The sports industry was facing challenges long before the pandemic took hold. Yet Covid-19 has driven home the need for clubs and teams to diversify their core offerings and rethink the ways they interact with their audience to increase fan engagement and open up new revenue streams.
As many sporting events have been cancelled worldwide or held without spectators, clubs need to claw back the losses from unsaleable tickets and impacted sponsorship deals. Increasing fan engagement digitally has become a critical priority. As the industry struggles to survive, new technology in sports is needed.
The future of sports, in fact, lies in embracing digitisation and incorporating innovative fan engagement solutions underpinned by blockchain technology as part of clubs' and teams' wider digital strategies. Through digital fan engagement, clubs can adapt to appeal to a younger 'digital native' and foster a sense of loyalty and belonging across geographies. They can open up new revenue streams and improve ROI for investors and sponsors alike as many aspects of the game move increasingly online.
Through cutting-edge solutions enabled by blockchain technology, teams can significantly increase fan interaction both online and offline, unlock new sources of profit, and encourage greater interaction with team sponsors.
The urgent need for new technology in sports
Like many industries, the sporting industry has historically found it difficult to keep up with the rapid pace of technology. New generations of fans that are both geographically dispersed and accustomed to interacting online are seeking the same kind of fresh solutions from traditional clubs that they expect from other areas of their lives, such as social media or online gaming.
The rapid growth of esports, for example, has served to place further pressure on clubs and teams that fail to optimise their online presence. The global esports market is estimated to reach US$1.6 billion by 2023 with the majority of this revenue coming from sponsorships, merchandise, tickets and streaming. At a time when stadiums are still slowly reopening with limited capacity, clubs find their target's attention being turned elsewhere.
But while the majority of sporting establishments knew the need for change was pressing, they were completely caught off-guard by the pandemic. Losses from ticket sales alone will run into the billions of dollars for the National Basketball Association (NBA) while the Premier League estimates a collective loss of UK£500 million (US$660 million) from rebates to sponsors, broadcasters, and lost ticket sales. With the double-whammy of lost revenue and fan attention, now, more than ever, sports and technology need to align to increase fan engagement and generate new revenue.
Digital solutions with blockchain technology
With a clear evolution already occurring in sports accelerated by the events of 2020, sports organisations are increasingly relying on innovative digital solutions, underpinned in part by blockchain technology, to enable their digital transformations.
Not only can blockchain serve to connect a club to its fans faster, easier and more securely, but its immutable and cryptographically secure technology can enable game-changing solutions such as digital collectibles, fan tokens, and loyalty and rewards programmes.
Several major sporting organisations – from top soccer clubs like FC Barcelona and Juventus to the National Basketball Association (NBA) – are already utilising fan tokens underpinned by blockchain technology to engage their fans and create new revenue streams. They're using fan tokens that act as the club's own virtual currency and can be purchased with fiat currencies like pounds, dollars, or euros.
Sports fans can then exchange these for merchandise, collectibles, or even exclusive matchday experiences. Fans can also use their tokens to accumulate voting rights in decisions that affect their club, further deepening their affinity to it. Fan tokens have proven to be a hit so far for clubs like Barcelona, whose first token sale sold out in less than two hours, raising US$1.3 million.
Digital collectibles such as digital trading cards expand on an already popular revenue stream for clubs – but take it to the digital realm. By moving away from physical memorabilia, fans can trade more easily online across the globe. Blockchain technology allows clubs to create completely unique one-off digital assets or limited-edition digital collections that are provably scarce and secured on a transparent digital ledger.
These digital collectibles have several advantages over traditional trading cards. They can never be destroyed, forged or replicated, and they have a completely transparent cryptographically secured audit trail that allows fans to prove ownership. They're also designed to be interoperable, meaning that trading cards can be used over a variety of applications, giving them a broader appeal.
This opens up massive opportunities for teams to incentivise fans to collect all team players or purchase rare or exclusive cards for different prices. Not only are collectible cards and other memorabilia, such as in-game items, a great way to increase engagement among younger fans, but they can be very lucrative for clubs as well.
Loyalty and rewards programmes
Blockchain-based solutions can turn the whole concept of loyalty programmes and rewards on its head. Convoluted loyalty programmes that give very little benefit to the customer are replaced by a transparent and satisfying experience that increases digital fan engagement while providing verifiable engagement data for teams and even for sponsors and business partners.
Blockchain-powered loyalty platforms allow for the creation of a frictionless ecosystem for clubs and their sponsors that's secure, transparent, and easy to scale. This is a potential goldmine for clubs when it comes to proving the quality and frequency of their fans' interactions (and therefore the ROI for their sponsors). Thanks to blockchain’s immutable and transparent technology, sponsors can trust the veracity of the data.
Through blockchain, every record and transaction can be validated and processed, proving ownership of rewards and providing transparent audit trails that give sponsors greater insight into fans' preferences, helping them create more targeted deals that encourage profit-building behaviour. This leads to improved ROI and a more fruitful and transparent partnership with the club.
Sports fan engagement solutions for your team
Solutions like the above may sound complicated or expensive for clubs to implement, yet they can be easily integrated with existing infrastructure to minimise set up time, minimise disruption, reduce spend and maximise value.
Protokol provides highly flexible solutions for the sports industry that can be customised to suit your team's specific needs. Whether your main goal is to boost fan loyalty, increase fan engagement or unlock profitable new digital revenue streams, we can help you meet your goals.
Our cutting-edge digital sports industry solutions are helping clubs keep pace with a digital age as well as unlocking new revenue streams that can help teams mitigate some of the losses from the Covid-19 pandemic.
What's more, all Protokol’s solutions are designed with interoperability in mind so that they integrate effortlessly with your existing infrastructure and partners' systems and applications. We even offer an equally innovative pricing system and revenue share model for our Fan Tokens and Digital Collectibles solutions, to deliver maximum value for your team with minimal investment.
It's no secret that most teams around the world are failing to reach their full digital potential and establish an ecosystem that encourages and rewards fan engagement. The future of sports includes a far greater focus on digital initiatives to drive revenue and engagement while increasing ROI for sponsors. More specifically, the future of sports will be driven by digital solutions that engage, reward and monetise the fanbase effectively, solutions such as loyalty and rewards programs, fan tokens and more.
Discover how to unlock your team’s trapped digital potential with the help of Protokol. We’ll explore how innovative solutions such as fan tokens, digital collectibles and loyalty ecosystems can help your organisation increase fan engagement and capitalise on digital revenue streams. Book a free consultation with our experts here.
About the author: Lars Rensing is chief executive and co-founder of enterprise blockchain services provider Protokol. He has more than four years’ experience in the blockchain industry, helping to lead and co-found ARK, the open-source blockchain platform which underpins Protokol’s blockchain services. He is passionate about helping everyone from startups to enterprises unlock the opportunities of blockchain technology for their business, and as a result currently also serves as an adviser for a number of startups leveraging blockchain technology.