We caught up with Tom Fleetham, Head of Business Development, Sports & Gaming, Zilliqa as part of our Rabbit Hole webinar series, to understand how blockchain infrastructure can support sports and gaming organisations, the opportunities and benefits Web3 brings, as well as the risks involved and how to minimise them.
Technology is continuously evolving. With Web2 slowly becoming more and more outdated, top organisations are now looking for the next exciting thing to satisfy their consumer and grow their business.
Up steps Web3.
Sporting organisations have relied on established streaming platforms such as Sky, ESPN and Amazon Prime for the last several years to showcase their content. The deals drive significant revenue, however, with changing consumption patterns with Gen Z & Gen A, is there more that needs to be done to enhance your broadcast, fan engagement initiatives and more to attract and retain this audience?
Is web3 the answer to how these organisations monetize their international fan base and how they are going to engage the next generation via this new concept.
What benefits would Web3 bring?
Web3 is encouraging decentralisation and is opening an entire new avenue into modern-day technology. In Web3, it focuses on the use of decentralised technologies such as blockchain to enable new capabilities and improve upon the limitations of the current eb.
One of the main benefits of Web3 is that it promotes decentralisation, meaning that power and control is distributed among multiple parties rather than being concentrated in the hands of a few. This can make systems more transparent, and fair. This shift could potentially alter the current model of sports orgs/media companies monetising on their fans data, and instead lead to a more even value exchange, where the fan has more control over what they share, who they share it with, and how they’re rewarded for engaging.
How will Web3 work in sport?
Web3 technologies, such as fan tokens and NFTs, have the potential to enhance fan engagement in the sports industry. By using these methods, sports organisations have created digital loyalty programs that reward fans for their support. These programs can be accessed by consumers anywhere in the world, which presents a significant opportunity for sports organisations to engage and successfully monetise the 99% of their fanbase that will not engage with any physical touchpoints of the club.
What are fan tokens?
Fan tokens are digital assets that can represent ownership of a specific sports team or organisation. They are often created as a way to engage with and monetize their fan base. Fan tokens are a fungible digital asset that act as a currency on the blockchain.
In sport, they may be used to access exclusive content, vote on team decisions, or receive other perks and benefits. The value of a fan token is often tied to the success or popularity of the team or organisation it represents, and they can be used as a form of loyalty program to reward fans for their support. They may be issued on various blockchain platforms and can be used in conjunction with other technologies such as NFTs to create a more immersive and interactive fan experience.
Tom adds: “People should be thinking about tokens as something that you are using where the quantity that you own is relevant.”
What to look for when choosing a blockchains?
Every blockchain makes different design trade-offs based on the philosophy of the founder and also the application that they chose to focus on.
Tom added: “The blockchain chosen within a sport entertainment application involves far less risk and importance in decentralisation compared to if you intended to work on a government national application for example.” This can be seen as a fortunate fact that may reassure sports organisations.
What are the risks?
Sports organisations may feel forced into acknowledging Web3 the way technology is currently shifting. One outlining risk is jumping into something that you may not be very well-educated in.
Within the webinar Tom offers strategy advice for sports organisations. He states: “Sports Organisations are better of spending their time finding a good technology partner rather than obsessing over which chain to use”
Look beyond the established large chains and instead look for smaller chains that will be more engaging and will maximise your learning potential that will benefit you in the long term.”
A risk that may hinder the progression of this concept is consumers exploiting the fact that currently these are short term experiments. A problem that possibly could be seen is that consumers may just see an opportunity to make personal profit. This eliminates the meaningful opportunity for a genuine fan to interact.
So why use Web3?
The potential for consumers with these methods is exciting. Tom says: “It rewards fans more tangibly for their loyalty”. Through the use of tokens or NFTs, it can increase the rewards available. This can help drive the success of Web3 in sports and provide sustainable revenue streams for sports and entertainment organisations.