Tech Brew Ride Home - (Bonus) Sports Tech With Will Martin

Episode Date: January 18, 2020

As I said on Friday, we’re going to delve into Sports Tech in a meaningful way for the first time. This will cover the streaming wars from a new angle because, where is sports in all that? This will be esports, the streaming wars surrounding game streaming, the new betting economy, this will be wearables and actual sports tech products. My guest is Will Martin, who’s Sports Tech Newsletter is something you should subscribe to immediately if you like this space. Subscribe to the Sports Tech Live newsletter Sponsor: Tiny Capital Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to another weekend bonus episode of the Tech Meme Right Home. I'm Brian McCullough. As I said on Friday, we're going to delve today into sports tech in a meaningful way for the very first time.

Sports tech is basically, well, it's a lot of things. The streaming wars from a new angle, because where has sports been in all of that? This will be e-sports. This will be the streaming wars surrounding game streaming. The new betting economy. me, this will be wearables and actual sports tech products. My guest today is Will Martin, whose sports tech newsletter is something you should definitely subscribe to immediately. If you like this space, link to sign up for the newsletter in the show notes.

Will, thanks for coming on the show to talk sports tech. Actually, what I should do at the beginning, because this is one of those spaces that I don't know very well, and I like to do these weekend episodes to check in on and learn more about. You have a newsletter that I've subscribed to for the better part of a year now called SportsTech Live. Is there any quick and easy way for people to find that? Just Google around for it? Yeah, so it's part of the TechStars network.

So if you go to StartupDigest.com, you can find a bunch of different topics there. SportsTech is one of those because TechSarris has got a couple of sports accelerators now. So if you go to Startup Digest.com for it slash sports tech, you'll be able to see. subscribe to the newsletter. And I highly recommend doing that, especially because if you've got to interview somebody about this, it's very easy to just go back in the last few months and cherry-pick things to talk about. But it's actually a fascinating space because it sort of overlaps with a lot of things that we do talk about on this show. I'd like to start with the streaming wars, sort of Venn diagram overlap of it. I've asked other people on the,

weekend episodes, why thus far sports hasn't been a bigger part of the streaming wars so far? I assume that that's because, you know, there's these multi-year contracts that are already in place, so it's hard to break into, it's super expensive, etc., etc. What's your take on that why sports hasn't been a bear player yet? Yeah, and I think you're dead right with the multi-year contracts, especially in the U.S., the big leagues like NFL and NBA, they tend to do longer contracts. So five to seven years is kind of like a typical contract in streaming or rights in US sports. But if you look at kind of European kind of model,

it's kind of more of a three year kind of cycle is what they go through. So the Premier League is probably kind of on a par with the NFL in terms of overall contract size. So that's where Amazon have kind of creeped in the last 12 months. So we're starting to see the tech giants kind of coming in. And in three years time, we'll be talking about the NFL doing new contracts. And all signs point to the tech giants being involved there as well. So I think it's still bubbling in the sports sector, but I think it's definitely coming.

Let's talk about the Premier League streaming thing. The listeners of the show know that I'm a Premier League fan. And so I guess it was last month. Amazon did its first weeks of Premier League streaming. And there was a lot of talk about how – because, you know, illegal streams are huge in Europe, especially for soccer stuff. And so it was interesting for me, you know, just from the podcast I listened to, the subredits that I go to for my football news, to see how everyone was talking about the tech angle of it and, like, you know, the customization

and how you could look at different cameras and things like that. So tell me more about what Amazon did with their streaming there. Right. So actually, I'm based in Ireland. So Ireland was kind of excluded from the Amazon deal. But yeah, I've had friends in the UK and I got them to like kind of show me their screen as they were watching it. So essentially what Amazon kind of did was allow a lot more kind of user choice. So yeah, as you say, you can like choose which camera angle you want to use.

And, you know, sports has gone from like seven cameras in a stadium now to like 35. So there's a lot of options. A lot of camera angles might not show you much all the time. So if you are in that mode, you're probably swapping around. and camera one is probably like your bread and butter. But having that option really kind of gives a lot of control to the end user. People could also turn off the commentary. So you could just have the stadium noise, which is great as well.

And it kind of shows the potential for the future broadcasts, you know, like different languages, different podcasters, maybe. Right, I was going to say, you could even swap out commentators or the announcers, as we would say in the states here. Exactly. Yeah, yeah. So I think that that's huge potential. for the future to allow more customize. Because a lot of renouncers, they know a lot of stuff, but they're not everybody's cup of tea.

Oh, you know what's something that just occurred to me, speaking as a podcaster, they could set up some sort of a platform where it's like let my favorite podcaster do the commentary and then like, you know, some of the money could kit back to them and that sort of thing. Yeah, exactly. And there's a startup called Sportscaster. So they allow people to do that. and they've got some sort of little deals going on, particularly in kind of basketball, not the NBA or anything,

but basically allowing the podcaster or the wannabe sportscaster to watch a game and they give them all the graphic packages. So if you're watching the Vikings versus the 49ers at the weekend, they'll start your stream with the right logos and stuff and then allow the user to kind of broadcast and do the play-by-play. So I think that's got huge potential, especially for niche sports, as well as just people who really love a certain podcaster or star that can kind of do that kind of play-by-play in a kind of more informal way, which might suit a lot of users, especially kind of younger generations. Well, also, back to the for the viewers' end of it, there was the ability to customize all sorts of stats and things like that, maybe put opta stats along the side or whatever. So, like, there's, you know, that sort of, we'll talk later about, like, e-sports and, like, betting and things like that.

But there's, like, just an endless possibilities there in terms of, like, the actual game image might be a tiny part of your window because you're looking at all this other stuff. Exactly. And obviously, with the advent of A.R. and that kind of coming into the future, you know, you could just have it all just in one kind of field of view and just kind of rotating your head to see that. So, yeah, I think stats have, like, kind of really blown up in the world of sports. Obviously, I think the US sports were kind of ahead of this. And, you know, you've kind of seen it kind of coming into the Premier League and soccer around the world. But, yeah, on-demand stats is something huge, especially with kind of OTT platforms. And I guess Amazon have kind of learned a lot from what they're doing on the Twitch side.

If you look at their Thursday night football, they've got different kind of overlays that you can do. Still watching the video screen, but, you know, you can pull up those player stats, you know, player bios. You can find out how old Tom Brady is, who's his wife, that kind of stuff, if you're of that interest. So I think that kind of customization that the likes of Amazon and any of the OTT kind of platform providers will ultimately provide, definitely gives a lot more choice to the end user. And it's not a linear broadcast with one individual stream going into everybody. Everything is going to be customizable. So I was at the IBC conference in Amsterdam this past year.

So it's the International Broadcasters Conference. Absolutely huge. Everyone's there from the world of sports, entertainment, movies, you name it. But one of the coolest things I saw was that kind of, you know, the new form of broadcast. So not everything going out over one stream, but all the individual components. So the sound, the video, the data, all being sent as individual packets. And then it's kind of put together at the end user side. So then the end users got full control of what they see, what they hear, what they can kind of flick through in terms of stats. Well, and then from the production end of it, think of all the data.

And not only the broadcaster can learn, well, this is what people are really interested in, but the sports can learn that too. Like, well, this is really what people care about. And so, you know, there were some articles I think that you linked to that were questioning, well, how will this actually change the sports when the sports now have the data in terms of, you know what people love? People love the ballboy cam. or, you know what I mean? Or like they hate the weight for the VAR review or things like that. Yeah. So like this has the potential to change sports for the first time knows on a minute-to-minute

basis what people actually care about. Exactly. And it's kind of the first time we're seeing that kind of level of interactivity that people aren't just like sitting back on their couch and not touching a button. Obviously, with the advent of OTT and IPTV, the user now is a chance to start inputting to what they see here and consume. So that all data is going back to the broadcasters. I'd like to know how the deals are structured.

Did the Premier League get access to all the data that Amazon's collecting? That would be very interesting to know. And ultimately, the teams get to know as well. Because you're an Arsenal fan. I'm a Spurs fan. Does that information travel back to the teams themselves? Isn't it – because it's so powerful and because what people care about is the sport,

isn't it inevitable that eventually, like, the NBA will just have its own subscription offering and they won't go, I mean, they'll have to go through the platforms in a sense. And in theory, like, people will always be willing to pay up. But, I mean, why, isn't it inevitable at some point that I'll just subscribe to the NBA, I'll just subscribe to the Premier League, I'll just subscribe to the NFL, like, why do they need to continue to do these deals? Yeah, I guess the traditional way of doing things is the biggest market, you know, everybody's got a house or TV in their house.

So that's where they ultimately, where the reach is going to be. And obviously the big traditional broadcasters have a lot invested into the world of sports. Obviously, the streaming wars also kind of leans on their content. So the TV shows that they're producing and putting out. But live sports, it's live, you know, it's appointment viewing. So the advertisers actually get their ads viewed and not kind of skipped over. So ultimately I think there's going to be a battle between the two. I think ultimately every league and team would probably want their own subscription service,

especially the big teams. Because when Manchester United were bought by the Glazers back in 2005, that was the big kind of speculation at the time is that they're buying this. So that when the rights are put back on the individual team, that they can go all around the world to their 800 million or so estimated fans and try and monetize those individually as opposed to being part of a package deal inside the Premier League

and just getting a cut so being able to ultimately own their own content all around the world. So it's going to be a slow process. I don't think the TV players are going to give up easily. I think there's a quote from some executives from, I don't know, is it ABS or CBS,

but they'll do anything to get the NFL back once the new rights are coming up. Yeah, that was my next question because now you have all of these, Now you have the streaming wars going on, so all of these people with deep pockets that are incentivized to try to build out their platforms. But at the same time, if you're CBS and you're afraid to lose SEC football or something, because if you lose it potentially, like it's been said a thousand times, that live sports are the only thing that traditional TV has left. It's appointment viewing. So are we potentially in this next round in negotiations going to see like just stratospheric?

bidding wars. Yeah, I guess that was always kind of the rumor that that was going to happen. But we haven't really seen any action from Facebook kind of coming in, bidding for rights. They've done pretty strategic deals. So they're like one of the main providers of La Liga in India. So it's not a market that they've spent a lot of money on. India's got 1.3 billion people, but it's not really a football nation. And it's probably harder to monetize than the U.S. or Europe.

So they haven't really spent a lot of cash. And obviously, they've got a lot of cash to burn, but they've been kind of slow on their approach. And I think maybe the strategy is just to try and weight out the kind of more traditional broadcasters and try and scoop up different offerings as and when they come. But I think the next NFL kind of writes, that's where we're going to see a lot of action. I don't know if it's going to be a complete bidding war, but I think definitely there will be some slicing and dicing of the different

offerings and more and more going towards the tech chains. Let's switch over to esports. Sure. This is an unfair sort of big question to lead off of it, but just in a broad way, I'm curious about the e-sports market, like where it is in its sort of evolution. Like, are we at the point where the big major companies are coming in with lots of money? Are there big major startups, like unicorns in the esports space? Like, in the broadest possible way, like, what's the state of the market right now?

Yeah, obviously, it's caught a lot of fire in the last kind of two to three years, especially in the last 12 months. It's been constantly things that we're reporting on because there's big news pretty much every day and every week. But the market is still relatively small compared to, like, the overall gaming market and the overall sports market. So there's some kind of reporting for what the revenues work. in 2019 and it's, you know, a billion plus, but it's not much more than that. So in terms of unicorn companies, like, companies don't really have a valuation of a billion dollars yet in East sports space, because it is, it is quite narrow and niche inside the gaming market.

Okay, let me ask, let me ask this in a different way. Is it, are there leagues developing? I'm sure there are, the answer is yes, I know this, but is it, is it bigger on the end of, like, well, okay, there's an Overwatch League, or is it also that these individual teams are developing into companies themselves? Yeah, absolutely. It's a bit of both.

So it's just very analogous to the world of sports, where the NFL is a huge entity, but also the New York Giants, the 49ers, the Vikings, the Dallas Cowboys, they're all huge organizations in their own rate as well. So you're kind of seeing both kind of play out. And obviously, the big gaming companies

have a big part to play as well, because of ultimately they're the owners of the intellectual property of whatever game we're talking about. So they're huge players as well, and they've got very deep pockets to kind of push out there. So, like, if I'm EA and I'm organizing all of these FIFA tournaments, I'm assuming, you know, there's got to be a kickback to FIFA there. So maybe let's go back to Overwatch or whatever. So then, like, if teams compete in my tournaments, I'm making money there, making money off the viewers. Is there also, like, I don't know, like what, so I guess if this is a whole new arena

where if your game becomes so popular that there's millions of people around the world playing competitively, like, that could become the bigger market than even, like, selling the game or in-game stuff, right? Right, yeah, because when you look at, you know, different kind of games, like Overwatch, League of Legends, Caller Duty, they're actually going down the franchise model. So there's been kind of bidding wars between a lot of big companies and a lot of sports investors to get one of those franchises. So, you know, the average franchise price depends on which game you're talking about. But if you're talking about like League of Legends, it's $50 to $80 million per team per franchise.

College Judy just started franchising there. So they're looking at like $30 to $40 million there as well. So that's just for one team in a game that. that's a huge number of individual copies of the game being sold. It's like 60 bucks to buy a version of Caller Judy. That's a lot of individual sales. So it definitely adds to the lifetime value of the overall franchise, of the actual game, not the individual franchise teams.

So, yeah, the sky's the limit, really, in terms of how they try to monetize an individual game. So if I, if Overwatch or whatever does a tournament, then do they, do that through the platforms like Twitch or Facebook or YouTube or can they are they doing that on their own? I'm curious like then is there a bottleneck where then you have the platforms of Twitch, Facebook and YouTube also as like gatekeepers. Yeah. And that's why you know, we've kind of seen the streamer wars as well with all those companies that you mentioned. But typically, obviously, the Twitch is the biggest player in the market. You know, they got about 73-ish percent of the the live streaming market in the world of gaming and e-sports.

So typically they're one of the main kind of partners involved in any of the big kind of tournaments. But there was some kind of insights that kind of came out of one of the League of Legends tournaments, you know, one of the World Cup's, one of the big tournaments last year, that YouTube was actually the bigger provider of the viewing numbers, that it was more stable, higher quality. So that's a really interesting that they kind of live stream on multiple platforms, ultimately to get the biggest audience share possible. So, you know, we're talking about the streamer wars. You know, we're talking about Twitch, Mixer, and YouTube, but it's basically a proxy war for Google versus Microsoft versus Amazon. So a lot of interesting things to talk about there as well.

Well, and then it's, I actually haven't been reporting on this a lot, but like every day there's another streamer that, is like, I'm jumping ship over to this platform or whatever, and they're, you know, the platforms are offering bonuses. But also, I found it interesting, you or somebody was writing about how, like, the platforms can offer this talent, like, these influencers, listen, come over to our thing, we'll write you a check. But also, we have Instagram over here, and we'll help you build out your entire, you know, personality and your overall influencer business.

So it's helping the actual talent evolve beyond just, you know, playing a game 12 plus hours a day online. Exactly. And obviously, like a lot of the big moves from the streamer perspective was, okay, let's lock down a 20, 30, 50 million contract for three years. That's a lot of money for guys that are, you know, kind of mid-20s. It's kind of the average of the people that have been signed for Mixer or, you know, YouTube or Facebook gaming.

But obviously, you know, with the Lexer, it's a pretty new platform. So Shroud and Ninja were two big names that went to Mixer. And two of the things that they were kind of saying that, you know, allowed them to feel comfortable moving to Mixer when their market share is like 3% compared to Twitch's 73%. Is that allowed them the ability to have more time to focus on other parts of their business that they're looking to move beyond just being a live streamer, looking to become more of a brand, produce more content, more evergreen

content, but also the ability to influence the platform. Obviously with Amazon being such a behemoth, it's kind of hard for them to have influence over how the platform evolves and how they handle live chat or new features that they're adding to the platform every time. So I think it's kind of twofold for the people that are moving on top of the money, the money comes kind of there. They don't really talk about that, but it's obviously one of the main motivations. Right. Money is always, the cash is always king. Yeah. Absolutely. And, you know, these guys still have pretty intense fan bases, a lot of them

would have followed them over. But, you know, these are only kind of exclusive deals for two to three years. We don't know the full kind of terms and conditions, but, you know, there's nothing to say in three years time that when the contracts expires, that they can't just go back to Twitch and go about their regular business there, but they would have pocketed a lot of money and potentially moved themselves on a lot further in terms of building themselves as a brand. Because when you look at Ninja,

he's not the world's best Fortnite player. He didn't win the World Cup. He's never really been a top e-sports kind of player, but he's built the biggest brand. He's got his own shoe coming out with Adidas, and if you said that two or three years ago, people would just be like, no, that's not going to happen.

It's going to be, you know, Big basketball stars or hip-hop stars are going to have shoe deals with the likes of Adidas, and now it's esports stars. So let's talk about that because we're recording the day after I got back from CES. And as I said on yesterday's show, the thing that I had forgotten because I hadn't been there in 10 years is how everybody's there. You know, like companies you would know, what are you doing at CES or whatever? So, you know, I did the story about like the gamer socks and things like that. But the idea that, like, you would have not only streamers with their own branded shoes and things like that, but the fact that, like, sports tech and shoe tech and wearable tech and all this stuff, like, it's all, it's all tech now.

Like, was there, what are some of the things just off the top of your head? I know you were covering CS this week, too, that you saw that was sort of turned your head a bit. Yeah, I guess just to follow on for your point, you know, like software is eating the world and, you know, sports has been one of the slower adopters, I guess. You know, it's kind of been a kind of monopoly, you know, NFL owns the NFL and they kind of do things on their own terms. But we're kind of seeing that kind of completely change. So, yeah, there was a lot of kind of Peloton competitors, not strictly bikes, but, you know, doing connected rowing machines and treadmill. Smart mirror everything. Smart mirror everything.

Yeah, yeah. And what Peloton have done incredibly well is obviously selling a premium product, but also building a whole ecosystem that is not just a standalone piece of hardware. You know, the live classes, the on-demand classes have really kind of boosted their uptake and keeping people honest and actually using the expensive piece of equipment that they've used. And I guess that's where the smart mirrors kind of come in as well. You know, obviously you can display a lot of data, you know, like your heart rate, if you've got your fitness tracker connected to it, to keep you in that kind of fat burning kind of zone or whatever.

But it also kind of delivers the potential for live streaming classes because, you know, that's been a huge breadwinner for Peloton and that kind of recurring subscription kind of revenue is something that every company in the world is kind of looking for right now. And specifically in the world of sports and fitness, it's hugely important because if you're just selling people to a piece of equipment, you know, that's a one-off lifetime value there and done. But if you can get people subscribe and keep people coming back, that's where the huge kind of valuations are coming from.

And that's why Peloton is now public and it's trading at about $8 billion market cap. Hence, all the copycats for different kind of niches inside fitness to see if people can kind of piggyback on that idea of smart hardware, connected with the different hardware wearables, but also delivering live streaming content. Yeah, actually, final question, sort of in that vein of, you know, the phrase I always use is what tech really means these days

is it's impossible not to know anything. So with all of the data that's available, I'm talking about high-level athletes now, professional athletes, If I'm an Olympic level swimmer at this point or marathon runner or whatever, my training regimen is all now that, you know, you know the oxygenation of my blood on mile 13 and like how many, you know, your shoes are smart enough to tell you that your stride is off or something like that. Like if I'm, are we reaching the cyborg level where the high end athlete is essentially has so much data, so much tech involved in their. training routines that it is, we're reaching cyborg level now. Yeah, like everyone's wearing a wearable, so it's not embedded in the athletes yet,

but it's, you know, as soon as they show up for training, you know, in the world of soccer or NFL, you know, the GPS trackers are attached to the player from minute one till when they finish. You know, there's even sleeping tech. And there was a couple of stories that are reported there about, you know, how do people rest and recover? Because it's all encompassing now in the world of professional sports. It's not just every minute that you're awake. It's every minute now that you're asleep has been monitored and optimized for better recovery, better stamina, better performance. So it really is the cyborgation of athletes. Well, listen, that's a good segue for me. Arson Venger has always been credited in bringing simple diet to professional sports

in Britain, the idea that you wouldn't go to the pub afterwards and have a burger and a pint or whatever, just eating well. So you're a Spurs fan. I'm an Arsenal fan. We have both gotten new managers this season. How are you feeling with things right now? Yeah, there was an initial kind of optimism that's kind of dissipated. We're playing Liverpool this weekend as well, which could be quite embarrassing. You know what? Just be. beat them so that our undefeated season can still remain in the books. I didn't even think about that. Obviously, you want to beat Liverpool to, you know, obviously for Spurs to win,

but also to try and make the league a bit more interesting because it looks like they're just going to win at a counter, really. But I didn't think that us winning could help Arsenal. So I might have to reevaluate who I'm ultimately rooting for. When you first heard the Marino news, be honest with me. What was your reaction? Yeah, no, I was pretty shocked because, you know, obviously going back over the last kind of 15 years of Daniel Levy and E&C, the current owner Zatatatatnam, they've been kind of manager chip chop, kind of heavy. But I thought Pachitino would get to the end of the season.

but, you know, it really was, you know, like, kind of 12, 18 months of kind of average performances. Obviously, we got to the Champions League final, which I think kind of papered over a lot of the cracks. But I was kind of impressed by how swiftly that they kind of moved. Obviously, they'd made the decision. And then, you know, like 24 hours later, Jose Muño was in. So I think that really kind of impressed me just in terms of some actual kind of foreplanning. Because, you know, you saw the likes of Everton and Arsenal. They kind of changed managers.

but then the interim manager for, you know, three or four games got some results, but ultimately it didn't kind of work out for those interim managers. So I guess ultimately it will kind of come down to how Jose Rino can adopt to, you know, the new world of football were in a completely different decade. And, you know, he was super successful in the past, but, you know, at his time of Mani nighted, people were saying he's kind of a bit stale, that the old ways of doing things aren't going to work. So he brought in a kind of a young up-and-coming place.

our coach from Leal. So I think his influence over the squad might be just as important as Josie Marino's. Well, once again, Spurs helping Arsenal out. I'm just, I was afraid that Marino was going to come to Arsenal. So thanks for taking the bullet for that one. But, hey, I don't, I don't hate Spurs. Good luck on the rest of the season. Yeah, you too for the Arsenal.

And thanks for coming on the show. Yeah, thanks for having me.