Today’s guest columnist is Miheer Walavalkar, Co-Founder and CEO of LiveLike.
As global industries gather to survive the “crypto winter,” what do we need to do to prepare for a vibrant crypto spring that leverages everything we’ve learned since non-fungible tokens and Web3 first heated up?
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NFTs were initially heralded for their ability to provide digital scarcity, but can we use them for more than that? Given the recent dismal news cycle surrounding cryptocurrencies, the answer may be surprising: for those who can figure out the right formula, the possibilities are endless.
As we look to the next phase of Web3 and its place in our digital economy, maintaining a focus on interactivity and usability is essential, and the sports fan explains why. Today, most digital collections in sports go to the highest bidder and do little to attract higher engagement rates or fan retention. But what if events, teams, athletes and sports brands were used as rewards for fans who were genuinely involved?
Now we see what didn’t work. Take, for example, the case of FTX, a crypto exchange that planned to buy a jersey patch on MLB uniforms, then backed out due to current market conditions. Top Shot, one of the original sources of excitement around digital collections, saw its sales drop 68% year-on-year from April 2021 to 2022. Liverpool got into the NFT game with the launch of the LFC Heroes collection at Polygon. Despite the excitement of the initial launch, Liverpool sold only 5% of its token inventory, disappointing fans and investors.
Delving into why these initiatives have struggled reveals the importance of building better experiences to solve bigger problems. The teams and leagues that gave Web3 the initial push don’t have to worry about missed goals or calculated expectations; instead, it’s time to focus on creating deeper experiences and communities.
There is ample evidence of the potential of digital communities in sport. A number of forward-thinking organizations have pledged, such as NASCAR, the Golden State Warriors and NCAA March Madness, to name a few. Core to our mission at LiveLike is constantly evolving technology that empowers teams like this to bring interactivity and community to fans, fostering engaged customers who are rewarded for their loyalty.
The general business of sports, 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 leveraging community. However, instead of taking the opportunity to revolutionize fandom, sports organizations rarely go beyond season ticket sales to foster loyalty.
What’s more, to date, sports properties have often ceded control of their fan communities to third-party platforms. Most communities are built by fans, from Facebook groups and subreddits to Discord servers. Web3 should implement a membership-based approach analogous to airline miles and hotel points, but with a layer of ownership transferability.
So what should sports brands do to capture the opportunities of Web3? Look at the Green Bay Packers or any publicly owned Bundesliga club. Although the concept is very analog, the general point is the same: a sense of ownership reinforces the hobby. Web3 offers the opportunity to extend the fan experience far beyond the standard and allows clubs to take this concept into the digital space.
Companies like Socios do this very well and are partnering with forward-thinking clubs, taking advantage of the opportunity to engage directly with fans in sports. Incorporating Web3 into a fan engagement strategy allows teams to cultivate loyalty on their platforms and provide incentives for fans to rally around their IP.
The industry needs to reclaim ownership of its communities, and Web3 enables that to happen. Technology trends bounce back, offering lessons to those willing to look back and analyze them. Web2 platforms like Reddit and Facebook have provided fans with ways to build their communities and connections, while Web3 has allowed teams to take conversation and data out of the walled garden and back into the open domain, where they can take more control of their fandom.
Taking lessons learned from the early days of Web3 by the sports industry, we now know fans want more: adding utility to tokens allows them to earn value beyond just sitting in that fan’s digital wallet. Owning the token can be an identification of elite fandom, for example giving access to special experiences where only die-hard supporters gather. Or, it could be a fan token for discounts on new merchandise, exclusive watch parties with players, or VIP opportunities in or out of the stadium.
Rather than a digital badge with a certain financial value if sold, digital collectibles with added utility can become personal access codes for bands to engage their most passionate fans and reward their loyalty.
It’s time to prepare for the next phase of Web3, which isn’t going anywhere. But in doing so, it’s worth asking what a sports fan is more likely to embrace: the opportunity to buy a “non-fungible token” or the opportunity to be part of a private fan club that provides access to exclusive deals and experiences. ?
It’s a 100% rhetorical question, and we all know the answer.
Walavalkar is the co-founder and CEO of LiveLike, which creates personalized social experiences with leading industry partners, from Canal+, FloSports, FOX, Sky Group and WarnerMedia to the Golden State Warriors, LaLiga, NASCAR and the NBA.
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