“How can you not be romantic about baseball?” — Billy Beane, Moneyball


The noise

  • NBA launches NBABet Stream, focusing on the sports betting market
  • Warner Music Group acquires viral media firm IMGN Media for reportedly US$85M
  • Penn National Gaming acquires a 36% interest in Barstool Sports for US$163M (Q1 2020)


The signal

All three headlines are about one thing, and one thing only, engagement. In a world where people see a thousand different things for a fraction of a second, it isn’t the view that counts, it’s the quality of the view.

What is a quality view? For years sports has embodied what it means to have a quality view. Whether you’re a Leafs, Raptors, ManU, Mets, or Raiders fan it doesn’t matter. What matters is that you care. You’ve battled traffic to get to a bar to watch the game because for some reason it’s blacked out on your local cable. You’ve driven through snow, jumped on a plane, and sat through sleet in the 4th quarter drenched and cold. You’ve donned your Dolphins jersey, even though the Dan Marino days are long gone, for a picture with your buddies and a memory that will last a life time. Why? Because it’s a part of you.

For years sports has grown to help define us. Even if we ‘don’t care about sports’, the immense social pressure pulls us in. Don’t agree with me? Look around your office during March Madness or look at the streets of Toronto after we won the crown in basketball last year. Even people who self-declared ‘didn’t care about sports’ saw sports become a big part of their life, their thoughts, and their social circle. These people were willing to spend $1,000s of dollars on tickets to be ‘in the room’.

This is what makes sports different from scripted shows. Consumers actively seek out sports content. There is no discovery problem. The social component of sports converts it into an ‘event’ to be shared and enjoyed with friends and family. Sports also is quite different from other forms of content in the degree to which variables like data or statistics are used during the broadcast. Also, the degree to which technology can add to the viewing experience and engagement levels is significantly greater for sports (multiple camera angles, projection of trajectories, multiple expert feeds/real-time opinions, etc.) The bulk of this experience at present, however, is passive and determined by the media company carrying the broadcast.

This is where betting can in some ways be transformative by providing multiple ways to drive a step-function increase in viewer engagement. While sports betting in itself can be an incremental monetization opportunity over the long term, more immediately, it is likely to be an enabler for experiential tiering of sports, which is uniquely possible in sports, more so than any other content form. In this respect, NBABet Stream provides a starting template to provide a sense for what is possible, even in a very nascent phase. The service provides:

  1. an alternative broadcast of select NBA games with alternative camera angle
  2. real time betting-specific statistics (provided in collaboration in BetMGM/MGM Resorts which has a betting partnership with the NBA)
  3. alternative commentary from Yahoo Sports and Bleacher Report tailored for the betting audience; and,
  4. VR components.

Experiential tiering of sports is not in itself new, as demonstrated by the tiering of the same set of NFL games on Sunday between RedZone, Sunday Ticket and broadcast. However television has been a historically one-way service, while streaming enables two-way interactivity. When this interactive capability is combined with elements such as betting, fantasy sports, VR and AR experiences, or even a different viewing context (such as within Fortnite), there can be a transformation in how the same event is experienced by different cohorts. What this in turn should enable over time is the ability to tier the demand curve for sports much more granularly and optimally than the bundling approach today of forcing everyone to subscribe to all sports, regardless of individual interest.

Overall, while betting will drive its own independent economics for sports, it is also likely to help enable alternative tiering models for sports distribution, which is likely to become an important consideration as companies such as Disney consider direct-to-consumer models for their wholly owned networks such as ESPN.


Connecting to gaming

When it comes to engagement, gaming is the king. Try to pull your son or daughter from the screen around dinner time, and you’ll understand, acutely, the stickiness. It’s becoming the social place where people go to hangout. It’s an experience natively built from the ground up to be sticky, social, and completely interactive. The sports angle through esports, is bringing a whole new level to engagement in this media realm. Now, not only is the viewer completely immersed when playing, but they’re immersed through a fan experience as well — which, as we talked about above, brings a whole new meaning to the word ‘engagement’.

Esports is a ‘long-tail opportunity’. The whole notion of fans finding a gaming personality more recognizable than a traditional sports personality is still inconceivable for most. That’s not the case for Gen-Z (the generation after millennials). In his interview with Vancouver 1040, Adrian (EG president) said it best, ‘for Gen-Z you’re more popular at the bar if you’re hanging out with Lazarbeam (Aussie pro gamer) than Max Domi (pro hockey player)’.  Esports is a flywheel driving a step change in engagement for gaming. Aside from making gaming ‘mainstream’ or more ‘accepted’, it’s just simply minting a whole generation of fans who live to play and watch their stars. It’s also the conduit to, like traditional sports, bringing betting into the fold.

What does engagement in gaming look like? This is the engagement graph of Roblox, which over half of US kids play, since it was launched in 2006. It’s no wonder that the major tech giants are in a war to secure their piece of the pie in terms of game distribution in the coming years. Engagement is the key.

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Source: The Economist

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