Consuming sport...
Since joining the sports industry, I've been lucky enough to be mentored and supported by the incredible Professor Heath McDonald. Now Dean of Economics, Finance and Marketing at Melbourne's RMIT, we've spent the last near 18-months working together on a range of big market research projects including market segmentation, fan development modelling, pricing studies, all the way through to presenting on stage to wide audiences about whether sports marketing really is that unique (spoiler alert - it's not).
All that aside, one of the most important parts of our friendship has been learning from him, particularly in him sharing his academic insights about the sports industry, notably that of sport consumer behaviour. I think for any sports practitioner, it's vital to consume academic research papers, particularly because it removes so much subjective-agenda pushing, revealing huge insight that can impact our day-to-day, but more importantly, our longer term strategies.
As we continue to question the changing nature of sport consumption (how many articles have you seen pertaining to declining attendance and viewership?), and look towards the horizon with regards to the differing and changing consumption habits and broadcast models for sport, it's vital that sports practitioners are constantly pondering and considering the realities of it all. Particularly around challenging the traditional view of what a 'real fan is' and what counts as 'loyal' behaviour.
Recently, as part of the Journal of Sport Management, Heath along with Dr Adam Karg and Civilai Leckie, put out a paper on sport consumer channel preferences. It's incredible and I believe everyone needs to read it. If you'd like a copy, connect with Heath, Adam or Civiali.
There was so much in this paper, some of it that feels like common sense, but some that elevates the very real challenge ahead, particularly in tackling the status quo of consumption and engagement strategies and thinking. Specifically, it sets out to answer four key questions:
What is the prevalence of media and event-dominant consumers in general fan bases and Season Ticket Holders?
Do social, demographic and behavioural factors differentiate the modes of spectator consumption in both general fans and Season Ticket Holders?
How do attitudes toward the Season Ticket product differ for media and event-dominant consumers?
Is Season Ticket Holder satisfaction derived in different ways for media and event-dominant consumers?
There's a lot to digest within it, but so much that gets the mind ticking. For the purpose of interest, I've summarised below some really important insights that I took away from it:
Live attendance brings with it many social opportunities, particularly the thrill of the crowd, and the bragging rights of having 'been there'. But broadcast options come with lower costs and can be undertaken in the comfort of home, entertainment venues, or via mobile devices with a greater range of content and easily customised viewer experiences.
Whilst many industries have adapted to substantial shifts in consumer demand from one delivery channel to another, sport organisations do not have this luxury.
For instance, while broadcast rights for sports have grown exponentially and emerged as the most pivotal revenue stream for most rights owners, teams and leagues also rely on high levels of attendance - both as a primary revenue stream in itself, as well as to make the broadcast product palatable to fans and broadcasters.
Given the need to maintain demand for live attendance and elevate the attractiveness of broadcast rights, those charged with managing professional sport must perform a difficult balancing act.
The emergence of new ways to consume (via commercial and technological development), and new segments of consumers extends to a rethink of sport consumer theory. Insights into how these differing consumers make decisions, and their experiences via different channels are therefore highly valuable to both getting people through the gate, but also tuning in.
Traditional model for sport consumption placed repeat and consistent attendance as the end point of the consumption spectrum, with media consumption only viewed as an antecedent stage.
The emergence of 'media dominant consumers' as a sizeable and highly committed group challenges such models and suggests further attention is needed to understand fandom and loyalty in the era of expanded broadcast options.
Having significant implications for sport organisations, there needs to be greater recognition of substitution effects and increasing consumer complexity in how decisions are made.
While sport leagues and teams have always faced competition from other sports, there appears important trade-offs and factors to be understood in how consumers consume within a sport.
Whilst managing the distribution across live and virtual offerings, sports organisations need to balance demand across these channels and develop products that provide satisfying experiences for both.
A greater understanding of the consumption mode, the defining characteristics of each type, and drivers of satisfaction with club products can aid the managerial decision making about the channel mix, development of products offered, and ultimately the sustainability of these sporting organisations.
Findings and Implications.
In posing the questions and then seeking out to answer them, the paper indicates that:
While some fans have a 'balanced' approach to channel use, many have a strong preference for either event or media consumption of sport.
Media-dominant fans outnumber event-dominant fans. And the presence of media-dominant consumers among Season Ticket Holders was showcased. Both groups are hence invaluable for teams, despite their very different consumption habits.
More than just acknowledging that fans sometimes decrease their engagement and live consumption, this makes for a strong claim to rethink fan development and engagement models to include pathways to deep engagement that run without live attendance.
While those with either a media or event-dominant consumption profile may still consume the same products (i.e. Season Ticket), their motives for purchase and satisfaction with those products are derived in many different ways.
The sizeable number of media-dominant fans, and the high avidity of those who prefer consumption via media channels, tell us that positioning it as an inferior substitute for live attendance (how it's traditionally been done) will not resonate well.
Such findings are critical for sports practitioners, particularly in regards to the design and delivery of products that lead to the attainment and retention of consumers who seek a high level of interaction with their supported team, but not necessarily via traditional consumption modes such as attendance.
Make sure you connect with the team, and if you do happen to read the paper, let me know your thoughts. These are the types of conversations we ought to be having regularly!