Missing the goal: Why old paradigms fail in sports tech
Sports tech is absolutely exploding right now. With new ways to watch, interact, and monetize sports revenue streams coming out almost weekly, the current market represents an unprecedented opportunity.
Missing the goal: Why old paradigms fail in sports tech
In a quickly evolving space, sports tech startups must either adapt or fail
The market: 3 Sportstech verticals ready for takeoff
Sportstech is absolutely exploding right now. With new ways to watch, interact, and monetize sports revenue streams coming out almost weekly, the current market represents an unprecedented opportunity. At the junction of entertainment and tech, Esports, NFT’s, and emerging VR sports inhabit some prime real estate. With the lines blurring and market share of these correlated verticals continuing to increase, short- and long-term stakeholders enjoy a highly positive outlook. Metrics show that the average consumer spending on both Esports and conventional sports offerings has steadily appreciated. These trends look set to continue, offering new and continued cross-category synergies. Let’s take a look at three examples below:
Trillion-dollar question: Sportstech in the $1T+ NFT market
In both primary and secondary markets, sales of sports collectibles have been robust. The industry has seen a demand surge for memorabilia, authentication, and other ancillary services. Enter the sports NFT. With NFT’s, fans and investors are now able to own a moment, play, or piece of digital art in a distributed blockchain register. Through the implementation of this tech, the provenance of an item is iron-clad. By tracking trends in the sports NFT space, several patterns emerge. OpenSea, a major sports NFT marketplace, sees 70% of their total sales volume from men, with around a third of customers in the coveted 25-34 demographic. These results reflect trends in overall sports spend and viewership, signaling a strong outlook for sports NFT’s.
New Arenas: Esports and Streaming
With millions of users playing and watching gaming content on platforms like Twitch, and in huge, big-dollar tournaments, Esports forms a major pillar of the new sports economy. Building on success across simulation, arcade, and MMORPG format game niches, Esports leagues, and streaming services have exploded in popularity over the past decade. When tracked from quarter to quarter or year to year, the exponential growth of Esports is clear. The format has given rise to YouTube megastar influencers like Mr. Beast and PewDiePie and provided the backdrop for new market forces in the market. Gaming and gaming influencers present myriad opportunities for overlap with existing sports brands and clubs. Leveraging an estimated 250 million regular viewers, according to data from the consulting firm Activate, there is also a ready market in the players themselves. Players, whose annual spend keeps Esports topping streaming movies and media across nearly all demographics, are a ready catalyst for launching brands and products into the mainstream
Virtual reality, real potential: VR Tech in Sports
VR Tech is poised to revolutionize the sports experience across the board. Viewers, players, coaches, even physio staff, and stadium architects are finding more offerings to enable them to visualize, collaborate, or find themselves in the action with immersive sports. Dovetailing the burgeoning Esports sector, VR is pushing the boundaries of what is possible. Entertainment products have seen a general push to incorporate VR over the previous 5-year term, capped with new 360-degree sports leagues. Freemium models and pay-for-exclusive content VR experiences can put fans on the pitch, on the track, and in the center of the action. From diagramming plays or facing virtual opponents in the locker room to simulating a Formula 1 circuit in Texas or Abu Dhabi, VR Tech represents disruptive tech from both sides of the camera. Look for some big moves in the space as both VR capture and VR hardware continue to make leaps and bounds
Seeing the value: forging new partnerships with major brands
The issue is clear. Major, well-regarded clubs, brands, and federations aren’t in the habit of writing checks or taking chances. The abiding feeling has always been “Hey, we built this team/brand, we’re the value add!” And that has been largely true. Considering the cache, broadcast rights established regard in the market is a big part of the equation. A team or brand may have notoriety, easily recognized trademarks, and so many other factors.
Sportstech startups frequently encounter major barriers to entry when looking to secure partnerships and co-branding relationships with marquee brands. Without a solid track record, book of business, or large user base, Sportstech startups have a hard time pitching “up” to the very same clubs, teams, and businesses that would stand to gain the most through partnering with groundbreaking tech solutions. The startup sees value and alignment, but the major brands see only risk. This is both the crux of the problem and the seed of opportunity. Startups need to be capitalized to survive, and established marquee businesses need to innovate to succeed. Simple enough, right? Both benefit from each other but suffer from institutional roadblocks that limit growth. These vision and integration failures, while understandable, are a perfect example of the problem the industry faces moving forward.
Bridging The Divide
So, what’s the solution? By connecting exciting startups with trusted names in sports, HYPE is eliminating barriers between startups and industry leaders. The HYPE model disrupts the broken paradigms keeping new breakthrough tech from gaining traction in developed markets. HYPE implements novel startup funding solutions aimed at building momentum through pilots and partnerships with mega-brands, providing mutual benefit to all stakeholders
As industry leaders, we should be asking ourselves: how can we continue to advance novel and innovative plays in the sports tech space while growing the broader market? Through new approaches and smart synergies, HYPE is engineered from the ground up to launch startups from RTM and MVP into orbit. Building on the strengths of our partner businesses and forging connections for the future of sports tech is what we do. Hit subscribe and follow our journey to see how we do it!
Amir Raveh, President, and Founder of HYPE Sports & Innovation.
Special thanks to Adam Schalit for the great work on editing, optimizing, and proofreading this item.