Embracing the Digital Revolution: The Transformative Impact on the Sports Industry

The sports industry stands at the forefront of a significant paradigm shift, driven by the relentless march of digital technology and its integration into every facet of business. This phenomenon, known as digital transformation, is not merely a trend but a fundamental change that is reshaping the landscape of various economic sectors, including sports.

The Digital Era in Sports

For digital natives, the online world is a familiar playground. However, for traditional systems entrenched in legacy practices, the adoption of digital technologies is a complex and transformative journey. It alters not just the internal mechanics of organizations but also revolutionizes the user experience. The sports industry, much like its counterparts, is experiencing rapid changes, offering unprecedented opportunities for growth through digitization.

The Economic Footprint of Sports

The global sports market has shown resilience and growth, even in the face of economic downturns and crises such as the COVID-19 pandemic. With a projected increase from $486.61 billion USD in 2022 to $623.63 billion USD by 2027, the industry’s economic impact is undeniable. Leading brands like Nike, Adidas, and Puma continue to dominate the market, reflecting the industry’s robustness and the lucrative nature of sports branding.

Technological Innovations Fueling Growth

The application of innovative technologies is a key driver of this growth. Modern tech is transforming every aspect of sports, from recruitment and training to audience experience and media management. This surge in technological influence has led to an increase in the value and power of the sports industry, with digital technology at the heart of these advancements.

The Fourth Industrial Revolution and Sports

The Fourth Industrial Revolution, or Industry 4.0, has ushered in a new era characterized by the fusion of digital, virtual, and real content. This convergence is breaking down barriers and creating a seamless blend of the physical, digital, and biological worlds. Technologies such as AI, robotics, IoT, 3D printing, and quantum computing are now integral to the functioning of products and services essential to modern life.

Digital Technology’s Role in Sports Development

To harness the full potential of digital technology, it must be applied across all business aspects. Sports clubs and organizations are undergoing a transformation in processes, technologies, and operational methods. The development of 5G networks, for instance, is revolutionizing the sports industry by enabling new forms of training, simulations, broadcasting, and on-site experiences tailored to audience demands.

Digital technology has the greatest impact on the industry, that is, it significantly transforms the following segments of the sports industry:

Sports facilities – Smart halls and stadiums place

The integration of digital technology in sports facilities aims to enhance the fan experience by combining the comfort of watching from home with the lively atmosphere of a stadium. This includes features like slow-motion replays and multiple camera angles. Modern stadiums are designed with fan convenience in mind, offering easy navigation to seats, parking, and amenities through mobile apps, digital ticketing to reduce entry time, and augmented reality for information and navigation. Additionally, fans can order food directly to their seats using their phones, ensuring they don’t miss any action. All these services are supported by robust mobile and wireless internet connectivity, negating the need for special equipment.

Connecting with fans and sympathizers

Fan engagement is now a key metric for evaluating sports entities and their digital offerings. Marketing theories emphasize the importance of interaction between organizations and their audience for business success and brand value enhancement. Relationship marketing, a holistic marketing component, offers a systematic approach to foster and maintain long-term consumer relationships. The rise of the Internet and digital technologies has made these marketing principles practical, allowing for deeper connections between fans and sports entities like clubs and teams.

Previously, fans had to carefully plan their schedules to attend or watch sports events. However, the advent of the Internet and smartphones has revolutionized this experience. Fans can now watch events from anywhere with Internet access, and the viewing experience has evolved beyond traditional TV broadcasts. The 2010-2015 period saw a surge in smartphone use and 4G networks, while 2015-2020 brought advancements in technologies like machine learning, computer vision, and blockchain, significantly altering fan engagement and brand activation dynamics.

Performance of athletes and teams

Every team has the potential to rise or fall based on a group of people who share the same passion and goals and work together to achieve success, because in an elite sport and environment it poses a significant challenge to the health and performance of athletes and those charged with supporting them (Salcinovic, et al., 2022).

Digital technology allows athletes and coaches to monitor their performance in real time. However, the integration of these technologies in training and competition is achallenge because both athletes and coaches must fully adapt the available digital technology to their work and training system.

Developed digital platforms enable athletes and teams to improve their performance by adjusting training to data obtained on the health, weaknesses or strengths of each individual athlete, but also to monitor his movement during training or on the field during competition. Inadequate application of digital technology can raise doubts about the accuracy and reliability of the obtained data.

Organization

Productivity is a key factor in business development. Being more efficient and effective today is a business imperative in all business areas, including in the sports industry. Digitization in this context relates to the adequate using of business intelligence. Namely, digital technology has made it possible to collect and analyze a large number of different data, that can be used for improving business and better responding and adapting to changes in the environment.

In the context of the sports industry, it is particularly important to monitor and analyze data on fans, sympathizers of a particular sports club or spectators of a particular sporting event. The goal is to obtain information that will be the basis for creating content and organizing events in order to satisfy the requirements of the target group.

e-Sport

E-sport is a field of sports activity in which people develop and train mental and physical abilities using information and communication technologies (Wagner, 2006). This definition represents one of the first and most concrete definitions of esports in the world. It is evident that the stated definition derived from the general definition of traditional sports by Taidemann from 2004, which is only expanded in the part related to the application of information and communication echnologies (Tiedemann 2004).

Although more than 15 years have passed since this definition of e-Sport in professional literature, a relatively small number of definitions can be found in general.

According to some authors, e-sport represents the psychophysical activity of people in the use of video games, which takes place on computer and other information and communication devices, and which is directed to achieving victory over another player (Andonović, Radovanović, 2009). E-sports is a form of sport where the primary aspects of the sport are determined by electronic systems.

Basically, eSports usually related to competitive video games (professional and amateur), that often coordinate different leagues, levels and tournaments, and where players usually belong to teams or other “sports” organizations. In recent years, e-Sports (electronic sports) have become one of the fastest growing forms of new media driven by the growing origins of (online) gaming and online broadcasting technologies.

The beginnings of e-sports were in the form of small amateur competitions and in a relatively short time grew into a multi-billion dollar business, whose value is constantly increasing. According to the available data, the e-sports market is estimated at 1.44 billion dollars in 2023, and it is expected that until 2029 its value will increase to 5.48 billion dollars.

More than half a billion people followed e-sports in 2023 year, and according to the income generated from e-sports the leading region in the world, is China, followed by the United States of America and Western Europe. On average, an e-sports fan is 26 years old.

According to the same source, about 80% of the sponsorships of the esports industry come from the industry of hardware and peripheral devices for games. Other popular sponsors include energy drink companies and furniture manufacturers.

The fact that the largest number of sponsors comes from the segment of computer equipment manufacturers (hardware and peripherals) indicates that e-Sports will continue to develop in the way and to the extent that the sponsor’s technology is developed and applied.

Conclusion: A New Era for the Sports Industry

The digital transformation in sports has propelled the sports industry into a new development era, marked by abundant opportunities and challenges. The future success of sports organizations will hinge on their ability to adapt, innovate, and effectively implement and utilize technology. Embracing these challenges can lead to a more engaging and competitive future for the sports industry, benefiting fans, athletes, clubs, and organizations alike.