Why Web3 + Sports Are Perfect Together
5 Use Cases that demonstrate how Web3 can power a new value exchange between fans, leagues, content owners + creators.
Sports is enjoying a renaissance in the United States with the repeal of PASPA, powering legal wagering and the mobile gamification of sports.
Coupled with the emergence of NFT’s through NBA Top Shot and other digital collectibles, sports is slowly exploring the opportunities and boundaries of digital engagement & ownership with their fans and partners.
This comes at a time when sports needs to capitalize on the attention wagering has created, to optimize their engagement and invent new ways to deliver experiences to fans — specifically with Millenials and Gen Z audiences.
Millennials & Generation Z (and soon, Generation Alpha) Are Different & the Future of Sports as Entertainment Needs to Adapt
This isn’t a profound statement, but when it comes to Millennials & Gen Z’ers the leagues and media companies better take notice.
Today, sports fans are both passionate and index highly in the United States for $200K+ HH Income (double national average)* but sports is losing potency with younger Americans. (*Source: Learfield Fanbase vs. US Census 2020)
Sit and watch a baseball game — or even an NFL game with a 12 year old. “It’s too long.” “ It’s too boring.” Or if they’re in the room while it’s on, 90%+ of the time it’s accompanied by a device on social media or gaming.
If you’re Major League Baseball playing Russian Roulette with your fan base, or a media company who has paid hundreds of millions in rights fees, do you believe that the future generations will sit and consume 3+ hours of live sports packed with ads in the same ways the generations before them have?
What these polls show and what you can readily observe is that Millennials and GenZ need sports to be more active vs. passive. And their primary engagement with sports occurs mostly on social platforms and through memes. They’re less interested in long-form consumption of sports content, and gravitate towards a more social, and snackable experience.
As a result, the gamification of sports entertainment (“Sportainment”), with wagering, play to earn, NFT’s, A/R and fan leaderboards will become the go-to engagement methods for sports in the 21st century.
NFT’s, today largely consist of digital collectibles, have the potential to play a larger role in capturing digital native audiences.
Here are 5 Examples:
Web3+Sports: Access to Exclusive Content
NFT’s to gate Exclusive Access to Content
Creators have been tooling with subscriptions and other paid content since the web made that possible and since then the vast majority have abandoned the independent subscription path, choosing to monetize on Instagram, YouTube, Snap, etc. through ads and sponsorship.
With NFT’s, creators can develop an alternative monetization path. NFT’s can gate access to content through the validation of ownership in their digital wallet. The smart contract within that NFT can govern all aspects of access and rights, including access period (ie-season), access type (pay walled content) and royalties for the original creator if sold or transferred to another wallet.
As more and more media properties integrate digital wallet access, the opportunity for NFT holders and creators to value portability of content and access can create new engagement, excitement and brand alignment with creators and their content.
I was there!: NFT’s as Proof
NFT’s to validate attendance, participation, donation, etc.
NFT’s that can validate a number of things, including that you attended the Super Bowl or NBA Finals, that you’re a lifetime member of the Arsenal Fan Club, or you donated to the Yankees Universe charity to benefit Memorial Sloan Kettering cancer research, and so much more.
NFT’s as Tickets
NFT’s and your digital wallet can serve as your ticket to the next game or event
This may be the most obvious use case as we are seeing this being considered in the music industry.
No one loves 3rd party ticket marketplaces, least of which are the teams and season ticket holders who know that the fees and margins of these companies come at the expense of their ticket investments.
NFT’s as tickets bring a handful of solutions: 1.) Teams and Season Ticket Holders can institute a smart contract royalty for any ticket that is purchased and then resold, allowing them to participate in any 3rd party sales; 2.) NFT’s serve as the tickets themselves through their digital wallet, which can be gated until gametime and then dropped into a user’s wallet; 3.) Those who purchased tickets now have a connection with the team other authorized party allowing you to benefit from airdropped collectibles or other promotions by the teams or the leagues.
NFT’s for Loyalty
Brand Rewards being Issued through NFT’s
This is an area of focus for us at GameDay+, rewarding users and creators for their contributions to growing the community. But for many businesses using smart contracts to deliver rewards and build loyalty can be a valuable retention and acquisition tool.
Today, direct mail + email deliver offers, discounts and coupons from brands and prospects to our digital and IRL mailboxes. When a brand builds loyalty in the future through NFT’s, the smart contract within the NFT can capture metadata about your preferences and govern the rewards that may be issued. For fashion and lifestyle brands, this could be exclusive access to purchase an item, or special collectible for the first 10,000 consumers.
It also allows for the gamification of referrals (ie-refer 1, get 1) that users can share with friends and drop directly into their digital wallets.
NFT’s for Fantasy Sports & P2P Sports Wagering
Fantasy sports is a $22B global market as fans look to socialize and gamify their fandom with friends and colleagues.
For anyone who has served as league commissioner, the process of collecting money and herding team owners is a pain. How about a league NFT that players buy into, which can be appended with stats, wins/losses and convert into a digital trophy to showcase in your wallet where owners can sell the franchise to another player?
The sports wagering market is highly regulated and the states who have adopted sports wagering have been rewarded by massive tax revenues.
However, the business of sports wagering is hard. For sportsbooks, acquiring and keeping customers is expensive and your models are under attack by everyone in the ecosystem to exploit to their advantage. Sportsbooks’ balance the risk to maximize their “hold”. But in a world where users are connected socially and virtually through a digital wallet and have a desire to bet each other, there is a path to leveraging NFT’s and the smart contracts therein to serve as facilitator and validator of a wager.
NFT’s/Web3/Crypto is incredibly controversial, but as we explore new ways for brands and consumers to create mutual value, we’ll see that the smart contracts being developed today will unlock new areas for engagement and commercial opportunities across every industry — and specifically in the business of sports.
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Thanks for reading. For more thoughts at the intersection of sports, media and technology, follow me on Twitter at @michaelcaprio and to learn more about GameDay+ and what we are building at my company Data+Sports, visit our site dataplussports.com.