Impact of Web3 in Sports
The Impact Of Web3 On The Business Of Sports
November 1, 202213:09 PM
Impact of Web3 in Sports
November 1, 202213:09 PM
The sports industry was typically considered slow-moving and conservative, typically not investing in or adopting the latest technologies. Nevertheless, some of its unique characteristics, such as unmatched customer (fan) loyalty, mass market appeal, and a high tendency towards marketability (athletes, teams, leagues, and governing bodies as attractive platforms for sponsors, media, and other stakeholders in the sport-commercialization-nexus) allow it to be at the forefront of new technology and data trends.
Similar to how the rise of social media driven by the adoption of smartphones transformed our digital experience more than two decades ago, the potential of web3 in sports will significantly change how we communicate.
Blockchain, an electronic ledger of transactions that is hard to modify or hack, has spawned a myriad of innovative and valuable applications, including cryptocurrencies and non-fungible tokens (NFTs), which include a variety of which have made it into the vocabulary of the world of sports fandom and business in recent years. Web3-based companies and sports bodies have collaborated; however, it has sometimes been the least attractive.
There's no doubt that there are many benefits of the current governance system, just like the system has had many users of web 2.0, such as shareholders, employees, and executives. The question is whether there's an opportunity to create the creation of a new model where the decision-making process is truly shared that we do not consider blockchain and innovation just in terms of better fan monetization, but in what ways it can provide a better way of governance and ownership between executives, players, and owners.
In a moment where the world is shifting away from centralization, the primary issue concerns ownership in sports. This is the rising private equity and the more centralized institutional ownership of leagues and teams. The private equity fund is purchasing restricted partnership stakes across teams and, in some instances, taking over whole leagues. We're looking towards the near future when fewer owners and decision-makers in professional sports exist.
There are leagues that, while not all-inclusive, discuss sharing a percentage of ticket sales or sponsorship with players or partnerships that align with the mission. We're taking it a step further by extending discussions to decision-making on the governance of profit sharing and long-term profits.
The world of sports ownership has changed over the past 20 years, moving from a diverse group of high-net-worth, single owners usually motivated by pride in their communities along with local commercial interests, to an increasingly sophisticated set of owners, motivated by the importance that intellectual property has, as well as real estate, and the scarcity of assets. But little or nothing has changed about the ownership of teams and leagues for players or their fans.
While the next stage is likely to be dominated by further control of ownership institutions that are larger or more prominent, those same factors that shaped Web 3.0 might usher in an alternative model. Web3 on the business of sports is highly in demand.
Even though web 3.0 and Metaverse technology are still in the early stages, their full potential is yet to be realized; however, sports organizations are investigating ways to use their communities and assets to improve the interaction of fans and increase engagement with these new technologies.
The world of sports and particular sporting events are required to be more interactive as people are looking for more immersive experiences in which they can interact with the athletes, teams, and their fans to improve their experience. The business requires new ideas and formats that provide an ever-changing and thrilling fan experience.
The excitement of live sports is built on shared experiences. Sports will try to take advantage of these technologies that bring the joy of enjoying a shared experience in a virtual space and, in the process, provide sporting experiences unhindered in physical space, thereby opening up unlimited possibilities.
Virtual worlds could also help improve performance in sports, regardless of whether you're a professional athlete branding. For instance, people who want to make a career in football could have the chance shortly to practice at home in a virtual environment and then evaluate their performance against professional players such as Ronaldo and Messi.
The core of web 3.0 development is decentralization. A significant feature of web 3.0 will be the decentralization of data ownership and the transfer of control in the direction of content makers and away from large platforms like Facebook and YouTube. An excellent example of how this might impact the world of sports is through athletes' data. Web 2.0 is increasingly scrutinized by athletes as they do not have control over their data or the way it is utilized.
For instance, in optical tracking, which is utilized in sports, technology providers collect and analyze the athletes' data. However, athletes need help accessing this. With web 3.0, the concept is that you are the sole owner of your content, which means that the control shifts back to athletes, who can effectively use and leverage their data for their benefit.
For rights holders and sports organizations, the challenge for the near future will be how they could "work with companies like Meta to build communities" in the sports sector. This is a critical concept in internet 3.0 and the meta-verse. The metaverse is expected to improve the level of engagement and loyalty of fans and create virtual communities of sports fans who are watching freshly and excitedly. This is an exciting future for sporting events.
In addition, NFTs (non-fungible tokens) are anticipated to play a significant part in how the metaverse will alter the future of sports. NFTs are unique cryptographic coins that cannot be duplicated and are based on blockchain technology.
Combining NFTs and the metaverse provides the possibility of new revenue streams through tickets, increased engagement of fans, as well as new methods for casters or sponsors to get involved in the sport and enhance their visibility beyond the TV or live event. This could be done using avatars made of NFT "wearables or NFT season tickets for virtual stadiums, as well as NFTs of a sports team's kits with their sponsor's logo.
Sporting organizations must benefit from these new possibilities to improve the experience of fans, increase the potential of their revenue, and optimize their usage of the online world. These ideas will likely be implemented in the next five to 15 years.
The main concern is: will this only increase the already substantial amount of time spent in front of the computer, watching digital content? Some believe that these innovations have the potential to enhance our 'digital time' as well as enhance our digital habits "with the potential of greater awareness, connection, and embodiment".
A greater reliance on technology will undoubtedly increase the amount of time we spend on screens which highlights the importance of optimizing experiences to ensure that they are of a high-quality time, which enriches our lives in physical terms. Future digital experiences will aim to establish personal connections that improve our daily lives and, in the process, cut down on the endless scrolling' that is the norm in our current digital experience which could be a better usage of time.