The Rise of Fan Engagement A guide to the new wave of live video and interactive broadcast for sports and media companies Contents

THE DRIVERS OF DISRUPTION TO SPORTS AND TRADITIONAL BROADCAST 04

STAKEHOLDERS 07

THE IMPACT: DISRUPTION TO TRADITIONAL SPORTS 09

THE IMPACT: FAN ENGAGEMENT AND THE BOTTOM LINE 13

THE NEXT GENERATION OF BROADCAST & FUTURE OF CONTENT 16

THE ENABLING TECHNOLOGY 19

USE CASES: LIVE VIDEO EXAMPLES 22

USE CASES: INTERACTIVE BROADCAST 24

NEW RULES: BEST PRACTICES FOR INTERACTIVE BROADCAST 26

REFERENCES 30

2 www.tokbox.com Introduction

Sporting organizations enjoy what In this paper you will discover: many brands spend tireless years and significant marketing budget How disruptive digital technologies fighting for, natural and unwavering have impacted the sports and media brand loyalty. It’s the holy grail for any broadcasting landscape From the proliferation of marketer - customers are acquired at birth, promptly indoctrinated by the The importance of driving fan mobile, online streaming, the generation of family brand loyalists engagement in the digital age rise of social media to more before them to become faithful fans recently, live broadcasting who stick by your side, no matter what. The technologies being leveraged to apps, the way fans watch and build engaging fan experiences Instead of viewing these forces as engage with their favorite disruptive, sports organizations and The new wave of live video and sports has radically changed. broadcasters are uniquely positioned participatory models of sports to embrace this change and leverage broadcast with case studies emerging technologies, creating new and engaging experiences for their fans, How to play by the new rules of helping them stand out from the crowd. broadcast, and win

3 www.tokbox.com The Rise of Fan Engagement // Introduction The Drivers: Disruption To Sports And Traditional Broadcast The way fans consume and engage with sports has changed dramatically. In today’s increasingly fragmented digital world, sports organizations and broadcasters aren’t capturing the attention of fans, and therefore revenue, like they once did. Sports viewing, once considered inseparable from TV, is transforming1. Totally new viewing behaviors have risen from a raft of forces that are converging and disrupting sports content.

4 www.tokbox.com The Rise of Fan Engagement // The Drivers Behavior

Mobile Companion Device 2 Rise In Online Consumption 87% of consumers use more than one device at a time. 74% of mil- Online consumption of sports video grew 388 percent year-over- lennials who use a combination of TV/smartphones during viewing. year from 2013 to 20145 .

Rise of Social Fans Are Not Just Watching, They’re Producing More than half of people under 35 engage with social media AT&T figures show that fans consumed 205% more data than the while they are watching TV content3. previous year during Super Bowl 50. This represents millions of status updates, videos, photos and live video broadcasts6.

Second & Third Screen Growth 4 Millennials Almost a quarter of all video viewing in households with high- 14- to 17-year-olds are abandoning the TV screen at the rate of speed Internet access now takes place on a device other than a 33% for movies and television shows and 26% for sporting events7. television set.

5 www.tokbox.com The Rise of Fan Engagement // The Drivers Technology Content

Incredibly Powerful Broadband Speed Explosion Of Live Streaming Content Over 15 years to 2012, bandwidth increased from 56KB dial up As sports fans cut the cord, they are streaming live sports in to 100MB+. Average broadband speed will more than double droves. Over 15 million people tuned into the first-ever global live from 2014 to 2019 from 20.3 Mbps to 42.5 Mbps8. stream of a regular season NFL game, hosted by Yahoo11.

Live Mobile Broadcasting Apps Video On-Demand Mobile live streaming apps such as Periscope and Meerkat, The growth of video content platforms such as Netflix are giving Facebook Live and even Snapchat have exploded into the main- way to a generation leaving cable behind in who are in favor of stream with Periscope alone claiming 10 million registered users9. on-demand streamed television, movies and sports.

Powerful Cameras At Fingertips Competing Content Fans now have the tools to photograph, film, publish and broad- The amount of sports content has more than tripled in the past cast their own content with the help of powerful smartphones decade while the time people spent watching TV increased just cameras upwards of 21.5 megapixels10. 6.4 percent12.

6 www.tokbox.com The Rise of Fan Engagement // The Drivers The Stakeholders Digital disruption to sports presents both challenges and opportunities for a range of stakeholders. In this new world, where we will later discover everyone is a potential broadcaster, the needs and objectives of those vested in sports are evolving.

7 www.tokbox.com The Rise of Fan Engagement // The Stakeholders A Snapshot

Media Companies Leagues and Clubs

As sporting content moves online, free-to-air Sporting Organizations are striving to engage and grow broadcasters are battling to increase ratings and supporters with shrinking attention spans advertising revenues while finding cheaper models of content and distribution.

Sponsors Fans Sponsors are expanding beyond traditional media to Fans are searching for more personal experiences with the reach their online and mobile audience teams they love and through the technologies they use

8 www.tokbox.com The Rise of Fan Engagement // The Stakeholders The Impact: Disruption To Traditional Sports Broadcasting

Attracting and keeping fans in the stands is getting harder to do. Live attendance across sporting leagues - pro basketball, football, motorsports, baseball and even college football - has declined or leveled off in recent years. While many argue that is due to rising ticket prices and higher-quality video broadcast, the decline in live-audience attendance hasn’t translated to an equal increase in TV ratings or subscribers.

9 www.tokbox.com The Rise of Fan Engagement // The Impact While sports TV ratings and subscriber counts fall, the digital age presents countless more ways for fans to connect with sports content. Disruption to sport and traditional broadcast means sport and media companies must leverage new technologies to engage fans.

Declining Ticket Sales & Sports TV Subscribers

While the US sports market is expected to grow by 4.5 percent from 2013 to 2018, PWC projects that gate revenue will increase only by 2.6 percent13

Sports network ESPN lost 3 million subscribers in 2015 For the first time, media rights are projected to surpass gate revenues and become the industry’s largest segment by 2018 (CAGR 7.2%)14

For the first time, media rights are projected to surpass gate revenues and become the industry’s largest segment by 2018 (CAGR 7.2%)15

10 www.tokbox.com The Rise of Fan Engagement // The Impact Live televised sporting events are still immensely popular, with big games or matches attracting large audiences. However the rising cost of TV rights is a challenge for sports broadcasters.

Rising Cost Of Sports TV Rights

TV rights are projected to rise 9% a year to $19.3 billion in 2018, according to PwC 16

TV networks including Disney’s ESPN, Fox Sports and Time Warner’s TNT and TBS will spend a combined $12.5 billion in the next year for rights to carry professional football, basketball and baseball games and the Summer Olympics 17

11 www.tokbox.com The Rise of Fan Engagement // The Impact As TV networks lose subscribers while shelling out millions for surging broad- cast contracts, sporting and media organizations must look well beyond the stadium and television set.

In order to drive long term profitability, sports broadcasters must harness technology to produce and distribute cheaper yet high quality engaging sports content through channels that will reach millions of viewers.

12 www.tokbox.com The Rise of Fan Engagement // The Impact The Impact: Fan Engagement And The Bottom Line The biggest change that digital disruption in sports is driving is the need for sporting organizations, clubs and broadcasters to increase fan engagement. These stakeholders have long conceded that one-way broadcast is no longer enough.

13 www.tokbox.com The Rise of Fan Engagement // The Impact Since the birth of the internet, the rise of social media, mobile, As sporting organizations, clubs and media and multiple devices, the industry has innovated with a companies grapple with changing sports content number of marketing strategies and technologies to maximize “ consumption and look to maintain a commercial and personalize fan engagement both during, and beyond foothold, they must recognize the importance of gameday. However with the latest wave of disruption dominated engaging their audience and converting fans into by cord cutting, online streaming and live mobile broadcasting paying customers. apps, the need to create and distribute fresh, affordable content that drives fan engagement is more urgent than ever.

14 www.tokbox.com The Rise of Fan Engagement // The Impact Study: Fan Engagement and Revenue Engagement equals commercial success Hopscotch, a Californian sport mobile platform company, analyzed the

data from a Ticketcity.com study on the level of fan engagement on four Research shows that the companies that create a compelling major leages18 - MLB, NFL, NHL, and NBA - using a range of criteria from fan engagement experience, both on and off the pitch, drive average attendance of all games through to Facebook and Twitter activity greater loyalty, affiliation and, as a result, increased revenues.

to determine a fan engagement score. They compared the fan engagement

leaders for each league with each team’s revenue and valuation. What they This is indisputable evidence that sporting companies must found was that teams which ranked highest for fan engagement also came always be pushing the envelope of fan engagement to achieve in the top 3 of revenue and valuation every time. commercial success.

15 www.tokbox.com The Rise of Fan Engagement // The Impact The Future: Next Generation Of Broadcast & Content Creation Innovative media companies and sporting organizations are taking advantage of new trends around content consumption, creation and distribution.

16 www.tokbox.com The Rise of Fan Engagement // The Future User generated content Brands are moving beyond the concept of being con- tent creators to becoming content enablers - bringing their fans, followers and audience into discussions. Whether on YouTube, Twitter, Snapchat, Periscope, Meerkat, Instagram or Facebook fans and consum- ers are publishing and sharing their thoughts, photos and videos online at an astonishing rate.

The Pew Research Internet Project found that 54% of adult internet users now post original photos or videos online, up by nearly half from last year19. User generated content drives brand engagement, consideration and sales conversions. That said, brands should continue to produce professional content. In fact, according to comScore, brand engagement rises by 28% when consumers are exposed to both types of content20.

The rise of live video Video is fast becoming the dominant format of online content with consumption exploding in recent The big decision we made was to shift a lot of our years. Cisco predicts that online video will go from video efforts to focus on Live, because it is this 64 percent of all Internet traffic in 2014 to surpass emerging new format; not the kind of videos that 80 percent by 2019, with on-demand video traffic have been online for the past five or ten years22 doubling by 201921. Alongside the growth of online video consumption is live video. Snapchat, Periscope, Mark Zuckerberg Meerkat and Facebook Live have exploded as a form Facebook of content as consumers, fans and brands now have the tools to become broadcasters themselves.

17 www.tokbox.com The Rise of Fan Engagement // The Future Interactive broadcast The next era in broadcasting combines professionally produced and user generated content in the form of live video to bring interactive broadcast; where viewers collaboratively consume, interact and participate directly in the broadcast. Still coming to grips with on-demand and mobile viewing, this new model of broadcasting is being pioneered by traditional broadcasters and sports companies that must find a way to provide immersive and engaging viewer experiences.

While the attraction of live video is its ephemeral nature, by leveraging powerful new technologies, sports and media companies can both incorporate live fan participation and record these moments for continued distribution.

Recording capabilities allow sports and media companies to build rich libraries of fan generated content, giving them the power to broadcast online, on mobile and on-demand at a fraction of the cost of television, as well as leveraging the free distribution that comes with its fans’ vast social networks.

18 www.tokbox.com The Rise of Fan Engagement // The Future The Enabling Technology While fast broadband speeds and powerful cameras are key ingredients for fan participation in the new era of broadcast, a quiet technological revolution has been underway and, for the first time, is enabling media companies to deliver powerful, reliable, affordable and scalable fan engagement experiences.

19 www.tokbox.com The Rise of Fan Engagement // The Enabling Technology What is WebRTC?

WebRTC is a standard for enabling Real-Time Communications (RTC) - voice, video, and messaging - within a digital environment. It includes the fundamental building blocks for high-quality communications such as network, audio, and video components used in voice and video chat applications.

WebRTC takes the functionality that was previously functionality, as well as the reliability and quality offered by a telco, cable provider or broadcaster to power multi-party live video at scale, WebRTC – with the packaging and economics they is one technology that media organizations and determined – and puts it in the browser or mobile sports companies are using to bring the new wave application, for free, for any developer to use. With of interactive live broadcast to fans. no downloads or plugins, recording and playback

20 www.tokbox.com The Rise of Fan Engagement // The Enabling Technology Interactive Live Broadcast Solutions

TokBox’s Interactive Broadcast Solution is the first platform to enable true multi-party participation and genuine flexibility for broadcasters, ranging from a two party video chat broadcast through to enabling viewers to join in and become part of the show, and anything in between.

TokBox unlocks the power of WebRTC, packaging into any website with minimal development work it in a solution designed specifically to meet the and customizable UI. An intuitive dashboard gives needs of media and sports companies including an event producer complete behind-the-scenes scale, quality and customizability. Fans don’t need to control. Producers can even create high-quality, TV- install a plugin or visit third party websites - TokBox’s ready content with built-in recording capabilities so Interactive Broadcast Solution embeds seamlessly content can be captured and shared across the web.

21 www.tokbox.com The Rise of Fan Engagement // The Enabling Technology Use Cases: Live Video Examples The rise of live streaming apps, such as Periscope and Meerkat, has made serious waves in the sports world. Used by fans to share games live with their friends and by brands to stream exclusive footage to their audiences, applications like these enable real- time streaming to large audiences.

22 www.tokbox.com The Rise of Fan Engagement // Use Cases Live Streaming Apps

Periscope was used by HBO to live-stream backstage footage providing fans with exclusive online content23 in Twitter boxing’s “fight of the century” between Floyd Mayweather The NFL has partnered with Twitter to broadcast live games via the social and Manny Pacquiao. At the same time, as many as network29 allowing the NFL to gain access to its huge online audience. 24 10,000 viewers tuned in to a spectator’s live Periscope The partnership includes in-game highlights and pre-game Periscope broadcast of the fight. This represents a potentially broadcasts from players and teams. Like live streaming apps, but with enormous loss in pay-per-view revenues for HBO, the broadcast quality, NFL and Twitter are enabling fans to directly comment broadcaster. However, instead of viewing this new and engage with the broadcast itself. However, that’s where the medium as a threat, many organizations are embracing engagement starts and ends. live streaming apps to produce raw inexpensive footage to engage their fans in unique ways.

For example:

The Royals and Mets have broadcasted batting practice via Periscope25 Roger Federer gave a walking tour of Wimbledon via Periscope26 More than 100,000 people watched Sky’s cricket commentator and former player Michael Atherton’s exclusive interview with Freddie Flintoff and Kumar Sangakkara at the T20 World Cup after it was streamed on Facebook Live27 The NFL has partnered with Snapchat to bring curated “live stories” of NFL events through a mix of fan-submitted Snaps and official inside-access content28

23 www.tokbox.com The Rise of Fan Engagement // Use Cases Use Cases: Interactive Broadcast While the use of live broadcasting apps offers fans rich and exclusive video content, engagement is limited to emoji and text based responses during broadcasts. The opportunity for true fan engagement comes when broadcasters empower fans to become directly part of the show, and two-way interactive video now makes this a reality.

24 www.tokbox.com The Rise of Fan Engagement // Use Cases Fox Sports Huddle Model: Interactive Broadcast

Fox Sports Huddle is a weekly live interactive college football chat show College Football is one of the most popular sports in America and through a sponsored by Edward Jones and broadcast on www.foxsports.com - one of the participatory model of broadcast, Fox Sports Huddle brings fans even closer to biggest sports websites in the world. The program is built with fan participation the action, taking sports coverage from a simple one way stream or text chat to a at its core bringing college football fans, players, managers and experts face to large scale, interactive and engaging experience where fans can truly be part of the face on Fox’s College Football Huddle chat room. It incorporates live feeds from show. Fox Sports experts and athletes can talk with their fans, not at ​them. the studio or the sports field together with real-time video streams from fans to create a video talk show that can be broadcast to an online audience of up to thousands of people, all without a download or plugin. Why TokBox Interactive Broadcast Solution

With such rich and engaging fan generated content being produced with each show, it was essential that Fox Sports capture these moments and empower fans to share across social networks. Built on TokBox’s Interactive Broadcast Solution, the Fox Sports Huddle events do not end with the live show. Shows will be rebroadcast and available to view on demand as high ­quality, TV­-ready content, using the built-in recording capabilities to distribute and share via various social media outlets using TokBox’s WebRTC powered Interactive Broadcast Solution.

Sports fans nowadays want to be involved at a much higher level. Leveraging TokBox’s Interactive Broadcast Solution, Fox Sports is giving fans a unique chance to be part of the action by creating direct interaction with our hosts and guests on a weekly basis. VP of Sales Integration Fox Sports Digital

25 www.tokbox.com The Rise of Fan Engagement // Use Cases New Rules: Best Practices For Interactive Broadcast In the new era of broadcast, sport and media companies must follow a few crucial rules so as not to be left behind.

26 www.tokbox.com The Rise of Fan Engagement // New Rules Let them shine Let them discuss Most Americans are now walking around need to consider interactivity but also When fans attend a sporting event, they with a broadcast-quality video camera sources of content, and how to integrate generally chat to the people around in their pocket, and not only are they that into the program. We have all seen them as well as Tweet their reactions armed, they are also ready to use it. news pundits pulling journalists and throughout the game. Most millenni- This new generation of broadcasters are commentators in via Skype into a live TV als, in fact most people, engage with more than happy to comment or join the experience. That very experience can be a second screen when watching TV. program, so program creators, whether made more seamless to the end-user. Broadcasters must do more to replicate the professional networks or sporting Imagine using a mobile application to these real life experiences and move companies must leverage fans’ desires to not only view but be able to join in and past passive viewing towards collabora- be part of the action. participate in a live TV experience. This tive and interactive. Just as on mobile, Currently, most conventional sports is just one example of a slew of support- Meerkat has moved beyond simple media consumption experiences are not ing features, like the ability to record emojis and chat reactions to include video built for interactivity, and this will need content, post-process content, that need reactions, as should professional content to change. In a mobile world we now to be taken into consideration. creators and broadcasters.

27 www.tokbox.com The Rise of Fan Engagement // New Rules Let them be mobile Let them have control Let them share Most interactive broadcasts are built While the richest forms of fan generated In the age of social media and shar- to several hundred viewers at best. In live video content are spontaneous and ing content en masse, it’s crucial for the new world, sporting fans will be organic, for professional media compa- media broadcasters to give fans the consuming online digital media not nies broadcasting to a huge audience, power to share content across their only across different devices but also it’s critically important to have checks social channels. Not only does this across a range of network conditions. and balances in place that ensure fans bring unprecedented brand endorse- Optimizing this experience for scale will participate in an appropriate man- ment, it also allows media companies while keeping it low-latency will be key. ner. This includes the ability to curate to build vast libraries of rich fan con- content or an online video ‘waiting tent that lives on and can be distrib- room’ where broadcasters can meet uted at little cost and watched well verify fans prior to the live show. after the live event.

Like just about every industry, sporting companies and broadcasters are undergoing constant digital disruption. As barriers fall around content production and distribution and viewing habits change, it isn’t just the TV networks who are now fighting for audience attention and engagement. The winners will figure out how to adapt to this interactive live-mobile-online-TV hybrid world and continue to drive new fan engagement and viewing models. It’s no longer enough to broadcast, the fan is part of the show.

28 www.tokbox.com The Rise of Fan Engagement // New Rules About TokBox

TokBox, a Telefonica company, enables companies to embed live communications directly into their web and mobile applications. The TokBox media suite includes the Interactive Broadcast Solution & API, offering brands and content creators a powerful new way to connect instantly with their followers.

The TokBox Interactive Broadcast Solution is an embeddable fan engagement application for producers who want to connect on- screen presenters with viewers through real-time video and voice communications. The shows are broadcast to large audiences and include high-quality recording for post-show content distribution. For a more customized experience, brands can utilize the TokBox Interactive Broadcast API to build a fully bespoke broadcasting experience.

TokBox is trusted by leading organizations including Fox Sports, Major League Baseball, Universal Music Group, Blab.im, Nom.com and Yogaia.

Benefits of using the TokBox Interactive Broadcast Solution

• Removes barriers between presenters and viewers. • Increases accessibility and reach. • Embeds easily into websites and apps with just two simples lines of code. • Records for post-event distribution. • Offers customizable UI.

29 www.tokbox.com The Rise of Fan Engagement // About TokBox References

1 Digital Video and the Connected Consumer, Accenture 2015 report: www.accenture. 17 Bloomberg: Live Sports No Longer TV’s Holy Grail in U.S. as Ratings Peak com/us-en/insight-digital-video-connected-consumer 18 blog.gohopscotch.com/business/fan-engagement-does-it-really-drive-revenue/ 2 www.accenture.com/us-en/insight-digital-video-connected-consumer 19 Pew Research Centre: www.pewinternet.org/2013/10/28/ 3 www.forbes.com/sites/jeffbercovici/2013/10/10/the-second-screen-phenomenon-is- photo-and-video-sharing-grow-online/ much-bigger-than-twitter-and-facebook/#5427b7712aaa 20 ComScore: www.comscore.com/Insights/Press-Releases/2012/3/comScore-Study- 4 www.wired.com/insights/2013/07/beyond-the-second-screen Finds-Professionally-Produced-Video-Content-And-User-Generated-Product-Videos- Exhibit-Strong-Synergy-in-Driving-Sales-Effectiveness 5 www.visioncritical.com/gate-revenue 21 marketingland.com/digital-video-become-important-tv-creative-best- 6 www.techrepublic.com/article/ practices-emerging-175471 & http://www.adweek.com/socialtimes/ super-bowl-50-smashes-data-records-with-10-1tb-flying-across-wifi the-future-of-content-marketing-is-online-video/626021

7 www.accenture.com/us-en/insight-digital-video-connected-consumer 22 www.buzzfeed.com/mathonan/why-facebook-and-mark-zuckerberg-went-all-in-on- live-video#.yxo1V48y6 8 www.cisco.com/c/en/us/solutions/collateral/service-provider/ visual-networking-index-vni/VNI_Hyperconnectivity_WP.html 23 www.cnbc.com/2015/05/04/mayweather-pacquiao-live-streaming-app-periscope- won-by-knockout.html 9 techcrunch.com/2015/08/03/sonys-new-phones-are-perfect-for-snapchat-yet-no-one- will-buy-them 24 www.espn.com.au/boxing/story/_/id/12822727/illegal-streaming-periscope-arises- concern-lost-pay-per-view-orders-floyd-mayweather-manny-pacquiao-fight 10 mashable.com/2015/08/12/periscope-10-million-accounts 25 twitter.com/mlbonfox/status/587036399649456128 11 techcrunch.com/2015/10/26/the-nfls-first-live-streamed-game-on-yahoo-attracted- over-15-million-viewers 26 www.geekwire.com/2015/sports-and-live-streaming-roger-federer-is-giving-a-tour- of-wimbledon-on-periscope/ 12 www.bloomberg.com/news/articles/2015-08-31/ live-sports-no-longer-tv-s-holy-grail-in-u-s-as-ratings-peak 27 www.thedrum.com/news/2016/04/11/ live-streaming-ticking-time-bomb-sports-broadcasters 13 Bloomberg: Live Sports No Longer TV’s Holy Grail in U.S. as Ratings Peak 28 fortune.com/2015/09/18/snapchat-nfl/ 14 Bloomberg: Live Sports No Longer TV’s Holy Grail in U.S. as Ratings Peak 29 www.bloomberg.com/news/articles/2016-04-05/ 15 Bloomberg: Live Sports No Longer TV’s Holy Grail in U.S. as Ratings Peak twitter-said-to-win-nfl-deal-for-thursday-night-streaming-rights

16 Bloomberg: Live Sports No Longer TV’s Holy Grail in U.S. as Ratings Peak

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