As blockchain technology evolves, it’s proving to be an effective tool across many diverse industries, and one rather surprising area in which it’s gaining traction fast is in sports. Many clubs and teams at the highest levels are implementing blockchain-based solutions and customising blockchain use cases in sports to help drive engagement and monetise their fan base. At a time when revenues from ticket sales have been hit hard by the COVID-19 pandemic, embracing this type of innovation is increasingly vital for clubs’ survival.
Sports clubs and associations are constantly seeking new ways of generating revenue in a competitive industry. With the rise of online events and the evolving habits of fans, it’s an ongoing challenge to provide enticing gameday experiences to boost attendance. Moreover, with disruptions such as the rapid growth of Esports and most sporting events currently being held spectator-free, clubs need to diversify their activities and rethink how they interact with their supporters to encourage engagement, increase membership, build loyalty, and reach more international fans. Blockchain solutions in the sports industry are enabling all this and more…
Blockchain Use Cases in Sports Showing Real Results
Blockchain applications for the sports industry are opening up new innovations and revenue streams in many different ways, from fan tokens and digital collectibles, to fan loyalty and engagement platforms. Outside of traditional physical games, this allows clubs to offer an extension of their brand online and meet the needs of a younger ‘digital-native’ fanbase, thereby growing their fanbase and securing their long-term future. Let’s take a look at the top five blockchain use cases in sports and Esports below.
1. Fan Tokens
The popularity of fan tokens stems from their ability to create additional revenue streams for teams as well as dramatically increase engagement. Tokens can be bought by fans via FIAT currencies such as dollars, pounds, and euros, and be exchanged for merchandise, collectibles or exclusive interactions, like a VIP “meet the player” experience.
More and more Premier League football clubs from Manchester City to FC Barcelona are successfully using fan tokens to raise revenues and interact with their supporters. FC Barcelona’s $1.3 million first round of fan tokens, for example, sold out in less than two hours. By using blockchain technology in sports to issue their own virtual currencies, fans can interact with the club, the players, earn points, get discounts, and participate in a virtual ecosystem.
Tokens also give fans a sense of involvement in the club’s decision making through voting rights — on initiatives such as the goal celebration song or the colour of the training kit. Fan tokens can also help clubs overcome the challenges of distance when communicating with fans. FC Barcelona has an estimated 450 million fans throughout the world that are now within their reach thanks to blockchain technology. In this way, blockchain technology in sports is helping clubs to engage and grow international fanbases.
2. Digital Trading Cards and Collectibles (Powered by NFT Technology)
Digital collectibles (sometimes called crypto collectibles), powered by Non-Fungible tokens (NFTs) unlike regular digital collectibles, are usually individually unique (or provably rare) and limited in quantity. This means that “limited edition” collectibles can be created with NFTs and their uniqueness can be verified by immutable blockchain technology. This makes them the perfect tool for clubs and teams to use to design digital trading cards, in-game assets (for Esports and gaming industry) and game memorabilia that fans can buy and trade.
The first time that NFTs really caught the eye of many gamers and sporting associations was in late 2017 when a game called CryptoKitties became so popular that it clogged the Ethereum blockchain. With each of the unique collectible digital felines commanding different prices, at the height of its popularity, the most expensive one sold for an eye-watering $170K.
The possibilities for these blockchain applications for the sports industry are endless. Just imagine fans being able purchase limited-edition player cards or earn incentives for collecting all team players. Digital collectibles are already proving to be highly popular among the Major Baseball League in the US, where fans around the world can purchase All-Star cards at varying prices. Not only does this serve to generate additional income but it caters to a younger generation of sports fans.
3. Fan Loyalty and Engagement Platforms
Other blockchain use cases in sports include fan loyalty and engagement platforms that help teams foster a sense of community and belonging among their fans. Through these blockchain-based platforms, fans can be rewarded for taking certain actions, such as interacting with clubs’ sites, creating, sharing and liking content, or through loyalty programmes that allow them to accumulate rewards or points to spend on merchandising, tickets, or digital collectibles.
This isn’t only a great way of engaging with fans and building an exclusive community; fan loyalty and engagement platforms can also help clubs enhance their relationships with sponsors. Blockchain’s transparent nature and immutability acts as an assurance of the integrity of the metrics and insights gathered from fan interactions, and helps sponsors generate a better ROI.
4. Blockchain-Based Ticketing Systems
Blockchain technology in sports is also being applied at the ticketing level as an easier and more secure way of purchasing, storing, or even transferring tickets between owners or events. Thanks to its decentralized nature removing the need for intermediaries and central actors (as well as insecure centralized systems), fans who find themselves unable to attend an event, for example, can simply switch their ticket without paying penalty fees or losing their money, making for a much more efficient user experience.
As the data on the blockchain is immutable, no one can falsely claim to have bought a ticket or dispute a price. Blockchain-based ticketing systems ensure that the possibility of counterfeit tickets is eliminated as they can be instantly validated by blockchain technology. Moreover, in the event of sporting fixtures being postponed or delayed, the entire process of rescheduling is simpler for organisers and end users alike.
5. Decentralized Esports Ecosystems
Beyond the traditional sporting arena, blockchain is also gaining ground in the fast-growing Esports world. A sector increasingly popular with the younger generation, a report by Newzoo predicts that, by 2021, Esports will see an annual growth rate of around 14% with the number of casual viewers and Esports enthusiasts rising to 557 million. And since Esports involves multiple stakeholders, from game developers to players, sponsors, advertisers, team managers, and media, blockchain can provide a robust single platform (or ecosystem) to bring them all together.
Its decentralized nature allows industry stakeholders to connect in a peer-to-peer way removing complexities and intermediaries, and allowing for the easy distribution of prize money, transfer of players, media rights, and more, through programmable smart contracts (a contract that is executed autonomously based on pre-set conditions). Blockchain can also increase trust in Esports thanks to its transparent nature that allows all participants to see what’s happening in the network. Smart contracts between organisers of tournaments and developers also remove the risk of game developers not being paid or concerns over unfair distribution of prize money.
The Takeaway
With its flexible nature and ability to be applied to almost any use case, blockchain technology is increasingly helping the physical and digital sports sectors to meet their challenges head-on by monetising their fan bases, increasing engagement, and building loyalty, trust, and efficiency.
Sports teams are turning to blockchain solution providers to help implement custom blockchain solutions for them to ensure their long-term survival. As the football industry, the NBA, and Esports are all demonstrating, these innovations are helping unlock profitable new revenue streams, increase fan engagement, improve ROI for sponsors, and allow teams to remain competitive.
Protokol’s Blockchain Solutions
Protokol delivers fully customizable blockchain solutions for sports that easily integrate with existing systems and infrastructure. Created with highly adaptable blockchain technology, our fan engagement solutions are tailored to you; delivering on the unique goals of your team or organisation.
Alongside the creation of a secure blockchain, tailored specifically for your team, our NFT (Non-Fungible Token) technology enables the creation of provably unique or rare tokens that can’t be destroyed, replicated or forged. These NFTs can be utilized for everything from enhanced fan tokens to unique digital collectibles such as trading cards. What’s more, as NFTs are tracked on the blockchain, they provide an immutable history of the assets, enabling you to track ownership and usage of each token.
Additionally, with our custom fan loyalty solutions, your club can boost the customer experience for fans while encouraging brand-building and revenue-generating behaviours through a secure and scalable loyalty solution that enables a frictionless ecosystem of loyalty partners.
In this way, Protokol provides flexible fan engagement solutions that can be customised to deliver on your team’s business goals. Whether that means increasing engagement with sponsors through fan tokens (and providing immutable engagement data and insights to sponsors), generating revenues through the creation of provably-unique collectibles, or encouraging fan loyalty with a fast and secure reward system.
Learn more about Protokol’s blockchain solutions for the sports industry to discover how blockchain use cases for sports can be brought to life with innovative solutions. Or book a free video consultation with our blockchain experts to explore what the use case could look like for your team or organisation.