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Web 3.0 Will Change Sports Forever: Here's What You Need to Know
Crypto, NFTs, Blockchain and Web 3.0 are going to change sports (and the world) forever.
So first things first.
What is Web 3.0 and why you should care.
It’s the new era we’re about to enter where users get rewarded for using a platform, instead of the platform itself capturing all of the benefit.
You may be asking yourself, “why does this matter?”
Because the active participation athletes and fans have in sports is the single largest opportunity that sits in front of the industry.
Despite living through the Golden Age in sports there is more still to come from the business side of the industry.
Web 3.0 will be one of the major catalysts for those involved in the sports-world to invest more of their time and hard-earned money on sports.
Fans are changing, but their interest remains incredibly high.
Why is the Pinnacle Still to Come?
Despite the investment into the industry and the continued growth it has enjoyed, the reality is that on the digital side of things we are very much still at the beginning of the journey.
Though many think of the internet as well established we are only just beginning to unlock its potential – and that means the same for sports.
Yes, streaming has become mainstream, and indeed every sports team and athlete has a digital presence, but in the vast majority of instances, we have barely scratched the surface.
Web 3.0 is coming. It’s inevitable, just as Web 2.0 followed Web 1.0.
Understanding the underpinning of the next version of the web is critical to sports and building a better future.
In many ways, sports is still stuck in Web 1.0. As an industry, we are very much stuck in broadcast mode, the hallmark of the initial stages of the internet.
For proof, visit any major sports teams website or phone app and look for where the fan can interact. It’s almost never there.
It’s ironic that an industry that lives off the passion and interaction of the fans has been built on limiting fan participation in the digital world.
Change is Happening
For many sports, especially in the USA, change is coming from the betting market.
In-play betting is viewed as active engagement in the industry, though the bulk of that revenue will stay with the bookies and government rather than the sport itself. More importantly, it cannot be accessed by the youth market.
We have seen the NFL engage with Nickelodeon and the NBA is working on a whole new vision for it streaming product to become fully interactive.
Progress is being made.
At the same time, the reason for the reluctance to embrace Web 2.0 does make sense.
Why is that?
Fans are by definition fanatical. Win and they love you. Lose and the banter – especially online – can be more than intense.
Keeping that out and at a distance is safe, which is why it took awhile for sports to invest in the infrastructure needed to understand the fans (data) and have the tools to speak more directly.
But just as sports innovation is accelerating and embracing the capabilities of Web 2.0 - Web 3.0 is now emerging.
As big data, IoT, cloud, 5G, blockchain, AI, and AR/VR converge and accelerate their growth - the web that links them all must adapt.
Web 3.0 and What It Means For Sports
In the simplest of terms, Web 3.0 will end up being the internet of ownership.
The challenge that sports have (which is also the massive opportunity) is that fans have always felt that in an intrinsic way that they ‘own’ their club. Even when supporting athletes, fans refer to them in a personal way as if they knew them like best friends.
Web 3.0 will enable ownership in a whole new way. Blockchain, both in the form of cryptocurrency and smart contracts, will likely form the backbone of this as it becomes one of the foundational technologies of the world.
The fan-owned club already exists, but the emergence of this new technology has the potential to lead to its much broader adoption.
There are already several emerging concepts around how the Decentralized Autonomous Organization (DAO) could be implemented in the industry.
So far they have played at the edges, for example the Krause House DAO is aiming to buy an NBA Franchise. Yet there are plenty of opportunities for bigger clubs and leagues to use the DAO to their advantage.
A minority DAO could be a transformative way for these clubs to engage directly on a regular basis with a much broader set of fans than just a couple of high net worth representatives.
There will be instances where famous individuals (probably athletes) launch a DAO to acquire a small stake in a club.
Next Level Disruption
Ultimately the challenge for sports is that innovation and tech are accelerating faster than they are able to keep up with.
Broadcast, media tech, and social media have seen sports consumed real-time across the globe.
The next era, being one of ownership, is likely to disrupt in ways not yet imagined. To date, sports have had to focus on local fans for monetization and supporting the business model.
But as we are already seeing with NFTs, this dynamic is changing.
The vast numbers of followers that premium rights holders have built up will now be tested in a whole new way. At the same time, smaller teams and leagues will be able to access fans in a whole new way.
It should lead to the next big boom for the industry. If we get it right, there is an acceleration in revenues to be untapped. Get it wrong, or bury our collective heads, and it could cause disruption that breaks more than a few segments of the industry.
What we must remember is that sports do not live in isolation.
Web 3.0 is coming and blockchain is here to stay. The smart phone and Web 2.0 completely changed how fans engaged with media and entertainment – and therefore sports. The same is going to happen again over the next five years.
Web 3.0 and Blockchain will alter the perception of ownership. This will impact people’s lives in an everyday way and as a result, their expectations of the teams and sports they engage with will change.
If you thought fans had a sense of ownership or entitlement today, wait to see how that grows in the next decade.
The choice before the industry is whether to ignore it and continue as before or to learn what it might mean, understand the potential and harness the next wave of tech innovation to drive fan involvement, and with-it monetization.
We’re just getting started.
Thanks for reading! I hope you found this deep dive interesting.
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