Reclaim, Revive and Recharge your Fanbase and Revenues with Blockchain
Fan engagement has experienced a seismic shift as Covid forced a change in the way we consumed sports over the last year and now as we open up again, teams are looking to reclaim, recharge and revive fanbases and revenue. The move to online and digital had already begun but was accelerated by the pandemic. It has become critical for organizations to find alternative fan engagement and revenue generating initiatives for fans who prefer to consume sports and events through their technology as well as in person.
Teams must digitally transform to enable fan engagement smart stadiums and through fans devices to create loyalty and nurture loyalty. We’ve all seen apps, social and AR/VR begin to change the game, but now we have a new player that has come hard and fast, the blockchain. With the explosion of NBA Top Shot we are seeing the blockchain being introduced as a game changer in fan engagement and revenue generation in a key growth demographic that teams must to take advantage of.
With blockchain technology, users get access to a decentralized network which facilitates transactions in real-time that is further visible on the documents in real-time. As a distributed ledger system it makes the process of sharing documents more secure and transparent, which as you can imagine has limitless potential. Let’s look at 3 areas where the blockchain will disrupt sport and create revenue generating opportunities in a sports industry that is looking to rebuild, reclaim and recharge revenue post pandemic.
The ticketing industry is the perfect fit for blockchain technology disruption and virtually eliminates counterfietinging. Blockchain secured tickets can have attendees’ tickets turn into SmartTickets. Each SmartTicket is assigned a unique, immutable and verifiable ID and transaction on the blockchain, fighting the issue of counterfeiting. A simple verification tool allows event attendees to then easily verify the authenticity of any SmartTicket through a user-friendly interface without needing to understand or even know that blockchain technology is involved, so you can always prove a legitimate ticket.
Blockchain Tickets have proof of ownership which provides teams insights into chain of transfer as well as resale of tickets which reduces the problems of 3rd party resellers since the ticket is tied to a person and device and can only be sold through the teams blockchain ticketing platform. The team also gets analytics on who attended the event and basic information on the attendee for marketing and loyalty purposes.
A blockchain ticket can also be tied to a moment. For example, a player scores their 50th goal and that clip is then immortalized on the smarticket. This ticket can then be used as a virtual collectible for the fan or can even be sold on a virtual marketplace(like NBA Top Shot) with the team taking a percentage of sales creating additional and perpetual revenue.
2. NFT’s and collectibles
Before we get into the benefits, let’s quickly describe NFT’s using Wikipedia’s definition: A non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files. Access to any copy of the original file, however, is not restricted to the buyer of the NFT. While copies of these digital items are available for anyone to obtain, NFTs are tracked on blockchains to provide the owner with a proof of ownership that is separate from copyright.
NFT’s have created opportunity for fans to “own” a piece of the action through the purchase of video clips or “moments”(like Top Shot) or other crypto collectibles. This market has absolutely blown up in the last few months with not only the NBA but UFC, WWE and even athletes like Tom Brady and Gronk selling unique NFT collectibles.
NBA’s Top Shot sales alone accounted for US$500 million in transactions in the first three months of the year. This was a third of the total US$1.5 billion in NFT transactions, according to DappRadar, which tracks blockchain markets.
The Golden State Warriors were the first US professional sports team to issue its own NFT collection, which includes limited-edition digital versions of championship rings and ticket stubs. The Warriors were first but other teams from all sports are quickly jumping in the waters as they see the value in this space.
NFT’s as stated above, can tie into tickets or be sold individually to fans and create a memory that is unique and gives the opportunities to either “show off” or sell on the market which gives teams an additional and perpetual revenue opportunity through a team provided marketplace platform. Goodbye single use collectibles that you can only sell once.
3. Fan Engagement(Loyalty programs)
With blockchain fan tokens, organizations can deliver loyalty programs that encourage sports fans to become more involved as well as to earn rewards for their involvement and have votes and exclusive benefits only available to token holders. AC Milan and Barcelona have had extremely successful fan token rollouts and have taken advantage of a completely new revenue stream through the Socios fantoken platform.
Fan tokens are created by teams on the socios.com platform to reward fans, provide access to exclusive content or experiences, or raise funds.
The tokens provide owners the voting right on team polls such as uniform designs, team slogans, logos or even lineup cards or plays should a team decide to get crazy. The fan token can work like a fan club membership and provide exclusive benefits to token holders based on the amount owned. It’s up to the organization to get creative and design the benefits and the opportunities are only limited by imagination.
These fan tokens can be sold on secondary marketplace for profit as the team gets better much like a stock or sports card. Fans can invest in their favorite team and feel like they are almost owners without actually being owners. This is next level fan engagement.
While this all sound wonderful and magical, there are still a free drawbacks to consider
The blockchain takes a tremendous amount of energy to produce and maintain as evidenced by the server farms and mining rigs scattered throughout the world. The hope is that future enhancements bring down the computing power needed for this decentralized technology, making it “greener” and less energy consuming.
Currently, the Ethereum blockchain where most fantokens are hosted can only complete 30 transactions per second which is painfully slow, while the Flow blockchain that hosts NFT’s such as Topshot can complete up to 10000 transactions per second. 10k per second may sound like a lot but it still isn’t enough speed for applications that can require hundreds of thousands of transactions per second like a national ticketing platform. Ethereum 2.0 promises 100000 transactions per second and even newer generation blockchains are said to offer millions of transactions per second which will alleviate this critical bottleneck.
There is a lot of speculative money being thrown around in cryptocurrency and NFT’s and while there is a bubble factor, the technology is solid and just like the dot com and pp bubbles the cream will rise to the top and the strong will survive.
There is an unlimited array of uses for the blockchain available for organizations. The key is to work together to create a strategy and get ahead of the game for utilizing the tech to drive revenue in your organization. This is a brand new vertical which provides teams the opportunity to be leaders, create runway for the business and generate revenue in an industry that is looking for new ways to grow and engage the key young demographic that has become digital first. If the teams with the IP don’t adapt quickly, third parties will take that revenue much like what happened in the fantasy sports space. This makes it even more important for teams to act now to take advantage of this space while it still evolves. The time to Reclaim, Revive and Recharge sports fan bases and revenue after a lost year is now.