Direct to Consumer is not OTT

Sport Business must get closer to the consumer.?It’s a prerequisite for success today and there has been widespread recognition of this.?The obsession has been around building a D2C business but when we dig deeper we realise this is a fallacy.?What we mean when we say Direct to Consumer in sports is OTT – or effectively a streaming service of our content where we charge the fan/viewer directly and get to know them in the process.

This is of course led from the industry viewpoint that the ‘Content is King’ and not from a perspective of what is the fan (however we want to define that) looking for. When reading the recent synopsis of the CAA World Congress of Sports it feels dangerously like this is the current trajectory ttps://www.sportsbusinessjournal.com/Journal/Issues/2021/10/18/Upfront/CAA-World-Congress-of-Sports.aspx?ana=mk_sbj_jo_emjo ) ?

If we frame the goal properly, we can significantly increase the size of the opportunity and from there begin to build a true Direct to Consumer business.?

Sport is a passion play.?It does not matter how you come to it, your type of involvement or frequency.?One of the great advantages sports have over other industries is the willingness of people from all walks of life to commit themselves to it in a variety of ways – be that voluntary work to scrolling through social accounts and playing with friends or leagues in your spare time.

If you work in sports, it gets even better – because it’s a passion play collecting data (in a GDPR compliant way of course) can be easier than say a vacuum cleaner business or a tobacco company.

Go on any social network, any park or playground at the weekend or during breaktime in school and you will see a torrent of sports – real and virtual – being played.?More than that there is the obvious connection with a host of audiences that are heavily involved.?From parents, children, amateurs, pros, administrators, volunteer leagues, coaches and referees to the start up community building tools the audience is there and waiting.

As you look at how to build a D2C business then it's critical not to make mistakes early in the process and to limit your opportunity unnecessarily.?If you are looking for growth the job is not to build an OTT but to identify the friction points that exist that prevent your variety of audiences from being involved with you.?If all you do is build an OTT, then you might be creating more friction not less!

Building your D2C Strategy

When designing your way forward make sure you ban the use of the phrase OTT.?Ensure that the definition of D2C is broader than just a streaming platform.?It can and should be a part of it.?Yet for it to succeed it has to be so much more than a place to replace the big screen environment. At no point forget that the fan and their involvement is key to making the D2C flywheel spin.

In many ways, we do not yet know our fans as PTI Digital have discussed https://www.ptidigitalgroup.com/2021/04/07/sports-direct-to-consumer-challenge-we-dont-know-any/ and as such we do not fully understand what they are looking for.?What you should not be restricting yourself to is this: just the viewer.?

They are one segment of your business.?Often the least involved and most passive.?So, to build a lasting D2C platform the role must be to appear in your audience's life every day, on multiple occasions so that they feel involved.??If you restrict your TAM to those willing to pay for viewing subscriptions, there is a finite opportunity.?

This is the business of sports, and to grow the revenue line the thinking must be broader in the D2C world.?It must include those that engage, participate, play, purchase, or attend.?This shouldn’t be just about real sport but about the virtual and eSport variant with tech as your enabler.

Reducing friction, increasing involvement, and driving revenues – direct or indirect – is the ultimate goal.?It's not a small task and most will need to tackle this in the same way we eat an elephant – piece by piece, but the broader picture is needed for success to be as transformative as we all desire.

There are a couple of examples worth considering.

Marketplace

This is more complicated from a team perspective but certainly a wonderful opportunity from a Governing Body or League perspective.?Additionally, as you see fans become ever more fluid this is something that should be a consideration for teams too.

Creating an eCommerce site where you can sell some merchandise is very much a web 1.0 approach and the antithesis of successful models demonstrated by Amazon, Alibaba and Fanatics.?Mostly it has limited success because it is such a restrictive experience for the buyer.?An eCommerce site should be much broader and anticipate a variety of options:

The fan may want to buy merchandise that is not just from one team or even league.?In today’s world, they are likely interested in several different teams.?By only providing your inventory you are putting up barriers to the fan’s appetite to purchase.

Take my own club Chelsea.?They win plenty of awards for their online presence, but a few things jump out.?If I want to buy tickets, I can’t go directly to buy merchandise.?The same the other way round.?Equally, I can only buy Chelsea branded materials – but what if I’m coming with friends who support the other team??Why am I being forced elsewhere to make a purchase??Take the affiliate fees and enable my buying experience.

When I’m going to a game at Chelsea, I will often want to book food at a local bar or restaurant.?Yet I can’t do that through the Club.?The goal appears to be to incentivize me to come into the stadium but in Britain, the culture has always been to enter last minute.?So rather than fight the endemic culture there should be an effort to make my entire experience that much more fluid, and for the club to generate cash from helping the local bars and restaurants in a similar way to how OpenTable works.?

eSports / Gaming

The FIFA brand to a whole generation of kids (well lets say GenZ to Millenials) is associated with a computer game not the International Football Federation or indeed the World Cup.??Interestingly the research shows that part of the interest in the game is that it is such a realistic simulation of the real thing.?There is link there – a correlation rather than causation – but one that should not be ignored.

Barely a day goes by without an article or conference on how can sport appeal to the youth of today.?Yet a brief visit to the home page of each of the five football Home Federations and you cannot see anything around gaming and eSports.?This likely comes from a good place – that the desire is to promote the ‘real’ sport and an active lifestyle, but it ignores some very important facts.

According to Statista in 2020/21 over 50% of kids aged 5-7 are playing online games, its at 78% for children aged 8-11 and at 80% for 12-15.?If that is where your target audience is, and you are not providing them relevance then you cannot complain.?https://www.statista.com/statistics/274427/online-gaming-among-children-in-the-uk-by-age-group/

If you want to bring them into the funnel to participate or watch your sports then you must first find them, provide them with access to you, and from there take them on the journey.?Think Messi is amazing in a gaming context, wait until you see what he can do in real life.

Accepting that gaming is bigger than movies and sports combined is required and embraced. https://www.theguardian.com/commentisfree/2021/jan/11/video-games-music-youth-culture ??That might mean more simulated games, branching into mixed reality games, fantasy sports, and of course eSports.?This is big business and it's where much of your core audience is.?The Five Home Nations should be having this front and center, hosting regular national and international competitions, and building a business.

If they can then build on the cool, though initially gimmicky Adidas GMR and EA Sports collaboration and drive links between real and eSports there is an interesting opportunity ahead. https://www.highsnobiety.com/p/adidas-ea-sports-fifa-real-life/

Gaming and esports can and should be an entry point for many into the sports industry and is without a doubt an enticing opportunity to build revenues.

I am a big believer in the Direct-to-Consumer model.?In an industry where the ‘fan/consumer’ is everything, there has been far too much distance between the right holders and IP creators and the variety of audiences that make up our fanbase.

What is now needed is a broader understanding of the opportunity that D2C really provides and for us to look, as an industry, at the opportunity to engage and involve our fans in the ways that matter to them.?

If the solution we follow is simply a digital copy of the broadcast era we have lived through, then the opportunity afforded to us by technology will have been wasted.