial intelligence-driven algorithms providing highly targeted recommendations for advertising, promotions and customisable subscription offerings, as well as instantaneous ecommerce opportunities.
For example, viewers tuning in to watch a sporting contest have the opportunity to buy – at the click of a button – relevant products from the action, such as the playing kit or equipment on show. In addition, opportunities to make certain products available during such coverage can provide added value to sponsors who are also able to offer viewers their products and services.
Rights-holders can make a commission on every item purchased via this method and can also make their own services available for upselling, with the algorithms ensuring such offerings are relevant to the fan.
“This type of content recommendation engine is beneficial to all parties, considering the fact that the products and services presented to the viewer tally with their tastes, preferences and motivations,” says Brighton Shi, Senior Product Marketing Manager at Agora.
Therefore opening up new revenue streams with fans through RTE, focused around tailoring the fan experience and adding a social layer, all with the aim of personalising the output, is an exciting development for the sports ecosystem.
Research from Deloitte has shown that, across all sectors, customers are more likely to consider paying a premium for a customised VIP product or service.
Grasping this opportunity by deploying a variety of monetisation methods across social audio or social video sports coverage when fans are in “buying mode”, having often paid to access the basic coverage, can generate significant income for a rights-holder whilst delivering an enhanced viewing experience.
This article 1st appeared on SportBusiness.com HERE