This 1001 startup idea from Yostartups is to build a Platform to Monetize Brand Value of Athletes on a blockchain network. The fans can buy tokens of these branding rights and help their favorite stars get access to early funds to further their career. In the process, fans also make money on the brand appreciation of the athelete or celebrity.
Market Definition for – Platform to Monetize Brand Value of Athletes
As per KPMG report, the global sports market is estimated to worth around $600-700$ billion comprising of sporting events, training, retail goods, infrastructure, betting, etc. which contributes to about 1% of the global GDP. Apart from this, they also have a significant impact on tourism, real estate sector and the overall health and well being of a country.
The IEG forecasted sports sponsorship spending for the year 2017 estimated to be about $44 billion. The firms featured in Forbes’ 2016 ranking of the World’s Most Valuable Sports Agencies have negotiated a collective $40 billion in current professional athlete contracts, netting themselves more than $2 billion in commissions. It highlights that a large number of professional sponsorship deals are done at B2B levels making them opaque.
There are quantifiable tools available now to measure the impact of social media engagement; presenting an excellent opportunity for an athlete to directly monetize the influence he/she has over their fans using the technologies.
Blockchain presents itself as the perfect solution being transparent, fully secured, immutable and customizable. Player information can be encoded at various levels with self-executing smartcontracts to unlock premiums without the need for intermediaries like talent management agencies and individual brand managing agents.
Competitor Analysis for – Platform to Monetize Brand Value of Athletes
TokenStars is a first blockchain company to tokenize the brand of athletes and celebrities. The company will help players fund their promotion, training, travel, tournament access by decentralizing their brand and selling tokens to the users who in return get special offers from the stars. The company is first starting with tennis, slowly expanding the model to other sports, celebrities, models, and actors.
They have already raised $1.5 million in a pre-ICO round, and have completed their ICO in October end. They are aiming to list their tokens on a crypto exchange in Q1 2018.
Pain Point and Target Audience for – Platform to Monetize Brand Value of Athletes
Everyone has heard countless stories of how some of the top athletes like Pele, LeBron James, Ronaldo or Mike Tyson who lived in extreme poverty have become the most celebrated sporting stars of their generation. The start of the sporting career is often not rosy, for example, an aspiring tennis player has to spend almost $100,000 a year to build a decent professional career for which they look for sponsorships and supports.
And there are a lot of potential sports stars in the making if they are appropriately funded in time for training, travel, tournament costs, etc. In the current scenario, the costs of funding are high, and companies at times are not willing to sponsor promising players, as the ROI’s are difficult to calculate, as the decision making is centralized and based on gut feeling. So decentralizing the entire model of funding and sponsoring players is more suitable and can be achieved by blockchain based platforms, where any individual/fan can buy a player’s tokens and help him get access to the much-needed fund. In return, the token buyer can make profits on his investments as the value of token would increase with the player becoming popular with his performance.
Value proposition for – Platform to Monetize Brand Value of Athletes
The idea is to monetize the brand equity of a potential superstar by purchasing their brand tokens early in the career at a discounted price. These tokens form a cumulative value of the player endorsement, sponsorship, and his total net worth. This kind of model is win-win for both the athletes and the individual sponsors. Athletes get access to a transparent avenue of funding, the individuals/fans gain access to their icons and are part of their success journey. There is an extra incentive for both the fan and the athletes to keep each other engaged and reap the rewards of success. The athletes can monetize their social media fan base, online fan clubs directly without the need for any intermediaries like advertisement agencies, talent management agencies, etc. The biggest takeaway for an athlete from the model is a more viable, sustainable and affordable funding to advance his career.
Business Model for – Platform to Monetize Brand Value of Athletes
The proposed startup will have to build an online blockchain based platform, which will have a cryptocurrency token of its own. The token can be sold at a discounted price at the launch to encourage more participation from the fans. These tokens will be used to sponsor various activities in an athlete’s schedule like training, equipment cost, access to better coaches, academy memberships, travel, etc.
The token holders get a part of the athlete’s valuation in terms of their brand equity. The value of these tokens increase and decrease based on the player’s market value. These tokens can be sold at a premium every time an athlete reaches a milestone in his career like a big series win, brand endorsements, etc. The platform gets a small fee for managing the tokens apart from the valuation it creates over a period. The startup can engage local sports clubs, coaches on a revenue-sharing model to generate the supply of good talent.
Way to Market for – Platform to Monetize Brand Value of Athletes
Once the platform is ready, the proposed startup will have to tie up with the local clubs, coaches in the country of launch to help scout talent and get them on board.
As a next step, the startup should run a pilot project with the local club by issuing platform specific tokens to the fans and club members at a discount; this gives the startup to refine the business model to scale up. The experience gained from this project can be used to create smartcontracts that define the arrangements between the sponsors and the athletes. Once the model is refined, the startup can offer this platform nationwide by issuing new tokens via ICO. The next step will be to get endorsement deals for the athletes, bringing more sponsors on board to create more brand value.
Milestones for – Platform to Monetize Brand Value of Athletes
The tie-up with local clubs, coaches will have to be completed within three months of the launch of the platform. The pilot project with the local clubs should be completed within the next six months of operations. The last quarter of the year should be to engage and create more fans in the sporting community for the launch of an ICO.
Investment Needed for Prototyping – Platform to Monetize Brand Value of Athletes
The startup can build its platform on one of the open source blockchain platforms like Ethereum on which the smartcontracts can be coded. The startup can raise funds from accelerators like The Synechron Blockchain Accelerator for Trade Finance, a three-year-old Delhi-based accelerator Startup Tunnel, Boost VC, etc. The funding and the network support from these accelerators can help the startup scale quickly. However, care has to be taken for the blockchain platform to ensure they comply with the local regulations.
Team Capability for – Platform to Monetize Brand Value of Athletes
The team should comprise of an ethereum blockchain developer with experience in coding smartcontracts. The other team members can be sport’s club owners. It is also preferable to have sports forums or fan clubs as partners which have their base worldwide for scaling up quickly. The other team members that would be an addition later would be from cybersecurity, modern cryptography and people with compliance and regulatory experience in blockchains.
Investors/Expert Take on – Platform to Monetize Brand Value of Athletes
The evolution of digital media platforms has revolutionized the business of player representation in the last few years. The same media platforms are now acquiring live broadcasting rights have made the industry more competitive as the digital platforms can add additional revenue streams for the players. The players are more self-aware of their brand and how it can be monetized more efficiently. Players are asking for a more integrated solution for representation, both offline and online.
With a player like Ronaldo and Messi having millions of followers online, the digital rights have become as important as other endorsement deals. A blockchain based platform can integrate all player revenue sources securely through smartcontracts at one place, generating more value out of the players’ brand, both for fans and the athlete himself.
Blockchain with AI and predictive modeling can change the future of player management forever. If AI can predict the value of a player based on his technique, training data, and game data. It can improve the efficiency of this platform and derisk the model further making it lucrative for investors.
This 1001 startup idea article is from Yostartups, YoStartups is a Pre Accelerator and it empowers entrepreneurs to propel their business ideas into successful ventures. Yostartups’ core mission is to take the message of entrepreneurship to 1 billion people globally by 2020.
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