From Hype to Reality: Reassessing the D2C Model in Sports

While D2C has often been hailed as the ‘next big thing’ in sports, the reality of building and monetising a successful D2C platform has been more challenging than expected for rightsholders. While some rightsholders have found success in gaining fan engagement and revenue, few have realised significant financial benefits from this channel. Our latest thinking unpicks the challenges and potential strategies for success for players in the D2C market.

Challenges of the D2C Model:

1. Oversaturated market: Sports fans already have multiple platform options vying for their time – pay TV and streaming platforms, news apps, fantasy sports, gambling, news apps and more. This makes it harder for new D2C platforms to stand out and raises the bar for new market entrants.

2. Narrow content offering: Most D2C platforms rely heavily on niche or non-live content like archives and highlights – which appeal primarily to superfans and lack the breadth to attract a wider audience.

3. Challenging economics: Fans are reluctant to pay for additional platforms, especially when live sports remain with broadcasters with more comprehensive packages. Rightsholders are also up against high customer acquisition costs and challenges in retention.

4. Operational complexity: Managing a D2C business requires substantial changes in capabilities and organisational mindset, areas where rightsholders may fall short.

Despite challenges in D2C, there is a vast and complex ecosystem for rightsholders to exploit. Adopting a ‘fan-centric’ approach, in place of a ‘product-led’ approach, will be key.

Success for D2C players

Success in D2C hinges on making bold choices across several areas:

1. Segmentation: Fans are at different stages of engagement, based on geography and profile. Rightsholders must develop an offering tailored to the needs of the segments they wish to activate and grow.

2. Novel content and bundling: Offering exclusive content – potentially through collaboration amongst different stakeholders in an ecosystem – can create more compelling value propositions. Bundling media with merchandise, gamification, and ticketing could boost appeal of new entrants.

3. Supporting partners: Rightsholders should work with broader media platforms and aggregators to reach larger audiences, while maintaining ownership of fan data.

4. Data strategy: A clear data strategy is essential, with the right mechanisms to capture and leverage insights effectively. This can open new revenue streams, from targeted advertising to personalised merchandising.

5.Investment in capabilities: Building the right capabilities, whether internally or through partnerships or acquisitions, will be critical to D2C success. Don’t underestimate the magnitude of evolution required.

While D2C has not delivered as expected for many rightsholders, it still holds potential for engaging superfans and collecting lucrative fan data. However, the focus needs to shift from monetising superfans through subscription-based content alone to a broader and more integrated strategy that combines multiple fan touchpoints.

A successful D2C strategy will require a deep understanding of fan behaviour, flexible content offerings, and large investment in digital capabilities and partnerships. By addressing these challenges, sports organisations can capitalise on the promise that D2C offers.

To find out more, read our full report below.