Out-Of-Home vs The Metaverse - Co Founders' Update #3

Remember the Metaverse?

If you attended Global Sports Week 2022 in Paris you’d be forgiven for thinking it was the only thing sports executives thought about.

The next big growth channel. A digital stadium capable of holding billions of fans.

Experts spoke with an evangelical passion, while anyone not yet clued up nodded, stroked their chin, and said “well obviously it’s a big part of our strategy”.

That was until the final session, a fireside chat between Universal Music Group’s Olivier Robert-Murphy and FIFA’s then Marketing Director, Jean-Fran?ois Pathy (now of Spotify).

When the inevitable question came, Jean-Francois said:

“I don't have a day without an agency or someone coming to me saying: “Hey, FIFA should be on the Metaverse. You have to be.” And I think if we were asking every single person here, “What is the Metaverse?” We'd get a different definition."

In other words:

?? Beware The Bandwagon

False dawn solutions are alluring - the problems they address are truly felt and the opportunities they promise are very valuable.

Maybe that’s why Jean-Francois was loath to throw the baby out with the Metawater. He added:

“So I'm not so interested in the Metaverse in itself because I don't know what that is. But I'm really interested in the building blocks of future digitization, different ways of monetization, and direct interaction with our audience.”

In other words, it's not the Metaverse that matters, it's meaningful engagement with increasingly global fan bases.

And that interest remains front-of-mind in the industry if the conversations at SportNXT in Melbourne last month are anything to go by:

• Krishna Bhagavathula, CTO of the NBA, spoke about the challenges of improving broadcast for a global audience: whether at home or in a venue, fans needed to feel as engaged as if sitting courtside.
• Travis Auld, CEO of the Australian Grand Prix, explained that they had taken over a huge bar in Melbourne as an overflow venue to extend reach and engagement after all four days at Victoria Park sold out.
• Julie Uhrman, Co-founder of Angel City FC, spoke of her ambition to be like the Yankees, with caps worn by millions of fans who'll never visit New York.

Regular references to the 99% of fans that will never visit the stadium and lots of chatter over coffee and canapés about the role out-of-home might play in reaching them.

If this all sounds familiar, it should.

Here’s the parting shot from our last newsletter:

“The smartest rights holders will clock that out-of-home audiences present an opportunity to make more money from broadcast and to develop a new channel of fan engagement and partner activation.”

But… beware the bandwagon, remember.

Only there’s a key difference between the Metaverse and out-of-home viewing.

One of them is real.

And while real is good, it can also be expensive.

In our last newsletter, we referenced three recent initiatives being used to monetize the out-of-home experience:

• Twenty Nines - a global bar concept from LaLiga
• F1 Arcade - immersive fan experiences in and out of races
• FIFA Fan Festivals - mega fan zones across the world

All three are essentially hospitality businesses. Anyone who has worked in bars and restaurants will tell you how hard it is to make them work.

They also require huge capital expenditure, so unless you have more cash than sense, what options do you have?

?? Big Money, Working Smarter

Ironically, the answer comes from perhaps the richest sports organisation of all - the National Football League.

Possessing cunning and cash in equal measure, they recently appointed three UK pub operators - ETM Group London , Arc Inspirations and Regional Taverns - as official partner venues in the UK.

With dedicated coverage, exclusive watch parties, and top-tier hospitality, the value is clear. In the words of NFL UK’s GM, Henry Hodgson:

“The NFL is best enjoyed with other fans - we're excited that this partnership will allow sports fans to meet up at these great venues and watch NFL games together.”

It’s smart for three reasons:

• Great operators guarantee a great fan experience
• The capital expenditure required is precisely ￡0
• It’s highly scalable

The NFL prides itself on having the best product available but there is an understanding here that having the best product might mean working with the best operators rather than owning them.

Compared with building your own bars and restaurants, it’s a safer entry point for anyone to engage out-of-home fans. It’s also one being facilitated more and more by FANZO’s technology, expertise, and network of 32,000 sports venues worldwide.

??? Who’s Spotted The Gap?

After the success of Asahi’s bar finder on the Rugby World Cup platform last year, two new heavyweights are using FANZO to engage out-of-home audiences in 2024.

In a first-of-its-kind for women’s sport, the Six Nations’ Guinness Pub Finder features 400 venues across all six participating nations and is integrated with the Six Nations’ own digital platforms.

For Guinness, the product extends awareness and availability of both the tournament, and Guinness’ sponsorship, far beyond the stadium.

While for fans, by carefully curating venues we know that:??

1. the games will definitely be on
2. the venue offering will be high-quality
3. and fans will have a brilliant, formative experience with the sport

Meanwhile, our white-label technology will power UEFA’s bar finder in the Euro 2024 app and website, promoting official fan zones as well as hundreds of bars in collaboration with tournament sponsor Bitburger.

As with the growth of any new industry, established areas of the ecosystem will face disruption while rights holders continue to invest in the out-of-home sports viewing channel.

Nowhere will this be felt more keenly than in the rights, distribution, and promotion of broadcast rights.

?? Winners And Losers

The increasing fragmentation of in-home and direct-to-consumer rights (see YouTube, Amazon, DAZN etc.) opens up space for dedicated players in the out-of-home market and revenue growth opportunities for rights holders when splitting in-home and out-of-home.

In January’s newsletter, we highlighted Joe Hand Promotions as a long-established leader in this space.

Despite operating for more than 50 years, they continue to lead innovation in the USA. This month Joe Hand Promotions launched OnTap Sports , an innovative new bar finder to help venues increase revenue by driving more foot traffic to their establishment.

This platform (powered by FANZO) doesn’t just make their customers more successful, it gives their rights holder partners amplification and fan engagement across a huge out-of-home market.

It becomes a point of difference not just for winning customers but as a means of adding value in negotiating for the sports content rights themselves.

See also: FANZO announces extension of partnership with Canal+ Business in France

If we’re right, and money continues to flow into the out-of-home channel, you can be sure its twin brother - legislation - won’t be far behind.

?? Getting Ahead Of The Gavel

History suggests that should be a concern for drinks sponsors who have built such a strong association (and commercial performance) on the coattails of fandom.

The 1991 Loi évin policy law in France, which prevents the direct association of sports rights with alcohol and tobacco, has been tricky for brands to navigate.

This is why the smartest organisations have valued digital marketing not so much for its efficiency but for its flexibility.

The stunning success of Guinness in recent years is well-documented, so it was interesting to hear David Callaghan , Head of On-Trade Activation for Diageo, call this out early in our recent interview:

“There are now greater constraints than there used to be around how you can show up out of home (...) as circumstances have changed in the world, the degree of flexibility and agility that a digital programme can offer (“Switch it on/off quickly”) allowed us to be very adaptable whenever we needed to do that. There's a big benefit in that as well. You don't need to halt an enormous tanker bringing your point of sale over from China if you need to turn something off or, indeed, order another one.”

Learn more about Diageo’s strategy and success in part one of our interview with David Callaghan .

The biggest organisations adapt in line with legislation… that’s one way to tell that an opportunity is real.

Also in this month's newsletter:

• How We Do Sport #3, Stephen Cooper - Read how one of the biggest and best out-of-home sports operators in the world goes about its business.
• What We Watched, March 2024 - click for out-of-home search trends and insights from the UK , France , and Australia .
• How Carlton United Breweries are using FANZO to run cross-channel activity that connects both the On and Off-Trade.
• Unofficial Partner 386: Last Orders? Football and the Pub

This article is a transcription of the FANZO Co-Founders' Update #3, a quarterly newsletter on the latest movements in the out-of-home sports space. If you'd like this content delivered direct to your inbox before anyone else, you can sign up to the mailing list here .

Thanks,

Leo MacLehose & Dom Collingwood

Co-founders