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New Media in Sports: Risk v. Reward

May 2017
Client Alerts/Reports

New, interactive media channels can be lucrative revenue sources and fan engagement platforms for leagues and teams at all levels, but they can also present several risks that sports organizations should be aware of. Loeb & Loeb partner Douglas N. Masters explores these potential pitfalls and highlights the NCAA’s early success in pushing access to its games online.

The full video transcript is below.

Teams are looking for ways to capture the attention of their fans because they want to drive interest in their team, in their sport, and engagement. They also want to provide opportunities for marketers and advertisers who will pay for new channels.

I think there are a couple of risks. There's risk of one channel cannibalizing another. If you provide web content and you also have TV or radio, you have to make sure that you're not cannibalizing one against the other. Then you also have to balance an over-saturation that can make somebody too accessible, where it kind of devalues the access.

I think the third risk in some of the engagements is that while the interactivity that you see in a lot of new media is a powerful tool to drive engagement and interest, you also lose control a little bit. You have to be willing to deal with some of the risks that come when you are allowing your fans and the users of the social media to interact with you in ways that allow them to comment and bring content into those platforms as well.

The NCAA:  A Success Story

The NCAA was an early adopter in pushing access to the games online. There was an app – first computer-based and then mobile app-based access to the tournament games. That was controversial, because CBS pays a lot of money to be the broadcast partner. If you're going to give the games away on video content, what's that going to do to the viewership and to the value on the TV side?

It turns out that instead of cannibalizing, it really was additive, and they were able to generate new revenue from that, probably new fans, and new interactive experiences. So, you could watch the videos. You could have a Twitter feed going alongside it, so people could comment and there could be more interactivity in ways that weren't available on television. You could rewind. You could pause. You could do things that you, again, couldn't do on linear television. While it was initially controversial, I think it was a big success and showed others a good model to be considering going forward.