News & Insight
Demand for live sports experiences is set to continue growing into 2019 and beyond. Here are five questions facing sports rights-holders as they look to capitalise on this to grow their own businesses.
1) Where do I find the new audience for my sport?
There’s a growing demand for live sports experiences – but how do sports rights-holders know who new fans are, and how do they reach them?
More sports fans will watch more events as they seek out different sports experiences. We also predict more people who haven’t previously engaged with sport will become sports fans – drawn in by experiencing a live sports event for the first time.
By analysing their existing fanbase using all relevant behavioural and attitudinal data sources, rights-holders can identify who currently consumes their product and why. This analysis can be used to better engage with existing customers, find similar people elsewhere, and feed strategies to market their products to new audiences they aren’t currently engaging.
New fans can be younger or older, from different ethnic backgrounds, and even from outside the UK…live sport in the UK is growing in popularity, rights-holders just need to use a data-driven approach to identify where they want to grow strategically, and where that new audience fits into their existing fanbase.
However, it’s worth emphasising that younger audiences represent a critical demographic. Our longitudinal data shows positive live sports experiences as children, teenagers and young adults are lead contributors to a lifetime of sports consumption; sports rights-holders can future-proof themselves by putting on live experiences that are captivating their next generations of fans early.
2) How do I ensure happy returning customers?
How much should sports rights-holders concentrate on engaging and acquiring a new fanbase versus retaining their existing fans? What’s the right balance between acquisition and retention?
Few – if any – successful businesses in any industry drive commercial growth by constantly acquiring new customers; their growth comes from retaining customers, allowing acquisition to be the cream on top, not the basis for survival.
Sport is no different. The fastest-growing rights-holders are driving greater retention and putting a layer of acquisition on top, as opposed to solely being on the hunt for new audiences – a healthy mix of ‘traditional’ audiences coming back year-after-year and newly-acquired audiences looking to experience something new.
Cricket is a good example. Over the course of this Golden Decade, Twenty20 cricket has not only offered a shorter-form version of the sport, it has showcased the same stars from the longer-form of the sport, just in a different context. And our analysis of audiences at Vitality Blast games – through our work with both the ECB, MCC and the first-class counties – shows that the shorter-form of the sport has retained a healthy amount of customers and added in new cricket-loving fans who previously didn’t consume the sport.
Critical to keeping existing customers happy, however, is understanding their changing behaviours and asking them how they feel towards a rights-holder, and what they want from their live experience – through everything from regular surveys to monitoring changes in their habits when they’re inside a stadium. This will give the insight required to create ever-more engaging interactions, and develop the products, service and experiences they want.
3) What’s the right women’s sport play?
Professional women’s sports properties are growing quickly – but which properties are the best ones to invest in? Is it appropriate for a football or rugby club to invest in a netball property, or should it stick to its heritage?
Women’s sport has been one of the industry’s great success stories this decade, and this year our data analysis found that attendances for elite women’s sport in the UK will break the half million barrier for the first time.
At Two Circles we’re committed to equality in society, and in sport so much progress is being made that will reverse negative perceptions across a range of areas. Women’s sport is only just beginning its trajectory of positive impact, and it represents one of the biggest growth levers for UK sports attendances – as well as participation, sponsorship and media – for many years to come.
Alongside the societal positives, the commercial benefits of growing women’s sport are clear. For sports that have been traditionally male dominated, it’s a huge growth opportunity. However, rights-holders must be prepared to give women’s sports properties the time and investment needed to mature. Not only will women’s sport grow diverse audiences to which rights-holders are able to sell more tickets, hospitality and merchandise, it will also allow them to have a different conversation with brands, and develop their sponsorship revenue.
Knowing exactly what investment a rights-holder needs to make into women’s sport will ultimately come from understanding audiences better – both existing and potential – and using data to decipher the what, where and why of what women’s sport audiences are hungry for.
4) How far should I go in evolving my product?
How much should rights-holders innovate the live experience at sports events – or the sport itself? How can properties stay relevant in a changing landscape without alienating their existing fans?
The rights-holders that are thriving this Golden Decade, and will continue to do so in the future, are those that understand their heritage and traditions the best, offering a familiar experience that is differentiated to attract previously disengaged fans, but is attractive to new audiences.
The ATP Finals are a good example. Currently held at London’s O2 Arena, the ATP Finals’ live proposition involves a large indoor venue where lighting and music have become a key component of the event. The experience is purposefully different to that of other live tennis events in London – most notably Wimbledon, a largely outdoor and open-air venue which celebrates and embraces the traditions of its history. Both the ATP Finals and Wimbledon have experienced sustained growth in their attendance businesses in recent years – with the differentiation between them crucial in facilitating this growth.
As technology and connectivity open up more possibilities in the types of experiences rights-holders can offer, there is no shortage of available options for sports properties looking to pursue product innovations. The challenge is to understand exactly what innovations will resonate most effectively among target audiences, and which might risk diluting a property’s brand identity or undermine its heritage.
In our experience, data is the single biggest asset at a rights-holder’s disposal in making these types of choices; the attitudes, usage behaviours and spending patterns of consumers are inevitably the best inputs into shaping product innovations.
5) How big should I make my new stadium or stand?
To evolve and introduce new live event experiences, is it best to renovate venues or build new ones? How do rights-holders know how to make the right capital investment?
The ability of a sports rights-holder to know when to invest in stadia, stars and service is a question best navigated by data.
‘Build it and they will come’ is no longer an answer for rights-holders; ultimately they need to understand what the current and potential market they’re looking to grow in wants, and what capital and operational investment that requires. This is best done by combining commercial strategy with primary and secondary research that sizes their potential market for all revenue streams, including ticketing, hospitality, food and beverage.
Critical, too, is the potential market for non-sporting revenue streams such as conferences and events. Sports venues are culturally-significant buildings that their owners should be striving to have utilised 365-days-a-year to maximise their revenue potential.
There are some great examples of organisations who have done that well. Our client Wasps saw a gap in the market in Coventry where there wasn’t a major professional presence; while Brentford has identified that an investment in a new stadium will pay back appropriately because the market is there for them to grow in West London.
In the Premier League, meanwhile, Spurs, Chelsea and Crystal Palace are just three teams who have identified they are able to make a large investment on a new stadium or stand through the knowledge there’s a large audience that wants to consume their product, both football and other sports – something Liverpool has also demonstrated through its Main Stand development, which opened in 2016.