Why “Owning the Customer” is Sport’s Next Battleground

D2C is coming. We don’t know exactly when, but it’s coming. It’s happened in many other media industries and it is only a matter of time before sport’s media subscription model is disrupted.      

Of course having new entrants in the market is good news for those seeking more competition in the media space but sport should brace itself for the likelihood that the cosy days of guaranteed income will soon come to an end. Those seeing the entrance of Netflix, Amazon, Facebook et al into the market as being nothing more than the continuation of the status quo forget that these businesses have not grown so big, so quickly by de-risking commercial ventures on behalf of their partners.

No, scale is achieved by all partners taking a long-term view and being rewarded for what they contribute to the shared vision. If you want to mitigate your risk, you can’t expect also to share in a higher portion of the upside.

No-one knows quite what the sports media landscape will look like in two – let alone ten – years’ time but what is clear is that there is going to be an element of disruption and sport needs to do the hard work now to be ready for it and to ensure it possesses maximum commercial leverage.

I try to distil this into four key components:

• Who owns the content rights?
• Who has the means to distribute that content to the potential customer base?
• Who has the best relationship with the customer?
• Who has the best relationship with the brands?

The rights sit ultimately with the sport, that much is clear. The means to distribute are with the platforms – be they Sky, BT, Facebook, BAMTech or whomever. I would argue strongly that the media businesses also know – and already commercialise – the sports’ customers far better than the sports do because they have invested in and exploited smart data platforms to engage with them outside of the narrow confines of a discussion about sport. In the modern digital world, the brands go wherever the customers are and so of the four key components, I would argue that sport “owns” only one of them.

Of course, ownership of the rights is a strong commercial negotiating tool but it would seem that to swing the pendulum, the battleground is for ownership of the customer relationship. Win that and the sponsors follow and suddenly it’s 3-1 in sport’s favour.

The big issue is that sport has been slow to understand the role of data in its commercial strategy, tending to see it as another direct sales – rather than strategic marketing – tool. The battleground is understanding what those people are interested in, where they are in their life cycle, what their aspirations are, what kind of brands they engage with, how they spend their money and not about whether they might want to buy a ticket for next Saturday’s match.

There is much work to be done, but there is no reason why it can’t be done. D2C is coming. We don’t know exactly where, when or how but it’s coming and to get the best long-term deals, that work needs to be done now.

To read more about our thoughts on how sport should be embracing and benefitting from the digital age, download our FREE white paper here.