Monday, May 14,
BBC, Sky, And Sports.com Will Dominate
UK Online Sports
Betting revenues aren't going to salvage ailing UK sports
Web sites -- this market is still over-supplied, and the
next five years will see both the multi-sports and single-sport
market decimated, leaving a few leading players, according
to a new Report by Forrester Research. Forrester advises
that survival depends on capturing unique content rights,
building a strong user community, and leveraging online and
offline promotional abilities.
"UK sports sites believe that betting will generate
significant income going forward. They're wrong," said
Forrester Analyst Rebecca Ulph. "Only 15% of sports
sites' revenues will come from this source in 2006, as technologies
like interactive TV attract an increasing amount of betting
revenues. Although more than £700 million of bets will
flow through sports sites annually by 2006, the retained
income will only reach £70 million. Bookmakers will
return much of the money placed as bets to the bettors in
the form of winnings, and 10% will go in various taxes. Those
sites developing in-house betting capabilities will retain
all the accrued revenue but will also bear the burden of
a higher level of cost. Without this new revenue stream to
rely on, the sports site market will still be over-supplied
and, despite recent closures, more casualties should be expected."
At present, the sports site market consists of an abundance
of both multi- and single-sport coverage providers, with
audiences spread thinly -- traditional publishers are already
retrenching and even the big pure plays are suffering. The
most popular UK sports sites are football clubs' own sites.
As the over-supplied sports site market struggles with inadequate
revenues, sites will look for survival strategies. Those
that have unique content and strong user communities and
can leverage these through sophisticated marketing will be
best placed. The key to driving a significant, monetisable
user base is to offer users content that they cannot get
elsewhere. Therefore, generic sport sites must acquire online
rights, sign up top personalities and enhance coverage with
unique new and archive multimedia to survive. For those sites
unable to afford exclusive online rights, user-generated
content is the solution for providing unique material. Such
content is cheap and drives large, loyal audiences, bound
together by common interests -- content creation, interactive
features, and eCommerce integrated into communities.
"To maximise both revenue and traffic, sites need to
re-evaluate their promotional offerings," Ulph added. "Advertising
remains sports sites' key revenue stream: it will contribute
58% of income in 2006, but half of this will come from performance-based
deals, up from 7% in 2000. To ensure that they attract advertisers,
winning sports sites must offer online replication of offline
sponsorship models, develop performance-based pricing, and
exploit cross-promotional capability.
"Over the next year or so, three major successful multi-sports
players will emerge, leaving just one or two profitable sites
covering each sport by 2006. By 2003, Sports.com, Sky, and
the BBC will control the multi-sports site market -- and
those sites that can't acquire strong, unique, focused content
will die. By 2006, the single-sport market will streamline
dramatically, with winners being those that successfully
leverage the revenue-generating power of communities or defray
costs across networks."
Analytics Will Be a Hot Career Choice
According to Gartner, Inc., e-business investments, especially
in the Web channel, are now subject to the same scrutiny
and return on investment due diligence as other major investments.
More than a year ago, Gartner analysts predicted that 50
percent of all e-business initiatives would fail. Today,
those failures are mounting due to a lack of analytics. The
nascent field of measuring effectiveness in all selling channels,
particularly in the Web channel, is about to spawn some of
the hottest career opportunities over the next five to 10
The key to making e-business a viable strategy lies in deploying
robust analytics. Yet many enterprise executives dismiss
Web analytics as being interesting for Webmasters but not
for business managers.
Gartner defines Web analytics as the metrics that measure
effectiveness of e-business operations in terms of operations,
customer experience and return on investment. Web analytics
help enterprises prioritize Web channel activities and solutions.
Moreover, in times of economic downturn, a need exists more
than ever for enterprises to execute precision marketing,
effective sales and spot-on service. That is why enterprises
should invest in Web analytics as a strategic e-business
initiative. The key inhibitor, however, is not technology.
The inhibitors are a serious lack of brainpower to interpret
Web data, the inability to transform such data into the understanding
of customer behavior, and failing to define the right response.
According to Gartner, by 2005, enterprises will need three
times as many professionals on their analytic staffs as they
need today. The demand for analytic talent today outweighs
supply by at least two to one.
Enterprises should invest in analytic skills and centralize
them in one analytical department, because such talent is
too scarce and expensive to leave scattered. For tactical
purposes, this department should be focused at analyzing
customer behavior in the channel, especially the Web channel.
Strategically, a corporate center of analytic excellence
can be the catalyst for far more sophisticated business technology
"The killer trend for e-business just may be the real-time
enterprise," said Frank Buytendijk, senior research
analyst at Gartner. "Web analytics enable executives
and managers to know where the company is in the quest for
the real-time enterprise and when the company will achieve
the ultimate real-time business capability across all channels,
from the shop floor to the e-marketplace. People with the
skills to enable and accelerate that goal will be in hot