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Hammers, Nails, SmartPhones, and Sports

February 2, 2012

There’s an old saying that goes something like, “when you are walking around with a hammer– everything looks like a nail”.  Regular followers of this blog know that we are doing some interesting work at the intersection of sports, mobile and social media.

Almost every day it seems that something relevant to our sports social/mobile work  crosses our radar.  It’s incredible how fast things are changing with respect to information consumption– in particular sport-related– and its transition to mobile.

Consider the factoids below, most from just the past couple of weeks, that suggest 1) we are going mobile, 2) sports continues to consume us and 3) we want our sports experiences to be mobile too:

1) We are going mobile

  • Facebook’s IPO registration documents suggest that, as of Dec ’11 50% of its 845 million active users were doing so via the mobile app
  • More than half of adult cell phone owners used their cell phones while they were in a store during the 2011 holiday season to seek help with purchasing decisions. During a 30 day period before and after Christmas according to a new study just released by Pew here
  • As noted in this post, Mobile Web minutes have recently surpassed non-mobile Web Minutes
2) We are a culture consumed by sports
  • If you buy into the fact that the intrinsic value of an asset is usually measured by its price and that price is a function of supply and demand, check out where Sports Content stands in the context of Cable TV content pricing .  Since supply is limited, the high price of sports programming is driven by it’s consistent high level of demand.

It’s been a couple years since we last took a detailed look at the way your cable dollars get split up. Takeaway from our 2010 review:You pay a whole lot of money for sports TV, whether you like it or not.

Let’s take another peek, courtesy of SNL Kagan and Barclays analyst Anthony DiClemente, who has an updated list of wholesale prices by channel* (the list on the right is for ad rates, which we can ignore for the purposes of this story):

Takeaway from today’s chart: Nothing has really changed — you’re still paying a lot for sports, and you’re paying a lot for ESPN.

  • The NFL late last year signed 9 year extensions with its broadcasters that will boost revenue 60% over that period.  And just last Sunday night the NFL’s steamrolling success was profiled on 60 Minutes in a piece that concentrated on Roger Goodell’s leadership.
  • The NFL is only one example of the continued escalating valuations.  With rare exception, similar to college tuitions, sport-content related pricing from tickets to ad rates to league TV contracts continue to escalate despite a downward economy.
By no means an exhaustive analysis, the items that crossed our bow in just the past couple of weeks sure show we continue to love our sports and pay big for the privilege of being pro sports fans!
3) Sports is going mobile
Every week over the past couple of months we have observed at least one new announcement concerning the launch of a mobile app seeking to both capture and enhance the enthusiasm of fans watching the games they love.  Are these New Market Entrepreneurs looking to create demand because technology now allows them to bring amazing capabilities to the palm of our hands?  Or are fans clamoring for it and they are rapidly addressing a need?
At this point, it’s still unclear.   However, this much isn’t– ESPN, arguably the world’s most sophisticated sports content provider, recently announced that delivery through the mobile platform is its number one priority.

As a pioneer in the mobile media space, ESPN has long seen the value of reaching fans on-the-go with sports scores, video highlights and specialized apps to feed their passion. But rather than view mobile as the oft-described “third screen,” the sports media powerhouse refers to it as the “first screen,” according to Michael Bayle, VP and general manager of ESPN Mobile.

In a keynote talk Thursday at MediaPost’s Mobile Insider Summit, Bayle explained that instead of determining how to shoehorn its programming from traditional media to mobile platforms, the process is now reversed, with mobile becoming the starting point.

“What’s taking preference now is to try to get as ubiquitous as possible. Program and design from the mobile standpoint first, then extrapolate what could be applied for the PC, television and print experience,” he said.

Driving that heightened emphasis on mobile is that it represents ESPN’s fastest-growing audience.

Bayle pointed out that its mobile audience across its mobile properties has surpassed 20 million, with users spending 45% more time with ESPN mobile content in 2011 than the prior year. ESPN Mobile now ranks as the company’s fourth-largest network and it has 150,000 people plugged into its mobile offerings at any given time.

Read more

Then there’s this research published last November outlining the degree that major league sports fans are interfacing with their favorite teams via their smartphones and the ‘generic’ social/mobile apps like Facebook and Twitter.   Read more.   Below are the highlights:
Given this rapid adoption of smartphones by average consumers, we were curious to see if social sports fans (i.e. fans who follow pro and college sports team on Facebook and / or Twitter) were adopting smartphones at similar rates. Turns out they’re not. Sports fans adopting smart phones WAY faster the mainstream average. In some cases, 9 of 10 avid fans already have smartphones. So for any sports marketer who didn’t get out of bed this morning thinking about smartphones, then consider this your wake up call.

So what does this data mean?

As you can see, fans who follow American team sports on Facebook & Twitter are in some cases 2x more likely to own smart phones than average. In some cases, nearly 100% of survey respondents indicate smartphone ownership! That’s staggering. And for sports marketers who still thinking the iPhone is the only game in town, it’s not. While more Twitter followers own iPhones, more Facebook fans own Androids. And since Facebook has more people, Android has actually surpassed iPhone overall.   Read more

Needless to say, we are bullish on this space.  The trends mentioned above combined with newly compiled fan surveys suggests that sports and mobile will make great bedfellows.  More importantly, ESPN’s announcements regarding the importance of mobile is profound.  We see ESPN as a leading indicator here.  If they have made a move as bold as the one described above, ladies and gents– we have market validation!
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One Comment leave one →
  1. February 4, 2012 12:40 pm

    Great post, Mike. It’s hard to fathom all that mobile brings.

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