South by Southwest (SXSW) continues to be one of the best places to get a read on the ‘what’s next?’ question for tech and entertainment.
A ten-day convergence of parallel tech, film, interactive media and music conferences, festivals and summits, SXSW has been held in Austin, Texas annually since 1987.
After attending this year’s edition, here are some of the key learnings for the sports industry.
AI is not the new NFT
I came into the festival expecting generative artificial intelligence (AI) to be this year’s non-fungible token (NFT)/crypto (i.e. absolutely everywhere but a mixed bag of how meaningful or applied any of it is). However, I was pleasantly surprised to see that one of the main discussion themes was on immersive experiences, both within sports but more broadly across the entertainment industry.
Seven League founder Richard Ayers whipped attendees into a rallying call and response chant of “F#@K FANS” during his session on ‘Sport and immersive: The past and future of fan engagement starring Muhammad Ali’.
First slide of my talk @sxsw tomorrow, Sun 12th @ 10am in the Four Seasons ballroom. Too strong?? #sportsbiz #sports #immersive #sxsports #ve Sport And Immersive: The Past and Future of Fan Engagement Starring Muhammad Ali https://t.co/FEypR9KSDE pic.twitter.com/S4TJFpA9L9— Richard Ayers (@richardayers) March 11, 2023
The focus on the immersive experience as the final product of technology, rather than leading with the technology which underpins it, seems to be a more sober, nuanced discussion of how Web 3.0 and metaverse activities (or ‘activations’ from the brand side) can be deployed in practical terms.
I participated in roundtable discussions on this topic with brand, tech and sports leaders hosted by the UK Department of International Trade. The biggest challenge identified is onboarding regular fans/users into metaverse experiences, as existing platforms appear complex and convoluted to non-Web 3.0 natives. This was disputed by the Meta representative at the session (for obvious reasons), but there was acknowledgment that the challenge of “mainstreaming” this new technology is very real.
An issue specific to sports is how rights holders can build genuinely engaging immersive experiences when their most valuable assets (live broadcast rights) have already been sold and are therefore inaccessible to any new initiatives.
The consensus was that gaming still holds the best clues on how to make immersive experiences more seamless to new audiences, as well as cross-pollination of IP from different brands.
Move.ai is one such company practically advancing the hype of an immersive metaverse closer to reality. It uses AI, computer vision, and machine learning for high-fidelity motion capture from smart phones and off-the-shelf camera, eliminating the need for expensive and cumbersome traditional markers.
Crypto still holding on in sports?
As I noted last year, SXSW 2022 had more NFTs and crypto sessions than you could poke a digitally collectible stick at, with 40 official SXSW presentation sessions expressly devoted to the area. For example, this 2022 SXSW panel proposal to hear FTX founder Sam Bankman-Fried “tell the tales of Twitter DMs, where crypto and sports align, and the incredible amount of good they will accomplish with their powers combined” aged like milk.
In 2022, there was an eye-watering amount of money poured into brand activations involving NFTs and crypto. This year that was not the case, with the sports track being the odd exception. Crypto fan token company Socios had a heavy presence in the sports track, sponsoring one of the main industry networking drinks – the same event that was sponsored by Sorare last year. So maybe, within sports at least, crypto isn’t dead, just sleeping? Or, more cynically, is sports one of the last places crypto marketing budgets can find a receptive audience?
SVB collapse – has the music stopped?
Most attendees wouldn’t have ‘second largest banking collapse in US history’ on their schedule for the Friday of SXSW. But the news of the collapse of Silicon Valley Bank (SVB), formerly the 16th largest bank in the US, spread rapidly through the festival.
Apart from initial waves of panic on Friday, the news didn’t dampen the overall mood of the festival. If the music had stopped, most people didn’t really seem to care.
Due to its obvious links to the startup ecosystem, as well as its lean banking model, SVB was an attractive prospect for US startups and international businesses alike. This was also part of its downfall. Following panic spreading online amongst VCs as to the bank’s liquidity, customers rapidly withdrew US$42 billion in only a single day last week, leaving the bank with US$1 billion in negative cash balance. US House of Representatives Financial Services chair Patrick McHenry described it as “the first Twitter-fuelled bank run”.
The collapse of Silicon Valley Bank is a reminder that sport is not immune to broader market forces
Thankfully, the US Federal Reserve joined the US Treasury and Federal Deposit Insurance Corporation (FDIC) in announcing it will cover all deposits, which seems to have stemmed broader contagion within the US banking market.
As much as the sports industry sometimes likes to think it operates in its own world, it is not immune to broader market forces. With rising interest rates, investors are being more cautious with how capital is deployed. Startups are more immediately impacted by this, but it will have profound impacts across all sectors of sports.
Revisiting 2022 predictions
Wrapping up with some predictions from last year’s SXSW, it’s been great to see Overtime continue its role of sports industry disruptor. Following the success of its basketball and American football leagues, Overtime recently announced the launch of Overtime X, a new boxing league focused on highlighting the next generation of athletes in the sport.
Disruptor leagues can create an entertainment product ready-made for a modern audience unencumbered by legacy considerations, and Overtime is leading the way.