Monday, 29th November 2021

Recovering from 2020: how digital transformation will be essential for sports in 2021

2020 was a difficult year for everyone, with a huge number of industries suffering thanks to the pandemic. This was certainly the case for the sports industry, which saw reliable sources of revenue, such as ticket sales and food and drink at stadiums, decimated. By Lars Rensing, CEO of enterprise blockchain service provider Protokol.

As we move into 2021, the situation seems to be easing, but teams will still find it hard to recover from the losses of 2020 without investing in digital transformation.

To recuperate lost revenue from the past year, digital innovation and transformation is going to be essential for teams who want to create new streams of income and increase engagement of fans in the absence of live game attendance. There are a number of ways clubs can do this, and those that innovate sooner will be more likely to survive in the long run.

Although live games have started up again for most sports, attendance is still limited or prohibited. This means that although fans can watch their teams from home, they may feel disconnected from the action. Sports teams can help to improve their engagement with fans watching from home by exploring new viewing experiences enhanced by digital transformation. For example, clubs can use virtual reality technology to create ‘cheer’ and other reaction buttons for supporters, which can be used during the match to celebrate with the players. These reaction buttons allow fans to feel included in the action, as if they were watching the game at the venue. Clubs can also offer fans a whole new range of viewing angles - putting cameras on the players and even the balls - to further engage them remotely. This allows fans to feel more engaged with the action, letting clubs leverage their remote fanbase and encourage viewing numbers.

Just improving game viewing isn’t enough though. Teams need to be able to engage their fans without games, in order to make up for the losses of last year. Teams also need to be able to attract a younger, digital-native audience, as well as tap into eSports’ audience. This is where blockchain technology comes in. Blockchain can be used to create alternative revenue streams for sports teams, something which will be crucial this year. Perhaps the most popular of blockchain’s offerings for sports is in the creation of fan tokens. A number of prominent clubs, such as FC Barcelona and Dynamo Kyiv, had been investing in these tokens even before the pandemic to broaden their offerings and create innovative ways for fans to engage digitally. Blockchain-based fan tokens can be purchased by fans or earned when they complete certain actions, such as interacting with their club or other fans on social media. The tokens can then be exchanged for exclusive rewards, from VIP events to early merchandise access. Fan tokens solutions not only engage fans in the absence of game attendance, but also allow sports teams to tap into a larger and more global fanbase, even when game attendance returns. These tokens have already been proving extremely popular, and more and more clubs are looking to adopt them. For instance, FC Barcelona’s first round fan tokens sold out in under two hours, at a value of $1.3 million.

Another innovative way that blockchain can be used to engage fans and make up for the losses of 2020 is in the creation of digital collectibles and trading cards. Like fan tokens, digital trading cards and collectibles can be purchased by fans, creating a new stream of revenue for teams hit hard by the pandemic. Digital trading cards also let fans from all over the world play with each other, establishing a more connected global fanbase that teams can capitalise on. In the same way, unique digital collectibles are an inventive way to simultaneously engage younger fans and increase revenue. This is something that has already been successful - the NBA’s Top Shot digital collectibles sold $2.3 million worth of NFTs in 30 minutes this year. What’s more, these digital trading cards and collectibles are underpinned by blockchain technology, ensuring that they cannot be replicated, forged or destroyed, making them a better investment for teams and more attractive to dedicated fans.

We may certainly see the situation for the sports industry improve this year, but that in itself won’t be enough to make up for 2020s losses. Teams that need to recuperate from last year need to diversify their offerings through digital transformation. Only through this kind of innovation will teams be able to get back on track. Investment in digital transformation and creative thinking around fan engagement will not only allow clubs to survive the fallout of 2020, but will also earn the participation of a younger fanbase, diversify revenues and successfully monetise international fans.

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