THE FUTURE OF SPORTS CONSUMPTION
How young adults are changing fan engagement, evolving the sports consumer experience.
Sports naturally change; the forward pass, the three-point line, instant replay. So too does the way we consume sports; luxury suites, cable tv, 24/7 sports news, betting apps - the list goes on. In the past decade alone, we witnessed significant changes to the way Americans consume sports. The sports consumer experience is evolving, driven by changes in fan engagement by young adults. With dwindling attention spans, a never-ending pandemic, and the rise of legal sports betting across the US, what does the future hold for the way we consume sports?
Continue reading for our POV on the evolving landscape of sports consumption.
Attendance at professional and collegiate sports took a devastating blow in 2020. Tokyo rescheduled the Summer Olympics, athletes played in mostly empty stadiums, and entire seasons were truncated or canceled altogether. Lingering throughout was the challenge of in-person spectators, balancing high demand with public safety. American leagues took varying approaches. The NBA and NHL adopted an isolation strategy, using ‘bubbles’ to protect players and staff while viewers watched from home. NCAA Football and the NFL started with empty stadiums, only to give way to political and societal pressure, opening at least a limited capacity of stadiums to eager fans.
Meanwhile, in 2021, Olympic officials closed the Tokyo Summer Olympics to outside spectators and the expectation is the same will be true for the 2022 Winter Olympics in Beijing. While vaccines are rolling out across the globe, sports fans are receiving conflicting messages about the safety of returning to sporting venues. In May, the CDC advised that vaccinated people could largely return to their pre-COVID activities. But, health experts still highly recommend social distancing and mask mandates. As sports teams look to draw fans back to seats, they have to battle perceived risk with effective safety and sanitization protocols.
There is no doubt fans are ready to return to stadiums and arenas, and the NFL and NBA are listening. According to a Nielsen study released last month, 80% of fans are ready to attend a live outdoor sporting event and 79% are ready to attend a live indoor sporting event this fall.
To welcome these eager fans, teams are varying their approaches to entry based on local mandates. The NBA is a good example considering the recent start of the season and the indoor environment. State Farm Arena, home of the Atlanta Hawks, is following the guidelines we’ve come to expect, proof of vaccination or a negative test within a certain timeframe. They further encourage face coverings in all areas.
Meanwhile, New York Knicks fans can only enter Madison Square Garden with proof of full vaccination. In August, New York City enforced a strict indoor venue vaccine mandate. This extends to both employees and guests at New York City restaurants, gyms, and entertainment venues like sporting arenas and concert halls. As the 2021 NBA season unfolds, it will be interesting to monitor how mandates across the country will impact attendance, health, and viewership.
One aspect most stadiums and arenas are adopting is cashless environments. Both arenas mentioned above will only accept credit card and mobile payment options to reduce the exchange of cash. The use of connected technology, from payment to content delivery, will be a legacy of post-COVID sports consumption.
As sports teams work their way back from socially distanced protocols, they will inevitably look for ways to bring sports fans closer together. Stadiums and arenas are evolving into community-driven entertainment hubs that appeal to casual and die-hard fans alike. One need only look at the most recent professional arenas like SoFi Stadium, the Chase Center, or UBS Arena. Wider pedestrian-friendly concourses, open areas designed for gatherings, and technology at every corner are the staples of the latest modern coliseums.
The teams that succeed at the ballpark are the ones who best cater to fandom trends that foster a lifetime relationship that meets the needs of the fan at every segment of the demographic spectrum, in turn maximizing lifetime value.
As audiences mature, their interests change and grow. Consider a child and a teen at an NBA game. What impact does an active mascot, a kids’ area, or social media touchpoints have on their viewing experience? How about a young adult versus an older one with a family? How can cheerleaders, access to game statistics, merchandising, and special deals for families improve their day and affinity for your brand? The in-game experience must connect with fans’ interests regardless of age to keep them involved and coming back.
Interested in how you can cater to the trends that will turn fair weather fans into lifelong die-hards?
Generation Z started shaking up the media and entertainment world before the onset of the pandemic. COVID-19 simply accelerated trends that have been gaining steam over the last five to ten years. The TikTok generation doesn’t have the attention span and more importantly the desire to commit to a full professional sports game. The younger demographic is tuning in for the last few minutes of a close game and catching up on highlights on their phone via YouTube, Snapchat, and TikTok. Simply put, people 18-49 are watching ⅓ as much TV as they did 7 years ago.
Gen Z isn’t lost completely though. According to data from ESPN, 96 percent of 12 to 17 year olds still identify as sports fans. The issue, however, is that the number of avid fans in this bracket dropped from 42 percent in 2011 to 34 percent in 2020. This has repercussions on both revenue and the future of sports. Think of an avid sports fan you know. How many jerseys do they own? How many games do they go to every year? Further, college and sports leagues alike covet lucrative TV deals that drive revenue. It’s speculated nearly
half of the NFL’s revenue, nearly $15 billion, is derived from TV contracts. But according to research conducted by Two Circles, ”the value of short-form video will increase more than 100 percent in the next four years, compared with 18.7 percent growth for live rights. But the overall value of live rights still will be $39.1 billion in 2024, dwarfing the $3.2 billion valuation of short-form videos.”
If leagues like the NFL and MLB don’t capture these young fans early then how will they attract them a decade from now? Teams and leagues are scrambling to build out their short-form content in an effort to capture young fans early rather than risk losing them forever. As the NFL’s CMO, Tim Ellis, remarks “there’s no strategy for bringing in a 35-year-old fan for the first time.” The NFL, NBA, and ESPN expanded their content deals with Snapchat in 2020 to triple the number of highlights offered and “increase the speed in which users can share and consume breaking news.”
Short-form content and streaming apps are the future of sports viewing. Augmenting the at-home experience with instant analysis, real-time game stats, up-to-the-minute highlights, and virtual reality will bring fans closer to the action than any stadium experience. Immersive technology is popping up everywhere, but Amazon might be at the forefront of the experiment. Since 2020, Amazon Prime members have had the option to watch Thursday Night Football with X-Ray Functionality where stats like running speed, time to throw, and trivia are presented on screen.
“We developed a wall-to-wall lineup of exclusive features and original content from across Amazon that prioritizes real-time data and insights provides expert analysis, and gives fanatic and casual football fans alike access to more games, more talent, and more options than ever before.” - Marie Donoghue, VP of Global Sports Video, Amazon
Viewers can further rewatch top plays in real-time or listen to their choice of commentator pairings. Amazon also leverages original, exclusive content on Twitch to engage with fans in the week leading up to Thursday Night Football. This multi-channel approach should be a case study in blending short-form content, immersion, and live sports for today’s audience.
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The recent legalization of sports betting in nearly half the country plays into the changing landscape of sports consumption, if not directly shaping the landscape. Network content is geared more and more to betting lines and over/unders. Americans watching TNT can bet against the ”Charles Barkley Guarantee” and viewers of Fox can try to ‘Win Terry Bradshaw’s Money”. Meanwhile, podcasts and content creators generate betting content daily. The popular media giant, Barstool Sports, recently launched a gambling app, Barstool Sportsbook, officially consummating the integration of media and sports betting.
The rise in popularity of offerings like NFL Red Zone, fantasy sports, and market-leading bettings apps DraftKings and FanDuel further highlight the changing landscape. This landscape is projected to grow sixfold in the next two years. According to a recent NY Times article, the betting market generated $1 billion in revenue in 2020 and if “betting becomes legalized in all 50 states, estimated revenues will exceed $19 billion a year. New multibillion-dollar marketing niches will expand as media and tech startups compete for consumer attention.” PriceWaterhouseCoopers and the National Gambling Impact Study Commission are far less conservative, estimating $100 billion and $400 billion respectively.
How close are we to legalized betting in all 50 states? Sports betting is live and legal in 29 states and the District of Columbia. Three states, Wisconsin, Nebraska, and Maryland, legalized sports betting recently and are nearly operational. Massachusetts and Ohio have active legislation and will likely see complete legalization in 2022. The outlook for the remaining states varies depending on pending legislation, but many experts agree that over 90% of the U.S. adult population will be able to legally bet on sports in their state by 2025.
The nature of sports betting plays right into the shorter attention spans and short-form content consumers are looking for, especially Generation Z. Sports bettors are disproportionately young, single men under 35 years old. With 24/7 sports media and content pumped directly to their phones, the 18-35 age demographic will be the primary driver of the rapidly growing betting industry. Media companies, advertisers, teams and leagues, sports bars and restaurants, can all tap into this booming space.
But who are they and how do you reach them?
The evolution of sports consumption is accelerating. Advances in technology, changing behaviors, and external pressure, like that caused by COVID-19, make impactful data that much more time-sensitive. Stakeholders need to stay in step with the latest trends and preferences or risk falling behind. Targeting younger demographics might not deliver the greatest return today, but committing to the new consumption behaviors of Gen-Z and young Millenials will build a strong foundation for fandom of future decades.
Whether you’re in the sports attendance, viewing, or betting space, MMR Research Associates is your partner to deliver confidence in decision making.