Game Engines, Sport’s Casual Fans and the Creator Opportunity – Is There Something There?

Radical innovations in TV and Film production technologies – coming from game engines - will soon land high-end production capabilities onto the laptops of teenagers in their bedrooms. Many of these teenagers still count themselves as sports fans – but sport is in a moment of transition, and for some sports, their next generation of fans is looking decidedly underweight. Can sport harness the next generation of creative tools to replenish their younger fan base??

I recently travelled through LA and Tel Aviv and found myself drawn into the remarkable innovations in TV and Film production being pushed by Epic Games’ Unreal Engine, Unity Technologies’ Unity game engine, and Wonder Dynamics’ Wonder Studio toolkit. Wonder Studio was particularly eye-catching - a web-based platform for creating videos with CGI characters with literally a few drags and drops onto footage you’ve shot. No production hardware or equipment, no motion capture suits needed. All the usual painstaking frame-by-frame visual effects treatment is seemingly taken care of within the platform.

You can sense from the posts and reviews on YouTube just how quickly these capabilities might be embraced by amateur creators, in a way that the sophisticated Unreal Engine and Unity products perhaps won’t be, being more suited as they are to highly trained and qualified creators, if not industry professionals. What will amateur creators do with these extraordinarily powerful creative tools?

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My trip through LA and Tel Aviv also coincided with the quarterly results for Meta and Alphabet. Both reported uncharacteristic strain in their advertising revenues, but both also featured video ‘shorts’ as a bright spot. And both companies explicitly tied their ‘shorts’ opportunity to harnessing the creator opportunity.

On the Alphabet earnings call, Sundar Pichai revealed YouTube Shorts has crossed 50 billion daily views, saying: “YouTube Shorts continues to see strong momentum with Creators. Last year, the number of channels that uploaded to Shorts daily grew over 80%. Those posting weekly on Shorts, saw the majority of new channel subscribers coming from their Shorts post.” His colleague Philipp Schindler, Alphabet’s Chief Business Officer, added: “Creators fuel YouTube success. Across Long Form and Shorts, Music and Podcasts, Vertical and Horizontal, YouTube is where creators are incentivized to make their best work, which means the best content, more of yours and more opportunities for advertisers. As I said last quarter, our creator ecosystem and multi-format strategy will be key drivers of YouTube’s long-term growth. And to support this growth, we’re focused on, number one, Shorts…”

Given YouTube’s, Meta’s, Snap’s and Tik Tok’s very prominent overtures to the ‘creator community’ in the first half of this year, I had a closer look at all the buzz and noise around the Creator Economy.

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Now, I am not close to the ‘creator economy’ and profess no expertise in it. In fact, as an outsider, it looks like a little bit blown up. There are big numbers surrounding it – Goldman Sachs, for example, has the total addressable market of the creator economy growing to USD$480 billion by 2027 from USD$250 billion today. The numbers of people trying their hand at being creators is ballooning, too – it estimated there were 46.7+ Million Amateur Creators in 2021, and will have risen to 162+ Million Amateur Creators this year. ?

But there are smaller numbers, too - only about 4% of global creators are deemed professionals, meaning they pull in more than USD$100,000 a year. And for those choosing to be full-time creators - 46% of them make less than $1K. No typo, less than one thousand US dollars. More than half (59%) of beginner creators haven’t made more than USD$100 in a year.

So, just know that when I talk about this area, I’m not necessarily evangelising it. It looks to me to be a very, very small group of ‘made its’ atop a treacherous ‘creator economy’ mountain, with lots of young – middle-aged burnouts strewn along the path to the peak.

But does occur to me that, with emerging tools like Wonder Dynamics’ Wonder Studio and Snap’s new generation of creator tools – might we be on the cusp of a leap forward in the quality and variety of creation that amateur/beginner/novice creators are capable of?

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Before I left for my travels, I’d been fortunate enough to participate in the terrific SportNXT conference in Melbourne, Australia. A world class conference, in only its second year, with a very Australian flavour to it, of course, but with generous insights and perspectives from international speakers from the NFL, NBA, Formula One, the ICC and FIFA. So perhaps it’s no surprise that on my travels I was trying to parse the developments in the game engine space and with the very recent immersion I’d had in the the sports sector. ???

After SportNTX, I’d been refamiliarising myself with some of the data around sport, principally through the lens of broadcast / video consumption – broadcast still being the largest source of income for many top tier sports.

From my time working in the UK, I’d seen chart after chart, report after report tracking the steady, but undeniable, decline in ‘traditional’ TV audiences in the UK. Younger demos have been on a steep decline curve for many years; older demos held out a bit longer but as of 2022, are also showing downward momentum.

It’s all quite stark in the UK - the UK’s Enders Analysis has reported that in 2022 the decline of consolidated linear TV accelerated to 12% year-on-year – a staggering rate of decline. And for the first time the over 65s experienced a decline in their consolidated viewing time (and, as Enders notes, incidentally the over 65s is where Netflix saw its greatest growth in the UK in 2022).

My starting assumption was that the audience shift afflicting ‘TV’ was hitting ‘Sports TV’, too – especially in light of the increasingly fragmented in-market distribution of broadcast rights, and the spawning of additional competitions within the major sports codes. However, it doesn’t seem to be the case. At a macro-level, TV consumption of sport seems to be holding up well.

Staying with the UK – Ofcom’s ‘Media nations: UK 2022’ report data shows that whilst average reach for total broadcast TV declined precipitously from 95% in 2011 to 86% in 2021 - over that 10-year period, sports channels’ reach stayed flat, at 19%. Analysis from UK’s Enders Analysis shows that Sky UK’s sports channels drew 3.0% viewing share in 2022, up from 2.0% in 2018 (contrast that with Sky Cinema channels, which are collectively down to 1.0% in 2022, from 1.5% in 2018).

UK data also suggests an even higher proportion of viewing among younger audiences, at 25.6% for 16-24-year-olds, compared with 17.6% for all individuals. Per Ofcom again - on UK PSB channels, 16-24s spend 15.8% of their viewing on Sport, vs 10.5% for all individuals, and the BBC iPlayer is used by 25% of online adults and teens for watching live or catch-up sports content.

And looking across the pond to the US, you could argue that it is sport that is nearly single-handedly holding cable bundle together, and – as I touch on further below – is fast becoming a necessary component for a viable streaming product.

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That’s the ‘sport’ picture at the macro level. However, as you delve into the sport-specific context, the picture starts to polarise a little, and sport seems in a bit of a squeeze in some quarters. It seems to me that two areas stand out as worthy of profiling further:

1.??????The first squeeze is TV’s has ‘lighter viewer’ problem, which, coupled with the irrepressible rise of IP-only devices, means there is undoubtably an emerging engagement problem for broadcasters. And for all sports viewing resilience, it too is facing the same ‘lighter viewer’ conundrum, which is compounded by sports fans’ exuberant embrace of streaming.

2.??????The second squeeze is the increasing commercial stratification of sports bodies into a top tier of commercial winners and lesser tiers of also-rans, the latter for which it seems the slope is getting a lot slipperier. ?

Looking at these two areas in more detail:

Sport’s squeeze #1 – disappearing lighter viewers + the rise of the IP-only viewers.

Looking again to analysis out of the UK from the excellent Enders Analysis, - their report ‘TV set viewing trends: Spotlight on the lighter viewer’ deftly catalogues how TV is losing its lighter viewers to Netflix, YouTube, and others, at an alarming rate. In the UK in 2015, the lightest 30% of viewers watched 6 hours and 13 minutes of broadcaster content per week. In 2022 the lightest 30% watched 1 hour 40 minutes every week, an astonishing 73% decrease. Those lighter viewers are more likely to be under 35 and in the ABC1 socioeconomic group.

Looking at this trend through a sports lens, it’s also evident that younger sports viewers (18-34) are less interested in the major sporting codes than middle-aged (35-54) and older (55-64) sports viewers. But there’s an additional trend at play: research from Ampere Analysis shows that, within the viewing that sport is retaining, sports viewers are rapidly shifting their viewing to IP devices.

The significance of a shift to viewing over IP-devices is that the TV viewing experience on IP devices is much more inconsistent than that of ‘traditional’ TV sets or ‘big’ Pay TV interfaces. Whether the interface is Samsung TV, Amazon Fire, Apple TV or a myriad other CTV or streaming stick / puck options - it’s just harder for IP device viewers to get a survey of the services and content on their IP device.

Consequently, given the friction the IP-viewers experience, those viewers increasingly default to two or three trusted streaming services. Tom Harrington of Enders Analysis observes: "This shift in consumption...is exacerbated by the siloing nature of streaming services: fewer services are accessed due to the friction between them and therefore fewer are required, leading to a limited number of services controlling growing proportions of viewing. This all occurs within an environment where long-form viewing is contracting, with rising short-form video engagement (e.g. YouTube, TikTok etc.) eating into its share."

It's for this reason that the giants of IP devices consumption – Alphabet, Amazon and Apple – are increasingly active in the sports space. Google forking out a reported USD$2 billion per year for a seven-year licence to the NFL's Sunday Ticket starting in September, for a reported $2 billion per year, is a case in point.

Enders Analysis’s report “Google and the NFL: YouTube steps up video subscription aggregation” notes that Apple was in the mix for the NFL Sunday Ticket, too, but wanted global (rather than US) rights. The Enders report lists how Apple has already made some big bets on sport. In 2022 Apple paid up for a seven-year rights deal with Major League Baseball in the US, giving them rights to one weekly Friday game of for USD$85 million per year. Last year, they stumped up USD$250 million per year for a ten-year global rights for Major League Soccer (As Enders Analysis observes, the MLS has an audience almost exclusive to North America) from 2023. Apple is expanding its sports documentary and film commissions, and Ted Lasso, Apple’s biggest content success, revolves around football.

So, it seems that the gravitational pull of the big streaming ‘silos’ will get stronger. Data from Ampere Analysis points to the impact this service-siloing is having on viewing motivation for sports fans. Ampere’s analysis shows that sports fans – being more IP centric in their viewing than the average TV viewer – are significantly more influenced in their viewing choices by their friends, and by social media, than the average TV viewer. ?

This is a twin-threat for sporting bodies. Their most at-risk audience segment – the under 35 ABC1s - is now surrounded by jumble of IP devices and a muddle of different UIs and is becoming ever more dependent on social media and peer advocacy to get to sports content. An increasing number of those viewers are just not getting there.

Sport’s Squeeze #2 – the increasing stratification of sporting codes, where the winners are streaking ahead

Back to the SportNXT conference in Melbourne, in March. News Corp Australia's executive chairman Michael Miller - on a panel with the International Cricket Council's Greg Barclay, NBA Asia's Ramez Sheikh, and Melbourne Football Club's Kate Roffey - surveyed the state of sport in Australia and warned that Australian sports outside of rugby league, AFL and cricket were facing a “crunch time” as consumer attention and commercial returns concentrated more and more on the major domestic codes and the increasing active international interlopers to the Australian market such as the NBA and the NFL.

“The pool – the pie available to sports whether it be from broadcasting, sponsorship, ticket sales or merchandise – isn’t growing much. The top-tier sports are taking the largest share of that. In Australia, we probably have only three: rugby league, AFL and cricket,” Miller said.

“The rest of the sports in Australia, I would say, are struggling to get out of tier three into tier two and fighting for a smaller part of the pie, and also competing now with the international sports coming in, funding – rightly – women’s leagues and having to invest in junior sport.”

Miller's central comment was that media companies have to make choices about where they allocate their own coverage and spend on sport, as the media companies themselves are in a fight for supporters’ “attention span” in an increasingly competitive market. Inevitably, coverage and investment will concentrate on where the largest pockets of consumer interest are.

A month earlier, the Australian Financial Review had assessed that Australia’s major broadcasters were now paying more than AUD$1 billion a year for the rights to air the AFL, NRL, cricket and tennis, with the overall price nearly tripling over the past decade despite a slide in those broadcasters’ earnings. See the table below:

As Michael Miller had called out - major investments in sport like those that Australia’s media majors Nine, Seven and Foxtel have put down will inevitably need the full focus and ‘flex’ of each groups media muscle to ensure the payback to their respective businesses. They will be going larger than ever on AFL, Tennis, Cricket, NRL and the Olympics. ?

Speaking of the Olympics, the Australian sports industry is particularly alive to this dynamic as looks ahead to the 2026 Commonwealth Games in Victoria and the Brisbane 2032 Olympic and Paralympic Games. The day before Miller's observations at SportNTX, the Australian Olympic Committee Chief Executive Officer Matt Carroll had voiced similar themes, raising the alarm on Australian government funding for sport. In a speech to the National Press Club, Carroll said, talking specifically of the need for increased government funding: "Australian sport will fall over a financial cliff… Sports are fighting each other for a share of a cake that keeps getting smaller."

Then there’s an ever-increasing consumer squeeze coming from international arrivals, too. An Ampere Analysis survey of Australian sports fans across all sports, by age group, shows that in Australia the NBA, NFL, EPL, MMA and Wrestling all over index on younger fans (18-34) vs their major domestic rivals. These international interlopers are capturing the attention of Australia’s younger fans just as some of Australia’s domestic sports are losing touch with them.

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What I was left with was a generalised picture in which most sports are seeing some drift in engagement with their next generation of fans just as they are facing tightening competition for attention and money. For some sporting bodies it’s an existential challenge: the task of replenishing their fanbases at the younger end cost-effectively and sustainably when younger consumers are increasingly harder to reach and are being targeted by more amply resourced sporting bodies. ??

This is of course not new news to any sporting body. To a greater or lesser extent, all sporting bodies are on the front foot with this challenge and are trying to “meet young fans where they are”. The industry, in all markets, is abuzz with such efforts, ranging from evolving the production of the broadcast content to incorporate more visually rich on-screen graphics (Unreal Engine’s Project Avalanche has already been used by ESPN for exactly this purpose), trying to visually connect the coverage with gaming-like visual aesthetic, as well as creating shorter ‘game highlights’ / ‘game recaps’; partnering with pop culture and sports influencers connected with their sport; pushing platform-specific content out to TikTok and Snap, and working with Fortnite and Roblox. Sports that own stadiums are also innovating in the match day experience, making it a more enticing experience for youngsters – for example the NFL has done some great work with Snap around AR stadium experiences, and of course the match venue innovations are broader in scope than just digital innovations. Sports bodies with sufficient scale are also pushing resources into direct-to-consumer digital offerings, in nearly all cases for a subscription fee.

But I found myself wondering how many of these efforts are genuinely recruiting new young fans to the sport, vs servicing those who are already fans. What is reaching the casual fan, or the non-fan, vs super-serving committed fans? I also wondered how scalable current digital recruitment efforts were. For example, The N.F.L. apparently works with about a thousand pop culture and sports influencers who post NFL-related videos and photos of themselves on YouTube, TikTok, Instagram and Snap. The NFL doesn’t pay them but provides them with perks like sideline passes before games or meetings with players. I imagine this would be a sizeable administrative task, but one that the NFL can resource within its commercial and cultural scale. However, sporting bodies with less commercial and cultural firepower at their disposal may not be able to put this sort of programme in place, especially given the contracting financial envelope some sporting bodies must work within.

If a sporting body applied two filters to its ‘younger audiences’ efforts – “which of our current digital efforts are the most effective at recruitment of new fans” and “which of our current digital recruitment efforts are scalable” – how many of its current initiatives would it be left with? And are they sufficient to replenish its fan base at the younger end at the volumes it needs, given the competitive surges taking pace all around it?

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This is where I began to see the potential connection between sports bodies and the current innovations coming out of Wonder Dynamics, Unreal Engine and Unity. I’d guess most sporting bodies create most of their social content centrally. Few will have the wherewithal to formally enlist a network of influencers to help create additional content, but some do, like the NFL. Centralising social content creation is hard – there’s only so much you can create, you seldom create ‘winners’, and it can be very difficult to scale.

What if a sporting body unveiled a new type of social content creation initiative, based around these new tools like Wonder Studios, or Snap’s new AR Lenses initiative or Snap Maps, and using a ‘sandbox’ of officially sanctioned footage and IP? What if the sporting body handed its fan base license to create their own style of shorts or lenses, heading in whichever direction they wanted?

The best version of this could see a kaleidoscopic burst of new content for a sport, conceived of by the sports fans, created for their own peers (some who are not fans – the whole point of the exercise) – and produced at next to no cost for the sporting body.

The newly created content could be given an audience through the sport’s own social channels, spotlighted by the sport’s media partners & broadcast partners – fueling further inspiration and creation from the sport’s fan base. A sport’s commercial partners could get involved, ‘commissioning’ content from the fan base on certain topics, offering prizes or incentives for creators. Designed correctly, it should be scalable and cost effective. It may also spawn a whole body of new content and IP creation for a sport, easing the strain on ‘game day’ content. Most critically, it should succeed in thrusting the sport further out into the labyrinthine world of younger, non-fans. ????????

But given this direction is wholly reliant on fans’ appetite to engage and create – how will the fans see this?

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I suspect fans will (correctly) see some not insignificant barriers – probably three main ones. Let’s call them ‘Audience’, ‘Training’ and ‘Utility’ barriers.

1.??????The ‘Audience’ barrier: few novice creators – creating for the sake of creating – can really be bothered to find an audience. Their current ‘social media’ audience will mostly be friends, and not all of whom share their passion for the sport & team in question. And few novice creators want to create for an audience of one. So, they’ll want to know “who am I creating for? How do I find my audience?”.

2.??????The ‘Training’ barrier: whilst these new creative tools – be they Wonder Studio or Snap Lenses - are much more accessible than in the past – they all still have a degree of intricacy, and your average fan is unlikely to delve into them ‘cold’ / unsupported. They’re going to need help to skill up on the tools.

3.??????The ‘Utility’ barrier: young fans likely have an eye to the future (and so may their parents!) – maybe they want some assurance that their investment in time to learn the tools and their subsequent creative efforts will at least develop for them some sort of valued and durable tradecraft that they can draw on in ‘real life’.

Well, enter the sporting body - in command of a most durable and coveted ‘passion property’ rooted in the struggles and joys of real life, and with a readymade audience and established distribution partners. A sporting body with clout and leverage and profile in its local / national community, and able to draw together partners to put on skills workshops in these established and emerging creation tools not only out of self-interest, but as a community and civic good, building the creative capabilities of the communities that the sport draws on and serves. A sporting body that can prove out the utility of this for its beginner creators by connecting its creators with sponsors and commercial partners, showing them the value of learning these skills.

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To be sure, there are many strands that need to thread together to make this model work. But sporting bodies have the energy and commercial creativity to do it. They have partners and communities they can enlist. They have fans that love their sport, and given the tools, would love to show their friends why they love it, too. But perhaps most critically, sporting bodes have a need to do it. They must find a scalable, decentralised way to reinvigorate their ‘younger fan’ funnel. Their future depends on it. ?

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The good thing about this moment in time for sport is that, whilst there are definite cross currents, there are also numerous tides flowing in its direction.

First, the IP-centricity of the younger fans means they are much more open-minded to non-traditional forms of engagement with sports. Ampere analysis in their excellent recent report “How do young fans consume sport?” observes that IP-centric young fans are engaging more with ancillary sports content such as social media content, fantasy sports games and betting. On the gaming front, Ampere's UK consumer tracking has sport always in the UK gamers' top 3 favourite game genre regardless of platform - smartphone, console, PC, and VR. Ampere observes that those fans who use ancillary sports content in turn spend more time watching live sport than the average fan, and younger fans also report a high willingness to spend on watching live sports content. So, there is a silver lining on these lighter, IP-centric fans.

Second, the giants of IP world - Alphabet, Amazon and Apple, but also Meta, Tik Tok and Snap – are also proving to be good partners for sport. The Enders Analysis report ‘Google and the NFL: YouTube steps up video subscription aggregation’ cites YouTube’s Chief Product Officer Neal Mohan as saying that "besides boosting subscription growth, the deal would help YouTube to increase its TV screen penetration and generate synergies with the platform’s sports-oriented content creators, who will be given “exclusive” access to the games." Sports content in the hands of creators is great for their businesses, too, and they’ll likely be very supportive of sports bodies efforts in the space.

Third, the future for sporting bodies is evidently not preordained by virtue of their current scale. Mid-tier and emerging sports are proving that you can take the fight to the top tiers, too. Returning to Michael Miller's commentary at Melbourne’s SportNTX - he pointed to the Australia's National Basketball League as a stand-out. The resurgence of the NBL is a view supported by Colin. Smith , a media rights expert based in Melbourne, Australia, who also points to MLS and the College Conferences for Football and Basketball in the US, with the reconfiguration of College conferences singularly motivated by making the competition more attractive to broadcasters, and therefore fans.

Smith also points to the exhilarating rise of the leading women’s leagues - WSL, WPL, Liga F, WNBA. "What is amazing here that in the first season of WPL in March this year it is now the most valuable women’s sports league in the world," says Smith. "Unlike the AFL, NRL, EPL, Liga F the WPL is totally standalone from the Men’s IPL comps. As an example, the Aussie Cricketer Ash Gardener is now earning from WPL double what Steve Smith and Dave Warner earned this season from IPL. A huge game changer."

And finally, an opinion that is just my own. As I write this, I’ve just read the U.S. Surgeon General’s advisory on social media’s impact on the mental health of youth, published May 23rd. The advisory cites its research findings that social media can profoundly harm the mental health of youth, particularly adolescent girls. The advisory notes that while social media offers some benefits, there are "ample indicators that social media could also harm children's well-being." It goes on to say that social media use may cause and perpetuate body image issues, affect eating behaviours and sleep quality, and lead to social comparison and low self-esteem, especially among adolescent girls.

Sporting bodies, epitomising as they do the concept of ‘purpose lead organisations’, are probably the most community-connected and community-invested organisations going around. Over the two days I had at SportNXT in Melbourne, the conviction the leaders of Australia’s preeminent sporting bodies demonstrated to protecting and advancing the social causes of their communities was a real as it gets. So, sports organisations will no doubt be aware that being seen to be ramping up their social media focus may – rightly - produce mixed emotions, and mixed outcomes, for the communities they serve. ?

With this in mind - I see some hope in this new generation of creator tools. My hope is that these tools can tilt the balance of social media engagement away from passive consumption towards creation and imagination. I can also see that this next generation of creator tools can shift the focus of social media creation away from the unhealthy fixation on ‘the self’ to a creation that is based on material that is external to the individual. I suspect many youngsters probably feel trapped by the obligation to ‘create’ something of themselves on social media. Perhaps these tools can turn their creativity away from themselves and in doing so, turn their peer’s attention away from themselves (with their own perceived imperfections and shortcomings) and towards their creativity instead. ?

But let’s see. And if anything can do it, sport can.