Are use places the new use cases? The opportunities of smart stadiums
Use cases dominate the communication efforts around 5G, as they showcase the impact of the technology for enterprises and consumers in an easy understandable way. But what about the use places – the physical locations where 5G, IT and industry vertical ecosystems meet and connect devices with applications in the cloud? Do such use places have common characteristics? And how are 5G and IT unlocking significant value for in a defined area like a stadium, airport, or factory?
What is a place-centric ecosystem?
Earlier in our ecosystem evolution blog series, we explored five lenses for understanding the ecosystems around 5G – one of which was place-centric ecosystems. A place-centric ecosystem uses the location as an anchor for all stakeholders – a clearly delimited area that can be indoor, outdoor or a combination. These places typically come with high device density and with a high latent business value yet to be exploited.
Place-centric ecosystems focus on local adaptations, which enables better differentiation than, for example, a global thing-centric ecosystem. Hence the orchestrators of a place ecosystem need to have a and solid understanding of the local market conditions. Some places might also be virtual, so this ecosystem model applies beyond the digital transformation of existing physical places as well.
Locally-anchored ecosystems are quite intuitive, as it is simple to relate to a tangible location like a sports venue, airport or factory. It is easy to identify a beneficiary of the location – the stadium or factory owner, for example, to start an engagement around their digitalization needs. However, there can be a multitude of beneficiaries served in just one place. Consider a sports venue – the beneficiaries could be the sports fans, the stadium owner, the concert-goers or even the sports league. Hence, identifying potential beneficiaries early in the process and aligning their digitalization goals will offer the best value creation opportunities.
The smart stadium: from virtual to reality
To bring the theory to life, let’s explore one particularly attractive place-centric ecosystem – the sports stadium, where digitalization disrupts existing ecosystems. The market for digitally-enhanced and connected venues – or smart stadiums – offers a wide range of business opportunities and is expected to grow by over 22% per year between 2022 and 2027 globally, according to IMARC Group.
But there’s no money without the spectators – it’s that simple. The fan experience is a central element when talking about sports venues. In order to compete with watch-from-home experiences on sophisticated TVs and other devices, enjoyed from the comfort of the couch, creating engaging or convenient – and – fan experiences will be key for the smart stadium experience.
From purchasing tickets and travelling to the stadium, finding their seat or the nearest bathroom, being immersed in (and interacting with) the game and related content, to contactless self-purchasing of merchandise – the fan experience should be seamless, from pre-event engagement to the time they leave the stadium – or even after.
Today, fans in stadiums demand high-performance, robust and reliable mobile coverage to share, interact and stream content. In and around the SoFi stadium in LA, where this year’s Super Bowl was hosted, fans used a record 30.4 terabytes of mobile data on the Verizon network alone. But fans streaming video in the stadium alone will not justify the multi-million-dollar investment in digital infrastructure needed for situations where existing public cellular coverage and private Wi-Fi networking are unable to cope with demand.
Identifying other beneficiaries and ecosystems in the same place is crucial to building a strong business case for the digital infrastructure. To explore this concept, we’ll use the ecosystem mapping framework outlined in our previous episode to look at four different ecosystems related to the smart stadium landscape at the intersection of 5G and IT – and how value can be added in each.
The sports league ecosystem
The sports league ecosystem is one related ecosystem with strong connections to use cases enabled by smart stadiums. It is orchestrated by governing bodies of various sports, is often owned by the participating teams, and signs agreements with various partners. This ecosystem includes players like sports leagues, sports teams, technology and marketing partners.
- Sports league (orchestrator): provides the organizational structure in which teams compete, shares revenue with the teams and enters into partnership agreements with other organizations.
- Individual teams (contributor and beneficiary): make money through league revenue share, merchandising and sponsorship deals.
- Technology and marketing partners (contributors): pay significant fees to have their brands shown during games and in official procedures, as well as supplying technological enhancement to various aspects of the sport.
- Game attendees (beneficiaries): purchase tickets to attend the event and support their team, league or sport. Attracting fans is vital, so creating the best possible fan experience is key for a successful ecosystem.
Typically, the sports league partners with technology companies to supply the necessary digital infrastructure and applications to boost the fan experience. For example, Verizon signed a 10-year partnership with NFL in 2021 to be the official 5G partner – a technology collaboration focused on improving the fan experience, while also including aspects for public safety and crowd management. Cisco and NFL also announced a multi-year partnership early in 2021 in which Cisco is developing a league-wide infrastructure to support gameday operations such as security and digital signage solutions.
The stadium facility ecosystem
The stadium facility ecosystem is anchored around stadiums and is orchestrated by the stadium owner, which often rents the stadiums out to teams and/or event promoters. Players in this ecosystem include the stadium owners (municipality or team), sports teams, a title sponsor and connectivity providers.
- Stadium owners (orchestrator): provide the facilities in which games are held and which serve as the home for the sports team(s). Stadiums are often owned by municipalities or the sports teams themselves.
- Sports teams (contributor and beneficiary): usually have a long-term rental agreement with, or an ownership stake in, the stadium that serves as their ‘home stadium’.
- Sports leagues (contributor and beneficiary): collect and split ticket revenue with stadiums and teams.
- Title sponsor (contributor): pays sponsorship fees and gets naming rights in return.
- Communication service providers (contributor): enter a business partnership with the stadium to provide coverage inside the stadium. Connectivity for broadcasting purposes is often decoupled from connectivity for game attendees.
- Event attendees (beneficiary): spend their money to attend the match or show and want to enjoy onsite entertainment, a safe and comfortable environment, as well as an exciting atmosphere.
The stadium owner will typically be looking into enhancing their operations – managing the stadium more efficiently and safely. One example might be using drones as a cost-effective way to gain a bird’s eye view of a crowd or a perimeter, allowing the analysis of crowd patterns to help improve the flow of people in the venue. Such solutions could be interesting for event organizers, security personnel and also law enforcement.
Surveillance cameras paired with artificial intelligence (AI) or machine learning (ML) algorithms could also be used to detect various characteristics or facilitate ticketless entry with facial recognition for authentication. With facial authentication a stadium owner can easily identify season ticket holders and employees, reducing queuing time at checkpoints in the stadium.
The live event ecosystem
The live event ecosystem is orchestrated by event promoters such as Live Nation, but also consists of music labels, artists and venues. This ecosystem includes players like event promoters, record labels and online concert streaming platforms.
- Event production companies (orchestrator): produce, operate and sell tickets for events.
- Stadiums (contributor and beneficiary): provide the venue for events.
- Music record labels (contributor): supply the bookings to events and share booking revenue with the artists.
- Online concert streaming platforms (contributor): facilitate the streaming of online live events.
- Concert or event attendees (beneficiary): spend their money to enjoy an exciting show.
According to our Ericsson ConsumerLab 10 Hot Consumer Trends report, almost 8 out of 10 respondents believe event halls in 2030 will be equipped with telepresence technology that allows international artists or sports teams to perform digitally as if they were there. The recent ABBA Voyage tour has already provided a real-world example of artists entering fully into the digital space and performing holographically via avatar in a purpose-built arena.
This shift toward immersive digital experiences is more than just a novelty. In early 2021, after revenue from in-person concerts diminished following COVID-19 restrictions, US-based concert promotion giant Live Nation also made a move to capitalize on the increasing popularity of live-streamed events, acquiring a majority stake in the online concert streaming platform Veeps. Both companies highlighted the potential for innovation in creating new ways to connect fans with artists and provide new, multi-layer experiences.
The sports broadcasting ecosystem
The sports broadcasting ecosystem is anchored around the broadcasting process, including players like broadcasters or sports channels, cable TV and IPTV providers, connectivity providers and sports leagues.
- Broadcasters or sports channels (orchestrator): produce live game broadcasts which they sell to consumers via TV providers.
- Sports leagues (contributor and beneficiary): collect revenue from direct-to-consumer streaming as well as TV licensing deals with broadcasting companies.
- IPTV (IP television) and streaming providers (contributor): provide TV packages over fiber, with on-demand streaming as an alternative to linear IPTV.
- Cable TV providers (contributor): deliver sports channels through cable TV packages.
- Viewers (beneficiary): spend their money on cable or IPTV to have a great media experience at home or on the go, that brings them closer to the action.
A key trend in the sports broadcasting ecosystem shows traditional cable and TV package providers being increasingly bypassed by direct-to-consumer offerings, orchestrated by the sports leagues themselves. For example, the number of US households paying for a TV package declined from 100 million in 2011, to 80 million in 2021.
A pilot, set up by Vodafone Germany and DAZN in a live Deutsche Bundesliga (DBL) football game in Germany, already proved that a camera connected directly via 5G to a remote media production center increases flexibility on site. Cameras connected wirelessly to the remote production center reduces the need for big media production trucks at the venue as well as cabling at the venue, lowering overall production cost. Being wireless also allows the cameras to be moved more freely around the venue, enabling the capture of pre- and post-game footage wherever the action is – in the fan zone, behind the scenes or at the entrance, enhancing the viewer experience at home.
Scoring goals in your place ecosystem – how to be a winner
As mentioned earlier, to unlock value in a place you first want to find a few strong cases early on, as building a proven business case will be crucial for stimulating further infrastructure investment. In the case of smart stadiums, streaming or connectivity itself will not be enough justification – it will come down to proving the added value to (or from) key players in the ecosystem. Work together to build small, demand-driven innovations that extend, build on top of or leverage the existing infrastructure.
Once the first use cases have been proven, you’re in a fantastic situation to extend the innovation to other drivers in the same ecosystem or related sectors. After all, a key aspect and benefit of using place-centric ecosystems is the replicability and scalability they offer. Within a place-centric ecosystem, the same go-to-market and deployment capabilities can often be reused from one deployment to another. This allows the business to be easily scaled to other use places within the same market, with no or limited adaptations, offering a great opportunity for growth.
For example, a proven digital solution for a sports stadium could be scaled to other stadiums in the country, leveraging the ecosystem and experience from one deployment to another. Scaling to other places with similar digitalization needs, such as amusement parks, outdoor music festivals, shopping malls, museums and tourist districts can later be considered as well. Less investment, more reward - now that’s a true team goal where everyone’s a winner.
Contact the authors
If you have questions about place-centric ecosystems, ecosystem mapping, or if you have any suggestions for how you would like this series to end, please contact the authors via email or reach out to them directly via their LinkedIn profiles: Harald Baur, Carlos Bravo or Peter Linder.
Acknowledgment: The authors of this ecosystem evolution blog series would like to acknowledge the work and contributions of Arthur D. Little, who conducted a joint analysis with us earlier in 2022.
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Read more about 5G in sports and how it can enhance the fan experience.
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