NBA Commissioner Adam Silver said that 40% of NBA revenue right now comes from fans in buildings, but with the NBA’s global reach and younger fan base, the vast majority of their fans never get to set foot inside an arena.
The NBA is looking for ways to use the coming of 5G and improved technology to create a better virtual fan experience, something NBA Deputy Commissioner Mark Tatum discusses with Jabari Young at CNBC.
The NBA partnered with AT&T to create holograms interviews during telecasts on Turner Sports and ESPN. This could open up the door for more marketing revenue as businesses could use the NBA’s teams and players to activate sponsorships and incorporate fan engagement…
Facebook continues to work behind the scenes to improve its virtual reality courtside seat offering. The social media company worked with the NBA on its “rail-cam” during the bubble. With no spectators, the sideline camera was able to pick NBA action at game speed.
Both of those are works in progress — the resolution of the virtual courtside seats needs to be better, and virtual reality itself needs to become a more widely adopted technology — but it gives a sense of where the league is headed. Young also gets into the trend of virtual online shopping and how the NBA could use that, particularly internationally.
Tatum also touches on the ratings decline the league saw this season, particularly with the NBA Finals (which saw the lowest ratings since 1994), and largely shrugs it off, noting that every sport playing out of season saw similar declines.
Tatum said the league isn’t concerned about the viewership decline. He offered additional social media metrics to prove “tremendous interest” in the league and mentioned the billions of video views and more than 300 million YouTube views during the playoffs, which is up 63% from last year, he said…
“These are things that not only are affecting us but every other sports league,” Tatum said. “But we understand the numbers are what they are.”
How much those numbers bounce back next season, and in 2021-22 when the NBA hopes to return to a traditional schedule length and timing (starting in mid-October), remain to be seen.
However, the YouTube views and social media interest matters — a younger generation of fans still loves the NBA, its stars, its brand of basketball, and the NBA culture. They just don’t sit and watch games often, which is what the current financial model is based upon. However, they do consume highlight packages, discuss the game on Instagram and Twitter (and TikTok and other platforms), and spend money on the sport. Just not the way their parents and grandparents did.
The NBA is ahead of the curve of other American sports leagues in adapting to that new and coming reality. It’s just that all of that remains a work in progress.