A business model is a strategy companies adopt to make a profit and generate leads. Like every industry with a well-thought-out model for its businesses, the sporting industry is no exception. We now have many business niches, like the betting industry taking a slice of the cake.
If you’re a soccer fan, you can consider betting on various Champions League odds sports betting sites. Business models are crucial to the growth of all businesses. They help them develop and attract investors, recruit and retain workers, and motivate management.
Businesses update their business model regularly and anticipate new trends and challenges to be one step ahead of competitors. Having a business model also helps investors assess companies before investing in them.
The sports industry has a proven and tested business model that worked for them over the years. These models identify the target market and offer incentives to attract and retain them. We will discuss five business models to help you understand how the sports industry uses them.
Contents in the Article
Fan Relationship Management Model
The sports industry uses technologically advanced tools to collect fans’ data and insight. The data gathered are used to customize a personalized customer experience focusing on multiple touch points to nurture lasting relationships with their fans and lovers of sports.
The sports management operating this fan relationship model has mastered analytics-based innovation, leveraging it to stay thriving and at the top of every fan list in this digital age. Fans can also be part of the game by betting. You can make Champions League predictions if you’re a soccer fan or bet on other sports.
Freemium Business Model
Freemium is a business model in which a business gives consumers or, as the case may be, fans limited features at no cost and then subsequently charges a premium for advanced features. This model has been used over time since the 1980s till date.
The additional features are enticing enough to make the audiences pay to watch or play and, in turn, generate profits and help the sports management to thrive.
The freemium features are, for instance, used to fill empty seats, increase the fan base, power subs, create private leagues, and advanced stats.
The bundling model is a marketing strategy companies use to sell many products or services as a single unit. This is often at a discount or a reduced cost.
The sports industry uses this model to attract more people to buy tickets. For instance, in sports ticketing, a buyer can buy one ticket for two persons or pay half the fee for a season’s game. This is usually done like a lottery game drawing more players to it, but before one is allowed to play, a fee is deposited. Many people will lose, and this will, in turn, bring in more profit.
The economic motivation behind the bundling model is to boost revenue. Bundling boosts profit by yielding revenue per buyer transaction and increasing transaction frequency.
The franchise model is a contractual business relationship whereby a well-known brand allows an independently owned brand or business to use its business model, branding, and other intellectual property. In return, the established brand agrees to pay an upfront fee, plus royalties, to the independent business.
There are a lot of collaborative contracts like this in the sports industry. Brands like sprite, Nike, and McDonald’s have collaborated with athletes to put their products on the global map. Sprite, for instance, has partnered with LeBron James to launch “6 Mix”, a new product that blends the traditional refreshing flavor of sprite with a taste of orange and cherry.
LeBron James fans who purchased the product would have done so because a person they respect and love is the face of the brand.
These collaborations are often a win-win situation for everyone involved, especially the sports industry, which uses that to generate more revenue for its sustainability.
The subscription model has a lot of benefits for the sports industry, as it generates revenue and increases viewership. It allows fans worldwide to consume video content at any time of the day, which works perfectly with the viewing habits of this generation. The subscription model kept viewers glued to their screens during the global pandemic, where live viewing was prohibited.
According to a survey published by business insider, most of those who subscribe to cable TV do so solely because of sports. And they most likely do so to follow games in significant events like the UCL so that they can engage in the Champions League and other activities.
The subscription model adopted by the sports industry helps to generate more revenue aside from the revenue from advertisements.