Tomorrowland 2: What's the point of UEFA's Innovation Hub? And why you should always steal Mark Oliver's ideas

Plus, let's play 'Fortnite: Partner or Parasite?'

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1. What is UEFA’s Innovation Hub?

Jean Baptiste Alliot, head of UEFA Innovation Hub came to the conversation with an open mind and a genuine desire to talk about these and other questions relating to sport’s relationship with the future. This made it a really interesting conversation. Feel free to agree/disagree after hearing it here. 

Here are some of the questions we talked about.

What’s the point of UEFA’s Innovation Hub? Is it to make money or save money for UEFA? Is it an investment vehicle for sports tech startups, or a signal to the marketplace that UEFA is actively seeking to future proof it’s rights inventory against changes to media consumption habits and the expectations of brand managers in new sponsorship categories? Is the emergence of Innovation Hubs within major governing bodies a blip or a trend? What does it reveal about the received wisdoms in place within UEFA’s strategic plan for football? How robust are the pillars of this longer term thinking? Is an Innovation Hub a luxury item or a necessity? Will it be judged on hard metrics - money made or saved, new ideas coming to fruition? - or softer intangibles such as the development of an innovation culture across the governing body and by extension, European football? What’s the investment model at the heart of the Innovation Hub, is this an incubator, a fund, or something different? Can anyone with a good idea pitch UEFA? How long a runway do new ideas get before they are judged? Etc.

2. When seeking to sound clever and informed on sports market trends, copy Mark Oliver

We all need a frame, a way of making sense of the chaos. When faced with the latest Tomorrowland OTT, d2c, sport-as-entertainment WTFery, I often revisit Mark Oliver’s view of how innovation is impacting the sports business. (Hear Episode 73 of the pod with Mark here)

Here’s a summary, from a piece in Sportcal:

Wave 1 

The first wave of change has been significant but will be largely completed in the next three to five years. It has been marked by six actions. First, experimentation with OTT web-based delivery of audio visual coverage to a variety of platforms - often as a complement to traditional TV coverage - and as a way to tempt Silicon Valley into the sports rights market.

Second, the potential enhancement of sponsorship ROI through direct engagement with fans via social media and OTT delivery and the use of data profiling. Third, investment in building global fan bases to existing teams and competitions via tours and special fixtures and adoption of high-profile foreign players. Fourth, the development of new national and regional competitions in emerging markets, such as the IPL, or the Chinese basketball league or the Asian Football Confederation. 

Fifth, experimentation with innovative new formats in addition to traditional ones – from T20 and then the 100 in cricket, to tennis tie break tens, golf sixes, the hammer cycle series, rugby sevens, Formula E motor racing etc – largely to attract a younger and/or more family demographic. And last, traditional teams and leagues entering the eSports market to help reach those millennials not that into sports. 

Wave 2

The 'second wave' is coming, so be prepared. Digital age disruption of sports is well in progress and is driven by three forces:

•  technological innovation - the ability to connect directly to the fan and know who the fan is;

•  the arrival of new demographics and the rising importance of their tastes – specifically millennials and women;

•  the globalisation of interest – most notably the rising importance of China and India, but also Africa, South East Asia, the Middle East and Latin America.

And now in graphic form...aka my pre-podcast notes.

3. Fortnite: Partner or Parasite?

Across all the digital strategy podcasts we’ve done, the bit I question most often is why sports governing bodies bend over backwards to migrate THEIR audiences TOWARD Fortnite, Facebook, TikTok, Netflix and every other digital platform. It seems very…what’s the word…generous? trusting?...naive?

The underlying assumption beneath the strategy is obvious, it’s about the fear of irrelevance: the tech platforms offer a way to spread the gospel of sport to new - YOUNG - fans. But as I mention to JB Alliot, that’s great for Fortnite etc, they get a valuable audience given to them at zero cost. But what’s the upside for football? What’s the evidence that kids playing Fortnite increases football participation or viewership? File this question under a long standing trope entitled, does televised sport promote sport or television?

The thing about received wisdoms is that they change, and quickly the pillars upon which those strategic plans are built start to shake. Not long ago, the working assumption was that Facebook, Amazon/Twitch, YouTube, Twitter were being groomed by sports rights holder as the successors to NBC, Sky, ITV et al. They would get their cheque books out, buy exclusive live rights and the gravy train would fly through the station as we waved it by, or waved from the train, depending on where you see yourself in this convoluted sports-business-as-gravy-train metaphor. 

Does anyone think that anymore?

4. The end of the beginning for the data story  

Phase 1 of the digital project was based on a simple story: Analogue to digital; B2B to D2C; Blockbuster to Netflix; the Luddites v the Enlightened. Even Giles Morgan got it.

Picture it as a big city marathon: a huge disparate group of rights holders spread out over a punishingly long course, each running their own race in their own time, against a small group of other runners each with their own agenda. There’ll be the Kenyans at the front and the bloke in the deep sea diving suit at the back and everyone else in small, discrete clusters in between. And there’s probably no finish line. Or at least the finish line is different for different rights holders and different sports. Some - a minority? - will get close to complete digital transformation, while others will settle for something less, a compromise position that doesn’t break them en route. 

But is getting stuck halfway worse than not doing it at all? What if you do all the work - build the tech, change the culture, recruit different types of people etc - and then you find out that the Long Tail was just a nice idea for a book and your niche OTT channel ends up parked in someone else’s digital cul de sac, so you’re still locked outside the walled garden of first party data and still reliant on telly and sponsors to pay the cheques. What then?

5. Did you see Two Circles report about hybrid strategy?

It wasn’t saying TV was going away, far from it.

But it was noticeable that the language has softened. It contained words like ‘hybrid strategy’ and ‘hedging’.

But Covid-19 will bring into greater focus the reliance on one type of media platform – primarily pay-TV broadcasters – to deliver growth. And it will require rights-owners to develop a new model, a hybrid model, where they cut and sell rights for pay-TV broadcasters, free-to-air broadcasters, subscription OTT platforms such as Amazon or DAZN, ‘owned’ D2C streaming services and free digital publishers – all in the same rights cycle. The future is growing your portfolio of media partners, not limiting it.

And this was a nice stat.

In 2019, live rights accounted for 86% of sports media rights value globally – however, our data shows of total sports video content consumption, the average sports fan watched 55.4% live.

It made me wonder about the value of highlights, which have slid down the pecking order, from a rights-earning end in themselves to a top o’ funnel marketing tool given away with cornflakes*.

(*The Match of the Day caveat. Yes, the BBC still pays a lot for highlights.)

6. The Netflix Price Point Problem

As discussed on The Bundle podcast with Yannick Ramcke, the irritatingly popular German millennial, the Netflix for Sport thing has a tricky challenge at its core: Paying top rights whilst trapped by a price ceiling.

This from the Two Circles report:

Though one day ESPN+, Now TV and others may well prove commercially successful, their long-term profitability won’t be known for years to come; premium sports rights cost billions, and take significant subscriber numbers to commercialise at a ‘Netflix’ price point, a model DAZN is trying to crack. Sport will still continue to thrive as a media property, but until a proven, long-term viable pivot is established, pay-TV broadcasters simply cannot continue their current levels of spend if there’s increasingly less revenue coming in.

7. The Big Finish: Ask not what Unofficial Partner can do for you, ask what you can do for Unofficial Partner

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