How NFT Enhances the Fan Experience in Sport and Entertainment

How can Metaverse and web3 make fan engagement explode?

Introduction

It is the champion’s league final, Liverpool versus Real Madrid. The night is intense; both teams lock horns, eyes on the much-coveted trophy – the highest honor in club football. Fans are roaring, cheering their team on, and booing the opposition team and fans. Liverpool fans are in red with Sallah, Mane, Henderson, and other players’ shirts reddish on their necks like the red sea. Real Madrid fans adorned white – talk of a flock of pigeons donning the sky. But here, it is Benzema, Modric, Kroos, and other favorite stars’ shirts on the fans’ necks. This has been the tradition – the intense battle, emotions in minds, songs in mouths, and rhythm in the air. So, who will win this game? 

Here, it is America; the stadium is filled to the brim. Imagine more than 67,000 fans flocking in pairs, some in groups, to enjoy the NBA final. 67,000 is not just a number - that's more than half of the Estonian population.

Fans everywhere love nothing more than seeing their favorite team or artist play. For brands, this provides the perfect opportunity to tap into that captive audience and engage with fans in a way that drives sales. The general tradition of fans is to buy sports merchandise and wear or use them physically to identify with their teams. However, NFT disrupts this tradition; it allows fans to trade digital rights of teams’ merchandise and important moments captured during sport.

New-age fans are technology savvy and expect more about how brands engage with them. If brands aren’t meeting them on the platforms and technology arenas they love, an instant barrier appears, and the cost of acquiring the fans of tomorrow becomes expensive to justify. What's more, the rewards and incentives brands provide fans in return for engagement are hard to track, inefficient, and restricted to closed ecosystems – this is where NFT and Web3 come in.

Why NFT is needed in the sports and entertainment industry

NFT can be any digital asset, giving sport an angle to explore for more revenue generation and fan engagement. However, brands, sports leagues, and clubs reward customers in the old, outdated ways – it is difficult to determine if the investment has resulted in a paying customer or not.

Globally, brands are on track to invest $62.5b – equivalent to the National Institute of Health’s 2022 budget, into sports sponsorship while struggling to quantify a return on investment. However, driving sponsorship remains vital for brands.

Driving sponsorship is expected from numerous opportunities presented by Web3 and NFTs, including massive revenue and fan engagement. However, a limitation abounds as NFTs and web3 are still relatively new and immensely confusing for most of the population, making them difficult for brands to leverage. In short, there is massive opportunity coupled with mass confusion.

For instance, marketing any product to fans needs clarity on usability. Also, the product should drive fans' engagement to break the communication barriers so that brands won’t be treated as customers. So, solving this puzzle, how does NFT enhance fans' experience in sports and entertainment?

But how do NFTs and Web3 enhance the fans' experience?

NFT projects have the potential to engage with the sports fans of tomorrow in new and exciting ways. In the physical world, fans buy merchandise and get their favorite player’s autographs and others. But with NFTs, clubs have new exciting ways to engage brands through NFTs gifts, NFTs as rewards for season ticket holders, and others using sports memorabilia or other NFTs to bring supporters closer.  

NFTs leverage the ‘Network Effect’ by allowing fans to swap, buy & sell assets. For example, fans gather digital collectibles or player cards and swap or trade them on the sports marketplace. The rare cards may cost above a thousand dollars, providing more revenue for brands. Additionally, the holders can resell this collectible for a higher price, boosting brand engagement and revenue.

Drive FOMO with exclusive drops and MCB opportunities. The holders will benefit from different use cases of the drops, like a hospitality package for the 2022 Qatar world cup. Also, airdrops to P2E games and tickets for sports, and also bet opportunities for clubs will provide engagement and revenue for brands.

Use NFTs to unlock benefits across the digital and real world. For example, an NFT can give access to the Metaverse and a real-world stadium. NFTs use cases also include access to fantasy sports league applications, with each in-game asset representing a player that game players will collect to form a team. An example is Sorare, where game players create Fantasy Football lineups using NFT cards. You win a token that could be converted to money when players score. 

Create new revenue streams for brands, leagues, and rights-holders; continue to earn from the royalties of each trade. NFTs create additional revenue streams for brands, leagues, and right-holders by selling sports memorabilia, virtual sports, and digital twins of real live assets. Fans also generate revenue by reselling these NFTs to other collectors, while clubs and brands earn from the royalties of each trade.

Decision-making in sports. Fans holding rare NFTs of clubs could enjoy participation in clubs' decision-making like some season-ticket holders. Non-professional clubs in Japan adopted a token model where fans could vote on processes like the player of the week, uniform design, and pre-match meetings. For example, YSCC Yokohama sold $500 000 in tradable tokens in May.

Enhancing the fans' experience in sport and entertainment, what is needed?

The possibilities for brands and sports to increase revenue and drive engagements are numerous, but some problems persist. For example, unlike Facebook, YouTube, TikTok, and other social media platforms that average users could use, many are unfamiliar with web3, metaverse, and NFT marketplaces. Therefore, providing solutions to problems in sports and entertainment clubs.  

Provide brands, sporting leagues, and rights-holders with the right tools to execute these projects. Minimize coding and bespoke builds.

Make it easy for brands to create, mint, distribute, and track NFTs.

Make it easy for fans to collect, redeem and share NFTs.

Onboarding brands and fans into web3 simply and safely.

Conclusion

As web3 continues to grow, so do the business applications and the competitive landscape. At this point, a handful of well-established competitors provide brands and fans with the ability to utilize NFTs in real life and online.

There seems to be a bit of a stigma around NFT projects not delivering value lately, but as long as brands, sporting leagues, and rights-holders adopt a ‘fan first’ approach, they’ll avoid the pitfalls of the failed projects before them. The brands continually add value and enhance the fan experience that will pave the way for the widespread adoption of web3 and reap the rewards of being part of the first movers.