End in sight for the TV era?
The last couple of decades have seen a phenomenal rise in TV rights revenue of professional sports bodies and clubs , so much so that 2018 was the year when media rights overtook gate receipts as the chief revenue generator in sports. Sponsorship and merchandizing came in as 3rd and 4th largest revenue sources , which in turn were influenced by the media exposure generated by the sport / club / players. Live sports captures maximum audience for TV networks, almost 50% of the top-watched programs in Nielsen reports are sports broadcasts including 7 out of the top-10 in USA 2018 list. With TV broadcasters and distributors dependent on sports to keep ratings up, can sports bodies be relaxed about the media rights revenue stream?
The information published by television rating companies suggest otherwise. TV viewership ratings of live sports broadcasts have been trending downwards in last few years; the trend is evident whether we look at the sports league with biggest annual TV revenue, i.e. the NFL or quadrennial showcases like the Olympics. NFL 2017 viewership was down 17% from 2015 , while Winter Olympics opening ceremony in 2018 was down 11% in comparison to 2014 . This steady unravelling of live sports TV has multiple underlying reasons ranging from consumers watching less hours of live sports on TV (and indeed less of cable/pay TV in general) to the rise of streaming platforms as well as ad-free highlights packages. Currently TV sports sponsorship is bucking the trend on viewership, rising 5% annually in 2018 . However, with audience migrating, eventually advertisers will shift and networks will be unable to sustain the spend on media rights.
The digital transformation game
"There isn't another industry that is being so fundamentally transformed with data and digital technology like sport" stated Satya Nadella at a Microsoft Ignite conference a few years ago. He was speaking on stage with Real Madrid FC CEO, jointly announcing a platform for 450 million Madrid fans worldwide , which makes it a global social network in its own right. While having a large online following is a great start, monetizing the same is easier said than done, as internet companies would vouch. The tenets of the digital game are wider than replacing depleting TV or stadium audience with digital and social ones.
Cable and Pay TV have brought lots of money into sports. Having said that, it has also alienated the uninitiated fan by limiting viewership, and far less people are watching and playing traditional sports now. This trend coupled with competition from online entertainment options, rise of e-sports and increased outdoor lifestyles means that every traditional sport has to look at its long-term health among millennials, generation Z as well as moms and dads in gen X. True digital transformation encompasses all four revenue streams in sports – media rights, gate revenues, sponsorship and merchandizing - and is about making the experience as convenient and intuitive as in the popular digital economy platforms for all stakeholders.
State of play
The sports and entertainment industry is unique in that it has ‘fans’ as customers and ‘fan engagement’ as its core business long before customer experience management became a beacon for the wider world. Pioneers in the industry are acknowledged for vertical integration of sports venues, teams / franchises, ticketing and media distribution. Also noteworthy are forays into creating multipurpose venues, digital direct to consumer media as well as e-sports. Impact of quantum jumps in mass communication technologies is not new – each of which from wirephoto to live broadcast to cable and internet has had a deep impact on sport entertainment consumption – and the sports authorities and franchises which best resonate the technology zeitgeist often turn out to be winners in the race for consumer attention. However, digital is more of a quantum jump in communication capabilities and succeeding in the new playing field requires adoption of a platform approach to sport 
Platform to win
This section covers the key blocks of the proposed digital sports platform. At its core, it’s a fan engagement framework which enables sports bodies (as well as their media and sponsorship partners) to discover new fans and know the existing ones better, deliver engaging emotional experiences to fans at the right time on the right device, all the while increasing retention and consumption and driving up monetization possibilities in a secure environment.
Fan engagement may have started off as a means to engage fans before, during and after a game, as an always-on means of connect between the club and the fans. What had started as an ‘app’ is slowly and surely evolving into a platform, one that can define the future of the club and even the sport it represents, by connecting fans, players, sponsors, broadcasters and other service providers. Sports bodies and clubs that are successful in creating and evolving successful fan engagement platforms will end up winners in the digital era
Consumer BU, Wipro Limited
Anil Jacob leads the New Age, Media and Education consulting team at Wipro. He currently focuses on media-related digital product channel and platform development, digital marketing, predictive analytics in product development, legacy modernization and automation in various media sub-sectors. Anil holds a bachelor’s degree in computer engineering and has 20 years’ experience in the IT services industry.