when IT helps to transform emotion into revenue and profit

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Mention: This article was written by Eric Lucas, Senior Manager at Orange Consulting

taginlineimportThe Sports and Live Events industry amazingly seems to be recession resistant and rather insensitive to economic downturns. For example, in their local currencies, the “big five” soccer leagues in Europe all managed to increase their total revenues in 2008/09. Sixty huge stadium projects are to be completed in the next five years all over the world. Euro 2016, the 2016 UEFA European Football Championship, will alone represent a massive investment, estimated at 1.5 to 1.9 billion euros for nine stadiums.

The physical quality of venues, as well as their perceived quality, heavily influence ticket revenue. UK and Germany soccer leagues, largely recognised for the quality of their stadiums, derive between 25 and 30% of their overall revenues from ticket sales, compared with15% or less in France and Italy.

Emotion is vital for success in this industry, both as a “raw material” and a final output.

Various business models coexist for transforming emotion into real business for a stadium operator, and they each translate into different stadium designs.

IT is no longer a “nice to have” in this new generation of stadiums: it is a key enabler of emotion, enhancing the experience and the journey of every single spectator.

 

revenue from attendees correlates with quality of venues
The example of the Renaissance program initiated by the National Football League in the USA in the late 90’s shows how much the quality of the venues helps to grow not only revenue, but also operating income and … the value of the teams themselves, all growing at solid two or three digits.

Same observations can be made in Europe, when comparing average spend per attendee across the “big five” countries. Good to know when TV rights revenues might be in jeopardy !

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different business models exist, but one mantra for all: maximize attendance to maximize attendee revenue

While different business models coexist, they all have the same goal : maximize occupancy, and average spend on match days or non-match days.
 

When analyzing the performance and the layout of different stadiums, three models seem to emerge. We have classified them as : VIP centric, hospitality driven, event based.
 

All three models generate an occupancy rate as high as 97 to 100% on match days, and interestingly are all IT intensive in their own way, illustrating the “stadium 2.0” concept.
With 50% of its attendance revenue coming from 15% of the seated capacity, Emirates Stadium in London exemplifies the VIP centric stadium .
 

The Veltins Arena, homeland of Schalke 04 in Germany, is a cashless stadium: it offers attendees an RFID member card, which is the sole means of payment accepted in food & beverage booths within the arena.
 

RFID, combined with optimal booth locations and simple, fast-food-like menus, ensure easily repeatable and fast turn arounds of orders. The outcome: high hospitality revenue increased by loyalty programs using the same RFID card.
 

Dallas Cowboys Stadium in the US is one of the most IT-intensive arenas with their $42 million giant display, transforming replays into live dramaturgic events, not speaking of their three giantTV and 1800 standard displays, convention and wedding facilities, etc.

 

Next article next week on the same subject Stadium 2.0:

-successfully operating a stadium 2.0 is about using IT to create a virtous continuum of emotions

- reconciling emotion with business, through IT

Mention: This article was written by Eric Lucas, Senior Manager at Orange Consulting

Alexandra Operto

Entre Janvier 2010 et Juin 2011, j'ai travaillé dans l'équipe de communication externe chez Orange  Business Services en tant que community manager. Mon rôle était notamment d'animer les blogs d'Orange Business Services, et de les faire évoluer. Mais aussi de gérer la page Facebook, et le compte Twitter d'Orange Business @orangebusiness