AI isn’t the new NFT, crypto is clinging on, and other lessons from the sports industry at SXSW 2023
South by Southwest (SXSW) continues to be one of the best places to read about “what’s next?” questions for technology and entertainment.
A ten-day convergence of parallel technology, film, interactive media and music conferences, festivals and summits, SXSW has been held in Austin, Texas annually since 1987.
After attending this year’s edition, here are some of the most important lessons for the sports industry.
AI is not the new NFT
I came into the festival expecting generative artificial intelligence (AI) to be the non-fungible token (NFT)/crypto of the year (ie absolutely everywhere but a mixed bag of how meaningful or applied any of it is). However, I was pleasantly surprised to see that one of the main themes in the discussion was about immersive experiences, both in sports, but more broadly in the entertainment industry.
Seven League founder Richard Ayers whipped attendees into a rallying call and response chant of “F#@K FANS” during his session on “Sport and immersive: The past and future of fan engagement starring Muhammad Ali”.
First slide of my lecture @sxsw tomorrow, Sunday 12 noon 10 in the Four Seasons ballroom. Too strong?? #sportsbiz #sport #immersive #sxsport #wow Sport And Immersive: The Past and Future of Fan Engagement starring Muhammad Ali pic.twitter.com/S4TJFpA9L9
— Richard Ayers (@richardayers) March 11, 2023
Focusing on the immersive experience as the final product of technology, rather than leading with the technology that underpins it, appears to be a more sober, nuanced discussion of how Web 3.0 and metaverse activities (or “activations” from the brand side ) can be deployed in practice.
I participated in roundtable discussions on this topic with brand, technology and sports leaders, hosted by the UK Department for International Trade. The biggest challenge identified is getting mainstream fans/users into metaverse experiences, as existing platforms appear complex and convoluted to non-Web 3.0 natives. This was disputed by the Meta representative at the session (for obvious reasons), but there was an acknowledgment that the challenge of “mainstreaming” this new technology is very real.
A specific problem for sports is how rights holders can build genuinely engaging experiences when their most valuable assets (rights to broadcast live) have already been sold and are therefore unavailable for new initiatives.
The consensus was that games still hold the best clues on how to make immersive experiences more seamless for new audiences, as well as cross-pollinating IP from different brands.
Move.ai is one such company that practically furthers the hype of an immersive metaverse closer to reality. It uses artificial intelligence, computer vision and machine learning for high-quality motion capture from smartphones and off-the-shelf cameras, eliminating the need for expensive and cumbersome traditional markers.
Is crypto still in sports?
As I noted last year, SXSW 2022 had more NFTs and crypto sessions than you could stick a digital pick stick in, with 40 official SXSW presentation sessions expressly devoted to the area. For example, this 2022 SXSW panel proposal to hear FTX founder Sam Bankman-Fried “tell the stories of Twitter DMs, where crypto and sports fit together, and the incredible amount of good they will achieve with their combined powers” aged as milk.
In 2022, an eye-popping amount of money was poured into brand activations involving NFTs and crypto. This year, that was not the case, with the sports field being the odd exception. Crypto fan token company Socios had a big presence on the sports circuit, sponsoring one of the most important networking drinks in the industry – the same event sponsored by Sorare last year. So maybe, at least in sports, crypto isn’t dead, just sleeping? Or, more cynically, is sports one of the last places crypto marketing budgets can find a receptive audience?
SVB collapse – has the music stopped?
Most attendees didn’t want “second largest banking collapse in US history” on the schedule for Friday at SXSW. But news of the collapse of Silicon Valley Bank (SVB), formerly the 16th largest bank in the US, spread quickly through the festival.
Apart from initial waves of panic on Friday, the news did not dampen the general mood at the festival. If the music had stopped, most people didn’t seem to care.
Because of its obvious links to the startup ecosystem, as well as its lean banking model, SVB was an attractive prospect for both US startups and international businesses. This was also part of its downfall. After panic spread online among VCs about the bank’s liquidity, customers quickly withdrew $42 billion in just a single day last week, leaving the bank with $1 billion in negative cash balances. US House of Representatives Financial Services Chairman Patrick McHenry described it as “the first Twitter-driven bank run”.
The collapse of Silicon Valley Bank is a reminder that sports are not immune to broader market forces
Fortunately, the US Federal Reserve joined the US Treasury and Federal Deposit Insurance Corporation (FDIC) in announcing that it will cover all deposits, which appears to have led to a wider contagion in the US banking market.
As much as the sports industry sometimes likes to think it operates in its own world, it is not immune to wider market forces. With interest rates rising, investors are more cautious about how their capital is used. Startups are more immediately affected by this, but it will have profound consequences across all sports sectors.
Going back to predictions for 2022
After finishing with some predictions from last year’s SXSW, it’s been great to see Overtime continue its role as a sports industry disruptor. Following the success of the basketball and American football leagues, Overtime recently announced the launch of Overtime X, a new boxing league focused on highlighting the next generation of athletes in the sport.
Disruptor leagues can create an entertainment product that is ready-made for a modern audience unencumbered by legacy considerations, and Overtime is leading the way.