Today’s guest columnist is Miheer Walavalkar, co-founder and CEO of LiveLike.
As the global industry bundles for life in “crypto future, “what we need to do to create a viable crypto spring season that leverages everything we have learned since the market around non-fungible tokens and Web3 first heat?
NFTs it was initially heralded for its ability to provide digital deprivation, but can it be used for more than that? Given the recent gloomy news cycle for cryptocurrencies, the answer may be surprising: For those who know the right formula, the opportunities are endless.
Looking to the next phase of the Web3 and its place in our digital economy, maintaining a focus on interactivity and utility is important—and sports fandom explains why. Today, most are digital collection in sports to the highest bidder and do little to persuade higher engagement rates or fan retention. But what if it was used as a gift for fans who are actually involved in sports events, teams, athletes and brands?
Now we’ve seen what we can’t do. Take, for example, the case of FTX, a planned crypto exchange buy a jersey patch in MLB uniforms, then resigned due to current market conditions. Top Shot, one of the original sources of excitement around the digital collection, saw a 68% drop in sales every year from April 2021 to 2022. Liverpool enters the NFT game with the launch of the LFC Heroes collection at Polygon. Despite the initial excitement of the launch, Liverpool sell only 5% of their token inventory, disappointed disposal and investors.
A deeper dive into why this initiative is struggling explains the importance of building better experiences to solve bigger problems. Teams and leagues making the initial push into Web3 don’t have to worry about missed goals or misplaced expectations; instead, now is the time to focus on creating deeper experiences and communities.
There is a lot of evidence for the potential of digital communities in sports. A number of forward-thinking organizations have embraced involvement, such as NASCAR, the Golden State Warriors and NCAA March Madness, to name a few. The core of our mission at LiveLike has been to continuously develop technology that empowers groups like this to bring interactivity and community to fans, encouraging engaged customers who are rewarded for their loyalty.
The sports business as a whole, however, is missing an opportunity. They can learn a lot from industries like airlines, hotels and retail brands that have proven to be the best at building loyalty and capitalizing on communities. But instead of seizing the opportunity to revolutionize fandom, sports organizations rarely go beyond season ticket sales to encourage loyalty.
What’s more, until recently, sports properties often surrendered control of their fan communities to third-party platforms. Most communities are fan-made—from Facebook groups and subreddits to Discord servers. Web3 should be based on a membership analogous to airline miles and hotel points, but with the added layer of transferability.
So what should sports brands do to seize the Web3 opportunity? Look at the Green Bay Packers or any club in the Bundesliga that has common ownership. While these are very analogous concepts, the common point is the same: a sense of ownership empowers fandom. Web3 offers the ability to extend the fan experience beyond the standard and the opportunity for clubs to bring this concept to the digital space.
Companies like Socios do this very well and partner with the most advanced clubs, using sports opportunities to engage directly with fans. Integrating Web3 into a fan engagement strategy allows teams to develop loyalty on the platform and incentivize fans to join their IP.
The industry needs to take back ownership of the community, and Web3 allows that to happen. Technology trends tend to reverse, providing lessons for those who want to look back and learn. Web2 platforms like Reddit and Facebook have provided a way for fans to build communities and connections, while Web3 has allowed teams to take conversations and data out of the walled garden and back into the open domain to gain more control over fandom.
Given the sports industry’s early lessons from Web3, we now know that fans are eager: Adding utility to tokens allows them to gain value beyond just sitting in the fan’s digital wallet. Having these tokens can be the identification of an elite fandom that gives access to a special experience where only hardcore supporters of recognized teams gather, for example. Alternatively, fan tokens can be the key to discounts on new merchandise, exclusive watch parties with players, or VIP opportunities in or out of the stadium.
Instead of just digital badges that have a certain financial value when sold, digital collections with additional utility can allow them to become personal access codes where teams can engage their most passionate fans and reward them for loyalty.
It’s time to prepare for the next phase of Web3, which isn’t going anywhere. But if you do, you have to ask: What do sports fans want more – the opportunity to buy “non-fungible tokens” or to be part of a private fan club that gives them access to exclusive deals and experiences. ?
This is 100% a rhetorical question, and we all know the answer.
Walavalkar is the co-founder and CEO of LiveLike, a technology company that creates custom social experiences with leading industry partners, from Canal+, FloSports, FOX, Sky Group and WarnerMedia to the Golden State Warriors, LaLiga, NASCAR and the NBA.