#11: The Indian Sports-Tech startup acquired by fuboTV
Bengaluru based sports fan-engagement tech startup Edisn.ai was recently acquired by the US-based TV streaming company fuboTV. Here's what went down.
Bengaluru based sports fan-engagement tech startup Edisn.ai was recently acquired by the US-based TV streaming company fuboTV. Here's what went down.
FIRST SOME BASIC BACKGROUND
• ABOUT Edisn.ai —
Edisn.ai is an AI-powered engagement platform that delivers contextual content and social engagement to the fans who ultimately happen to be the users. Edisn.ai applies its AI-powered human recognition engine to live video streams in real-time as and when it happens.
Edisn.ai was founded in 2018 by Mr Ashok Karanth. It is a consumer product but one that is sourced through some other entity— essentially making it a B2B2C.
BUSINESS MODEL OF Edisn.ai —
A lot of big words aside, here's a breakdown of how the business side works —
Generally, broadcasters (TV networks or OTTs) pay the license fee to Edisn.ai to use the software and all the infrastructure.
I say 'generally' because Edisn.ai has also worked with leagues and teams independent of broadcasters. They have worked with NBA and IPL teams to create interactive behind-the-scenes content and create more engaging IPs (Intellectual Property). Some major associations of Edisn.ai include a partnership with Comcast — the parent company of NBC Universal — for select NFL games, and some teams from the J1 League (top-flight soccer league in Japan).
Broadcasters then integrate this technology in the production phase. The software lets the broad-casters show contextual stats and information on TV channels being carried to the smart device or OTT platforms to where they are supplying. But here is where it gets up a notch. The consumers receiving the programming can interact with the live stream in real-time too. The users can get any stat they want with just a touch without ever having to leave their screen.
WHAT ARE CONTEXTUAL STATS and HOW DO THEY WORK?
While live-streaming the game, consumers can click on any player on the screen (something like this) they want. The AI system will recognise the player on the screen (through face, or jersey number) and will present all the information about that player in real-time on the same screen at which the game is going on. The information can be of all sorts including the player's social media posts, betting odds and information, fantasy sports data, merchandise available, bio, brands associated with etc. Based on how much this AI tool understands the user (which increases with every interaction), the system can then decide which stats to show — deep or basic — while still giving the user the complete control to navigate according to their choice.
Now, it is a new age technology that will define the future of how we view live sports. And hence, it is only compatible with new age technology — that is— interactive devices like smartphones, tablets, smart TVs or laptops and not on linear TV.
This technology will keep a lot of parties happy —
THE BROADCASTERS: It is one of the coolest new ways to drive engagement and retain & regain it because the experience is so personalised and interactive. This will directly result in increased watch time on whichever channels the broadcaster integrates this tech. Broad-casters are happy and so are the advertisers.
THE USERS: Based on interactivity and actions performed by users, the platform can collect data and recognise patterns, preferences and behaviour of the user. Next time when the user watches the game, they can hope to get a personalised feed and information according to what particular aspects they like. Here's an example - User A may be interested in goals and shots on target and all the basic stats. User B may be obsessed with assists, secondary assists, extra passes, the whole playmaking and strategy aspect of the game. Broadcasters can then easily personalise the users’ feeds based on what particular users like and care about.
ADVERTISERS: Advertisers would want a piece of the "personalisation pie" too. Broadcasters can place hyper-local onsite ads on the same feed in different parts of the world. We saw a great example of the same in Euro Cup 2021. Here’s a tweet that went viral —
Well, seeing it on TV where the ads are displayed according to the location is one thing. Going even deeper and targeting specific viewers for specific ads according to their preferences (understood by collecting data) will be a whole new game. This looks very much possible.Edisn.ai have explored avenues other than sports as well. They have also let themselves in on interactive movies. Interactive movies allow viewers to interact with them generally by giving them choices wherein each choice plays a different scene and may even have different endings. Some examples are — Kimmy v/s The Reverend and Buddy Thunderstruck: The Maybe Pile.
• ABOUT fuboTV —
FuboTV is a television streaming platform active in the USA, Canada and Spain. In simple terms, users pay a certain fee to watch some select TV channels that Fubo carries instead of paying the cable providers for all the channels, including the ones they don't even watch. Now, this concept is getting popular in the west where the number of people unsubscribing from cable TV networks (cord-cutters as they're called) is increasing every year. Instead, people only want to watch a few of those channels (sports and live events remain the top priorities for them) and in return, they expect to cut the costs that they were incurring paying to the cable providers. As a result, platforms such as Hulu, Sling TV, YouTube TV, DirecTV Stream etc. have become quite popular of late.
According to Pew Research Center, 76% of Americans had a cable subscription in 2015. Cut to (no pun intended) 2021, only 56% of Americans do so today. Among the remaining 44% who do not have subscriptions today, 69% had them in the past but chose to cut those. Among them, 71% stated that they pretty much watch online whatever it is that they have to watch. 69% cited high costs and 45% didn't care for TVs.
Live sports is something that has kept cable TV alive and prevented a complete migration from TVs to OTTs. Think of live sports as a strong tree at the edge of the cliff, around the trunk of which is a rope tied to it. Cable TV is hanging by that rope hoping for the tree and the rope to stay strong. Now, the tree will not break, but the rope might. Even if the rope doesn't break, at least it doesn't have the strength to pull the cable TV business model back up. Live sports will be picked up by the OTT platforms like Amazon or Netflix (it’s already happening) or live TV streaming platforms like fuboTV.
fuboTV’s BUSINESS —
Fubo is mainly a sports-first platform, although it has expanded to other offerings as well. FuboTV secures the carrier rights from networks to stream their channels on its platform. It then pockets a fee from the users who sign up to watch on-demand channels in the form of a subscription. As of Q3 2021, fuboTV had ~945,000 paid subscribers on its platform and a 156% bump in profits.
NEW TECH V/S OLD TECH — WHO’s WINNING?
While TV fights to remain, OTT platforms are not getting complacent with the boom in business they're experiencing. Instead, they're going for the kill by integrating new and exciting fan engagement technology to acquire more and retain existing users.
Acquiring Edisn.ai makes complete sense for fuboTV as they now get an edge over their competitors, a technology that will be the future of sports streaming. It will drive massive engagement on the platform. There will be so many things for users to keep them engaged. Here's an example - an NBA game has a regular playing time of 48 minutes. But a typical game takes about 2-2.5 hours to complete. There are fouls, timeouts, quarter breaks etc. every few minutes, during which the action halts. Those time gaps will be easy to fill by the users who can then look at some stats or their fantasy game standings in the meanwhile.
But that’s only one part. There’s more to it.
Since the start of 2021, fuboTV has made its intentions clear to go big in the sports betting game. Fubo Gaming, a subsidiary company of fuboTV which will look after fuboTV's sportsbook (more on that below) offering, has already started to secure licenses for sports betting. Integration of betting infrastructure depends on the legitimacy of sports betting in a particular US state. This is why the feature won't be available everywhere in the United States. FuboTV made some more moves in the space by bringing TVG and TVG2 channels of FanDuel on its platform. At around the same time, fuboTV had also acquired Vigtory Inc., a sportsbook (it was yet to go live at the time).
SPORTSBOOKS — THE NEW REVENUE STREAMS FOR PROFESSIONAL SPORTS LEAGUES
Professional sports leagues make money by broadcast rights, sponsorships, merchandise and by licensing their IPs (such as documentaries). This has been the business model for years but here could be a new revenue stream for the leagues. Sports betting companies will also pay the leagues for promotions and for the all-important DATA. And let’s not discount the increased consumption of the games and their merchandise because of more number of eyeballs.
A sportsbook company facilitates betting in sports or racing contests. It provides users with a platform and infrastructure to place bets. People place a bet on whether a team (or individual) is going to win a contest or not. The sportsbook or the bookmaker accepts the bid for both sides of possibilities. One who wins gets their entire money back plus some of the loser's money (one whose placed bet went wrong). The remaining 'some' of the loser's money goes to the sportsbook and that's their payday. Now, this was a simple explanation but it happens on a very large scale when multiple people are placing bets on both sides of possibilities.
Here's a quick example -- 'A' bets $100 on X to win. 'B' bets $100 for X to lose. X wins, and 'A' gets $100 plus $90 of B's bet. The remaining $10 from 'B' goes to the sportsbook.
Now, the technology of Edisn.ai can enable users to view real-time odds while they watch sports on fuboTV. This can happen just by tapping on the player on the screen. The process will become not only seamless but also fun to consume. Not to mention — the business model of Edisn.ai is licensing their software and infrastructure to the TV networks and OTT platforms. But, according to Mr Ashok Karanth, Edisn.ai can even add a new layer of revenue by charging '$Y' per 'X million' engagements on top of that. As the OTT offerings increase, along with the rising increased focus on fan engagement tech, all businesses in this space will see the boom.
The sports tech market in 2021 stands at $17.3 billion. This figure is estimated to reach ~$40 billion by 2026, at the current CAGR of ~18%. This assures that we are certainly going to see a lot more new fan engagement innovations in the near future. AND AIN’T THAT EXCITING!