Author: Carsten Thode / Aphetor, Founder | Read time: 6 min
In 1999, David Bowie said this about the internet: I don’t even think we’ve seen the tip of the iceberg. I think the potential of what the internet is going to do to society, both good and bad, is unimaginable. I think we’re actually on the cusp of something exhilarating and terrifying … The actual context and state of content is going to be so different to anything that we can really envisage at the moment. Where the interplay between the user and the provider will be so “in sympatico”, it’s going to crush our ideas about what mediums are all about.
It turns out that David Bowie was actually describing Web3 and the moment he predicted 23 years ago has finally arrived.
The key to this revolution has been the advent of blockchain. Because blockchain has actually changed the state of content. Now, we can embed information into the content itself, which determines who owns it, who can consume it, how specific individuals are allowed to use it, how much it’s worth as well as providing the means to enact any transactions. With the content itself containing all the information, rules and contracts required, the creators and consumers of that content are able to transact directly with each other, removing the reliance on platforms like YouTube, Facebook, Spotify and Netflix to act as intermediaries. This will crush our ideas about what mediums are all about.
Now, with the rules of executability of transactions contained in a transparent, pre-determined and mutually beneficial way in the content itself, the user and provider of the content can truly be in sympatico with each other. For sport, it is certainly both exhilarating and terrifying as we try to get our heads around the full range of implications, as we try to pick a path between the opinions of Web3 maximalists and Web3 sceptics, as every positive case study (e.g. NBA Top Shot) is counterbalanced by a negative one (e.g. Man City x 3Key) and everyone in the world (except their owners) tries to figure out why anyone would pay hundreds of thousands of dollars for a .jpeg of a Bored Ape.
Still, you can guarantee that sport will be at the forefront of this revolution because, ultimately, this is about content and communities, and there is nothing on earth that does those two things better than sport. That’s why we can look to sport for some of the most interesting early case studies and start to pick out some patterns.
Blurring the lines between the physical and the digital
On the one hand, this isn’t anything new (after all, what is Zoom or Zwift if not the blurring of the lines between physical and digital), but Web3 gives it a whole new dimension: transportability. Web3 allows us to own digital goods in the same way we can own physical goods, making it possible to transport those assets between digital spaces. Imagine a pair of digital RTFKT/Nike trainers that your digital avatar could wear not only at your next Peloton workout but also at your next Zoom meeting, when controlling your team in FIFA or attending a Live V/R basketball game. This opens up a whole new set of opportunities in tickets, merch, collectibles, fantasy, gaming and, probably, a whole bunch of other categories we haven’t even thought of yet.
Fans as Participants
There is a whole new generation of fans out there who don’t want to lean back to simply consume content. They have been conditioned by the interactivity of gaming, the democracy of social media and the immediacy of mobile to expect to be able to be “players”. They want to participate, have skin in the game and have a say in the decisions that affect them and the community. Web3 provides the mechanisms (like tokens and NFTs that determine voting rights, etc.) that not only allow this to happen at scale but provide the right incentive structures to encourage it. The Fan Controlled Football League is a brilliant (if extreme) example of this, but even if Arsenal fans (like me) will never be able to choose the line-up for the North London Derby, there are plenty of other ways to enable and reward my active participation.
New Commercial Models
Web3 will finally allow sports rights holders to begin moving away from the exclusive media rights models that have dominated the sports commercial ecosystem for the last 60 years. It has already given rise to new commercial models in gaming, like Pay to Play, and opened up new revenue streams for traditional sports rightsholders (the Premier League is looking at around £500m in new revenue from NFTs). Most importantly, it will enable a whole range of efficient and effective D2C monetization models that go far beyond simple OTT streaming services.
Of course, we’re only at the very beginning of this journey and there will certainly be plenty of twists, turns, winners, losers and bumps along the way. But, one thing is for sure, this is the future of our industry and what we’ve seen so far of it is just the tip of the iceberg.
The column was first published in SPORTO Magazine No. 16 (March 2022).