Smart Stadiums - Reshaping stadium experience in the Digital age
Nils Barnickel - Senior Principal
Dino Saric - Senior Research Specialist
João Sousa - Senior Partner
The global acceleration of digital transformation has received an additional boost from the COVID-19 pandemic. We have seen this impact in all areas of society, from schools to workplaces to media and entertainment, where there has been a massive increase in digital content consumption. We expect this digital impact to extend to sports and events in a post-COVID world. Stadium experience will be influenced by new possibilities and opportunities for fans, created by increasing advancements in digital technology. As a result, fan behaviour and expectations will change.
In a post-COVID world we will see accelerated changes in fan behavior and expectations, with new possibilities and opportunities enabled by increasing advancements in digital technology
Key trends and changes in fan behaviour driving this shift
- Increasingly, stadiums need to compete with the watch-from-home experience of sophisticated TVs, 2nd screens and access to social media from the couch
- Digital media is gradually eroding the millennial fan share
- In-stadium experiences must meet ever rising fan expectations coming from an increasingly digitized consumer world
- Mobile data usage is exploding - sports venues are seeing ~70% growth in data usage YoY
- Security concerns at large crowd events are increasing
These consumer trends are enabled by advancements in digital technology with accelerating innovation cycles.
Exhibit 1: Converging trends enabling and demanding new, innovative stadium experiences
The Smart Stadium opportunity
Putting these shifts in fan behaviour and digital technology advancements into perspective reveals the opportunity of Smart Stadiums. Smart Stadiums have the potential to bring fans back to the sporting venue to revive the unique social fan experience. Smart Stadiums are enhancing stadium operations and security, deepening loyalty and adding value to the brand and sponsors.
Smart Stadiums have the potential to bring fans back to the sporting venue to revive the unique social fan experience
Imagine what is possible in a fully digitized Smart Stadium.
- Going to watch a football match at the stadium and being able to see the field from a player’s perspective
- If you miss a key moment, you can point your phone at the try line and watch it back in crystal-clear vision with 360-degree replays
- Have your favourite meal and drink pre-ordered for you and delivered directly to your seat
This is already becoming a reality. Home stadiums of Atletico Madrid, Arsenal, Liverpool and Manchester City are all pioneering in-game technology.
Exhibit 2: Example - Atletico Madrid’s Wanda Metropolitano “First Smart Stadium in Europe”
Exhibit 3: Example - In-game technology with Arsenal, Liverpool, Manchester City
This is only the beginning. There are dozens of Smart Stadium use cases targeting fan experience and convenience, brand and sponsor value generation, team and player intelligence and stadium operations (see Exhibit 4).
Exhibit 4: To capture this opportunity there is an ever-growing number of Smart Stadium use cases
In numbers, this Smart Stadium opportunity shows an attractive global market development from 8.4 billion USD in 2020 to more than 18 billion USD in 2025 with a high double-digit CAGR of ~22%. Europe is dominating the Smart Stadium market, followed by North America and APAC as shown in Exhibit 5 below.
The Smart Stadium opportunity will be worth more than 18 billion USD in 2025
Exhibit 5: Smart Stadium Market Size Forecast and Global Distribution
Sources: Market Watch; Grand View research; Markets and Markets
Smart Stadium building blocks and success factors
How can we capture this Smart Stadium opportunity? The building blocks required to provide Smart Stadium experiences can be identified along 3 layers as illustrated in Exhibit 6 below.
- An ecosystem of innovative use cases – ranging from fan experience and convenience to team and player intelligence, media, advertising sponsors, stadium operations and beyond-stadium experiences (see side box p.8/9 combined)
- An orchestration and platform layer – a service integration platform to orchestrate the Smart Stadium use case solutions underpinned by a well-defined operating model between the different stakeholders in the Smart Stadium ecosystem, combined with a value share model ensuring optimal monetization and incentives across stakeholders
- Underlying technology and connectivity infrastructure – providing the stadium connectivity networks (WiFi/4G/5G/fiber) and Edge cloud for high-performance visual data processing and the underlying sensor infrastructure
It is fundamental to separate Smart Stadium use case services from the infrastructure and platform to enable a competitive ecosystem and ensure the best possible outcomes
The most critical success factor in building these 3 enabling Smart Stadium layers is to ensure a clear and clean separation of concerns. It is fundamental to separate use case services from the infrastructure and platform to enable a competitive ecosystem. This approach ensures the best possible outcomes despite many vendors pitching full stack approaches and solutions to increase value share and dependencies.
Exhibit 6: Smart Stadium building blocks
The Smart Stadium orchestration and platform layer
The integration platform must ensure interoperability between use case solutions across vendor boundaries leveraging standard protocols and mediation services. The platform should provide shared capabilities such as data management and analytics, device and connectivity management and end-to-end cyber security. An API access layer is most suitable to ensure easy orchestration across use cases, providing seamless integration, as illustrated in Exhibit 7 below.
Exhibit 7: Smart Stadium orchestration and platform layer
The Smart Stadium operating model
The Smart Stadium operating model needs to have clearly defined roles and responsibilities across the technology vendor ecosystem e.g. in terms of a detailed RASCI matrix. A governance model needs to be defined with clear decision making and escalation processes e.g. for cases when system issues appear and need to be resolved across the vendor chain considering the time criticality of stadium events. This also requires an effective Smart Stadium technology management organization including, for example, capabilities such as media technology partner management, use case solution vendor management, end-to-end fan CEX, and smart stadium control room operations.
The Smart Stadium value share model
To make this Smart Stadium ecosystem viable from a commercial perspective a value share model is required. The value flows between the use case solution vendors and platform and connectivity providers. Ultimately, the fans need to be well analyzed and monetization options need to be assessed. See below Exhibit 8.
Exhibit 8: Smart Stadium value share model
This requires different business models to optimize the value share for the stadium owner ranging from traditional formalization of revenue share agreements or more advanced transaction-based and pay-per-use pricing. To illustrate this with an example, consider a fan that pays with an in-app purchase for a 360-degree replay feature in the official stadium app. The technology solution vendor behind this service shares his revenue with the stadium in exchange for access to the fan base through the stadium app, and the 360-degree 8k stadium camera system. To leverage this capability, the stadium is paying another technology operator with a yearly contract to provision and maintain the high-performance camera system.
The Smart Stadium technology and connectivity infrastructure
To enable the innovative Smart Stadium use cases, stadiums need cutting-edge technology and connectivity infrastructure that goes beyond the typical DAS (in-stadium distributed antenna systems) and legacy in-stadium WiFi networks. State-of the-art stadium technology and connectivity infrastructure requires high-performance WiFi and 5G enabled through a granular stadium fiber network to cope with the highest requirements on latency and capacity for real-time mass events. The Smart Stadium also provides the opportunity to deploy an Edge cloud for high-performance visual data processing on-site e.g. for 360-degree video rendering in (near) real-time.
Vendor landscape across the Smart Stadium ecosystem
Across the 3 layers of the Smart Stadium ecosystem we are facing a very fragmented and heterogenous vendor landscape. Indeed, there are hundreds of vendors entering and positioning themselves in the Smart Stadium space as outlined in the non-exhaustive overview below (see Exhibit 9). Given this highly fragmented vendor landscape it is important to have a trusted orchestration partner to bring all of the different capabilities and vendors together while ensuring optimal outcomes and no vendor lock-in.
Exhibit 9: Across the 3 layers hundreds of tech vendors try to position themselves
Recommended way forward and how Delta Partners can help to make it happen
The complexity of the Smart Stadium ecosystem across solution and service providers, platform vendors and infrastructure providers requires vendor agnostic orchestration to ensure the best possible outcome and avoid any vendor bias and lock-in. Delta Partners can provide end-to-end support for stadiums and clubs with a vendor agnostic approach to make the transition to the Smart Stadium vision happen. Delta Partners is able to combine the following unique blend of capabilities:
- Specialized TMT strategy boutique combining Connectivity, Media and Smart Technology Solutions
- Dedicated Media, Sports and Entertainment practice, combined with Digital and Technology practice
- Combined commercial Smart Stadium expertise deep technical experience and relationships and networks across the ecosystem
- And finally, a proven client track record and partner ecosystem to ensure success
The complexity of the Smart Stadium ecosystem across solution and service providers, platform vendors and infrastructure providers requires vendor agnostic orchestration to avoid any vendor bias and lock-in
The approach we are suggesting is based on a tried and tested methodology for Smart Stadium development from strategic concept to impact as outlined in Exhibit 10 below.
Exhibit 10: Methodology for recommended way forward
This approach has been applied, iterated and refined in multiple engagements across Europe, North America, Middle East and South East Asia with leading clubs, mega event organizers, telecom players, smart city developers and others as illustrated in Exhibit 11 below.
Exhibit 11: Delta Partners references in building-up successful Smart Stadiums
Our perspective on key success factors to capture the Smart Stadium opportunity
Based on our exposure and experience across various Smart Stadium engagements, we have identified the following 5 success factors as key to capture the full Smart Stadium opportunity:
- Own in-stadium connectivity
- Own in-stadium connectivity distribution to analyse mobile engagement patterns and use insights to increase return on investment
- Negotiate reasonable revenue share agreements with MNOs
- Evolve the fan experience
- Merge advanced digital connectivity at the venues with unprecedented contextual services and experiences
- Monetize through innovative business models e.g. targeted advertisement
- Win-win content right agreements
- Negotiate content access agreements that are win-win for content owners, facilitators and distributors (with equitable value distribution among shareholders)
- Ensure proper digital rights management (DRM)
- Grow the ecosystem
- Develop an ecosystem of 3rd party application providers to guarantee best of breed solutions and access to latest Smart Stadium innovations
- Orchestrate and integrate solution ecosystem and monetize with revenue share
- Divide-and-conquer to make the stadium a platform for business and technology
- Separate Smart Stadium use case solutions and services from connectivity infrastructure to enable a competitive ecosystem and get the best possible outcome
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