Video On Demand Fan Engagement Strategies – The Turning of the Tide?

In recent years, the sporting landscape has dramatically changed how a club should engage its fans and why. For example, in Europe, the ultimate failure of the European Super League in 2021 epitomized the power that fans now hold in influencing the strategic direction of their clubs and highlighted the catastrophic impact of ostracizing or neglecting the fans’ input. This stark realization even led to calls for the radical restructuring of clubs to involve fan representation at the board level, which would directly influence the governance of their club.

In December 2021, Liverpool Football Club launched a new Supporters Board to deliver meaningful fan representation on strategic issues at the main board and executive levels. Fast forward to the present day, the consensus is that fans have never held more power and influence than they do right now, and direct fan engagement is an absolute necessity for the long-term success of any sports club.

Sir Matt Busby famously said, “Football is nothing without fans.” Fans are the lifeblood of any sports club; they dictate the culture; they hold more political prowess than ever. Moreover, they are responsible for a large proportion of the revenue generated by sports clubs.

Globally, sports clubs are at different stages of their evolution in engaging with their fans to build, entice and reward their unbridled loyalty. The fundamental question is, how can they facilitate direct fan engagement to deliver maximum value to both the club and the fan?

In 2019, former Manchester United player and current Sky pundit, Gary Neville, envisioned the future of content creation for sports clubs: “I’ve always wondered why football clubs don’t film their training sessions live. Why can’t that be something fans can dial into and see?” (see references section 1)

This once futuristic vision has become a realization in today’s market, with many sports clubs, leagues, and associations adopting this very tactic. For example, in early 2021, the Ultimate Fighting Championship (UFC) agreed to a multi-million dollar deal with TikTok, leading to live streams of UFC content, including interactions with athletes, training sessions, and extra behind the scenes footage. This type of content has become commonplace. The modern fan demands more, particularly those belonging to Generation Z, whose cultural surroundings have set expectations in this social media-driven age.

The Demands of the Modern Fan

Of the 134 million sports fans in the United States, Generation Z claims the most significant proportion at 38 million. (see references section 2).  They want content quickly, easily, and while on the move. They’re the first generation that doesn’t remember a world without the internet or a mobile phone, and with the social media revolution, how they consume sports has changed. In 2020, Ted Leonsis, principal owner of Washington-based teams that compete in the NBA, NHL, and WNBA, noted that “It’s what some of the big sports leagues are nervous about. Could we lose a generation because we didn’t give them access and the products and services they want?” (see references section 3).

This concern continues to be highlighted within the industry. A study of the North American market conducted in January 2022 and published in the International Journal of Social Science And Human Research concluded that “clubs should continue to increase the accessibility and quality of fan engagement practices” (see references section 4).  As fans continue to consume sports in many ways, outside of traditional media broadcasters, sports clubs must modernize and conform to these changes in consumer habits. Clubs need to build a bridge directly to their fan base, so they can now sell and communicate with them. This is precisely what OTT (Over The Top – any streaming service that delivers content over the internet) services can provide for sports clubs. It establishes a personalized link between the club and its target consumer, allowing the fan to consume the content they want in a way that they want.

Personalization is one of the critical differentiators OTT has in its favor over mass broadcasting via traditional television networks; 72% of sports fans view personalization as necessary, while 71% of them want deeper immersion when watching live-action. (see references section 5).  A whopping 96% of UK fans would watch a personalized television channel if one was offered, and would be willing to pay a premium for the privilege. (see references section 6).  An OTT service can effectively become just that by gathering first-party data that can be used to up-sell and cross-sell fans additional products and services. It can provide a customized viewing experience for the fan. Fans can specifically choose what content they want access to. They can subscribe to premium membership packages, bundle products together, or offer promotions on the club’s retail products. The almost limitless variations a club offers its fans means they can pay for precisely what they want to consume. 78% of “intense” sports fans are willing to pay more for an online video streaming platform than traditional TV (see references section 7), and the personalization of the user experience is a substantial contributing factor.

The Commercial Implications

OTT technology has completely redefined what a “fan experience” is. Fans are no longer just in-person spectators; they’re the consumers of their club’s branded media content and are distributed throughout the world. Although still invaluable, traditionally dominant revenue streams, such as gate receipts and sponsorship, can be highly volatile. They don’t have the same level of reliability that a steady stream of revenue billed directly to fans possesses. The global impact of COVID-19 perfectly exemplified this. The four major North American sports leagues (NBA, NHL, NFL, and MLB) lost an estimated $14.1 billion dollars in 2020, and the value of the sports teams themselves was diminished (see references section 8). While matchday revenues were essentially nullified because live games were being suspended, subscriptions to recorded content rose exponentially.

A Video on Demand (VOD) strategy allowing fans access to back catalog content has helped some sports clubs/bodies to provide additional content to their fans, others have diversified with e-tournaments. Post-pandemic, providing such content also plays a critical role in generating revenue during the off-season, creating a healthy revenue pipeline for clubs at a point when they would traditionally generate smaller revenues.

A move away from traditional broadcaster revenues. Direct-to-consumer technologies mean that revenues can be generated directly from the fans, creating a bond between the club and its fan. This is particularly valuable for overseas fans, who can now purchase content from the club as long as they have an internet connection. Therefore, growing the brand into emerging markets is made far easier, and with the fastest growing regions within the sports market expected to be South America and the Middle East, where growth is expected to be at CAGRs of 12.1% and 11.3%, respectively (see references section 9), having a comprehensive OTT offering to fans will be an absolute necessity to establish long term growth in foreign regions.

Summary

A sophisticated Direct to Consumer Subscription Video on Demand (SVOD) or Advertising-based Video on Demand (AVOD) program for fans is no longer merely a preferential offering for sports clubs but an absolute necessity in today’s dynamic marketplace. The modern consumer expects more and willingly pays a premium directly to a brand they are utterly devoted to. They want to feel part of a community. Part of the very fabric of the club that they adore. The rewards for facilitating this and establishing a loyal fan base who are directly engaged with the club are plentiful. The club receives a steady, reliable stream of revenue while reaching fans they otherwise would not have attained to solidify loyalty between the club and the fan. With a winning OTT strategy, everybody wins!

Our eSuite solution maximizes OTT video revenues and optimizes fan engagement initiatives via:

• Fan lifecycle management
• Payments & billing
• Fan relationship and identity management Incentives, offers & vouchers Product creation, pricing, packaging & bundling
• Fan retention and win back

References and related useful links:

If you’d like to hear more about how we’re helping sports organizations power their media through subscriptions and billing, please get in touch. If you’d like to read more on this topic, see our whitepaper on Managing the Fan Lifecycle

References:

1. https://www.skysports.com/football/news/11095/11788986/off-script-gary-neville-on-broadcasting-training-to-fans-and-pre-match-superstitions/
2. https://twocircles.com/gb-en/articles/boxing-genz-star-stories/
3. https://www.washingtonpost.com/sports/2020/11/24/gen-z-sports-fans/
4. https://ijsshr.in/v5i1/Doc/17.pdf
5. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/technology-media-telecommunications/us-enhancing-digital-fan-engagement.pdf
6. https://www.ibc.org/trends/giving-fans-what-they-want-the-power-of-personalisation/5537.article
7. https://livestream.com/blog/ott-live-video-strategy
8. https://www.forbes.com/sites/justinbirnbaum/2021/03/06/major-sports-leagues-lost-jaw-dropping-amount-of-money-in-2020/?sh=75e83e0569c2
9. https://www.globenewswire.com/news-release/2022/01/13/2366700/0/en/OTT-Platforms-Play-A-Key-Role-In-Sports-Market-Growth.html