From injury prevention, augmented video.. to blockchain
With VC firms investing a record $9.3B into U.S.-based AI startups in 2018 — more than 8x the funding levels from just 5 years ago — AI has become a hot topic in the investment and the tech community as a whole.
Google CEO Sundar Pichai once said “We are moving from a mobile first’s world to an AI first world”.
As you can see in our AI sports market map below, you could also argue that the world of sports AI is slowly becoming omnipresent. In fact, AI is now powering apps, security systems, software, video highlights, ticketing systems and more. In this weekly market intelligence analysis we’re going to walk you through the major AI segments and use cases in the world of sports today, and what we’re likely to see next in the coming years.
??1. Injury prevention, analytics, training & scouting:
The beauty of AI is its ability to take a large amount of data and makes sense of it to generate meaningful insights. With that in mind, today we’re seeing many startups that are leveraging AI to analyze a large amount of data (like wearable sensor data and video) in order to assess the risk factors of injuries, evaluate and even scout players. This is the case of companies like Kitman Labs, Mycoach, and CoachMePlus.
In addition, pro teams often collect a large amount of data from various sources. This has become problematic for many of them especially when it comes to aggregating and visualizing such data in a meaningful way. This is the focus of startups like Kinduct. Concretely they “analyze and visualize” players’ data with a suite of aggregation, prediction, and reporting tools to help teams make better decisions.
⬆️ The Upside: We believe that over time these various types of AI-based injury prevention and training systems will become better at predicting the risk of injuries as new types of wearable biometric data (electrolyte, lactic acid, sweat volume, glucose, protein) become widely available and continue to feed the system. These new types of biomarkers will make the AI-based model more capable and insightful over time.
? 2. Augmented video:
In recent years, AI has also transformed the sports fans viewing experience. We’re seeing the emergence of advanced AI that can leverage live statistical data (off of advanced camera or sensors) to enable interactive applications and augmented video that help media, teams and fans visualize and add context to stories about the game. This is what companies such as Second Spectrum, ShotTracker, and SportLogiq are focusing on. It’s worth mentioning that ShotTracker, unlike Second Spectrum, can capture the data in real-time during live games. The data is also being captured from wearable sensors located in the players’ shoes, sleeves, and basket ball. In the case of Second Spectrum, they’re collecting the data from advanced cameras located in the stadium. It is also important to mention that in some cases, pro teams are also using such data to make real time tactical decisions during live games.
⬆️ The Upside: We believe that the augmented sports viewing experience is set to become the norm in the world of live sports TV in the coming years. We also expect that AR apps leveraging and visualizing statistical data will become a must-have. ShotTracker gave us a quick preview (see image below) of their AR app enabling fans to point to a player on the field and see live statistical data as an AR overlay. You can watch the video of this AR app here.
We believe this will appeal to fans in the future. We also expect this type of experience to become available on AR glasses so that fans using a pair of Hololens or Magic Leap One will be able to enjoy a more hands-free experience at a stadium and visualize players’ data through the glasses. We also think that live betting will become a key part of the augmented video experience. The idea here is to allow fans to watch augmented video replays and bet on the next play, and compete with their friends in real-time during live games. Ultimately this will enhance the fans experience, increase fans engagement, drive ticket sales, and teams’ top line.
AI is also enhancing the sports news industry. AI startups such as NewsCart, Data Skrive / Hero Sports, Cloudera, and Automated Insights, have built software that automatically create sports news content using machine learning technology.
Photo: Data Skrive
AI can also be used to analyze the fan’s emotions in real-time during game. This is what a company called Affectiva is focusing on. Their AI software detects all things human: nuanced emotions, complex cognitive states, behaviors, activities, interactions and objects people use. It allows the teams to better understand their fans, see what they like and adjust accordingly.
⬆️ The Upside: We believe that AI based solutions which help automate the sports news are a great way to help sports broadcasters and teams improve efficiency and save costs. However one cannot replace the creativity of sports writers, and opinion. But this is a great tool to help compile relevant data such as stats. Moving forward, we expect AI based sports news to become more capable due to the emergence of deep learning, neural networks and quantum computing.
? 4. Security and Blockchain
AI also plays a key role to protect stadiums against security alerts, data breaches, or financial transactions frauds. There’s a myriad of AI startups that have built solutions for ticketing and security services. They typically use blockchain or facial recognition technologies. Those include companies such as Aventus, Blink Identity, Evopass, EventChain, Upgraded, Evolv Technology, and Zenus. For example: Aventus and EventChain SmartTickets use an AI blockchain solution that makes sports ticketing systems more secure. Blink Identity uses a facial recognition technology to identify fans when walking inside the stadium. Evolv, on the other hand, built a security gate that can scan the body of fans as they are walking through the gate.
⬆️ The Upside: Stadiums have become a prime target for many hackers or terrorists around the world. In some cases, like in the U.S., just one-third of the 1,350 sports arenas are takin the necessary measures to secure themselves, according to the National Center for Spectator Sports, Safety and Security (NCS4) at the University of Southern Mississippi. With the growing adoption of IoT devices (wearables, smart cameras..) within stadiums, the threat is even bigger. An HP enterprise survey has shown that 70% of the IOT devices out there are vulnerable to attacks. Of all the AI based security systems out there, blockchain is probably the most promising one as it can touch across many areas like ticketing/fraud, transactions, DRM and more. We believe that more stadiums will adopt AI based solutions to secure their stadiums in order to try to offset the growing number of threats out there. We also expect technologies to become more capable and more affordable over time.
? 5. Video highlights and teasers:
Another area where AI has been gaining lots of traction is the area of AI-based video highlights and teasers which enable broadcasters, publishers, and teams to automate the process using AI and neural networks. The key players in this vertical are companies like IBM, Vilynx, Reely, Minute.ly, and WSC Sports. Many of them are already working with major sports leagues including MLS, NASCAR, NBA, NCAA / March Madness, and the U.S. Open (tennis) to help automate video highlights and teasers. Early results have shown that it has helped improve the fan experience and even increase revenues for pro teams, advertisers, and brands.
⬆️ The Upside: There are some great case studies that have shown that AI-based video highlights have helped teams, advertisers increase their ad revenue. How? The AI automatically creates the most popular video content which helps drive a higher number of clicks through and then ad revenue. Companies like Vilynx, working with major publishers like Turner, ESPN, CBS, has helped some of these corporations increase their ad revenue by as much as 40%+. With that in mind, we believe that pro teams are moving towards a world where more fans want customized content — news, stories, social content, and video. Teams are also trying to adopt a subscription-based model with very sticky and customized content. This is where leveraging AI based solutions from companies like Vilynx can become very valuable. One could imagine a soccer team offering a custom subscription based service where they would automatically send out the best AI based video highlights of the fan’s favorite players packaged up with associated content related to the player. By adopting a Netflix type model, teams could generate more recurring and predictable revenues which would help them drive their top line far beyond ticket sales and sponsorship.
? 6. Voice assistants and chatbots:
One of the hottest AI topics these days has been chatbots. Many teams in the NBA, NHL, and NFL, among other leagues, have launched chatbots enabling fans to get score updates, order associated content, watch video highlights, play games and more. In our view, there’s a great opportunity for teams to leverage chatbots to drive additional revenues. The chatbot market is expected to generate $1.23B in revenue by 2025. Chatbots like Messenger has become a new popular way of communications that is now overtaking emails. In fact, people now are 3.5 times more likely to open a Messenger message than marketing email. Some studies are also showing that chatbots are already handling 30% of the total transactions. With that being said, however, most pro teams have not been able to fully monetize the chatbots opportunity. In fact, chatbots only helped the Tampa Bay Lightning (NHL) generate $25,000 in extra annual revenue. However, chatbots, if done right, can help teams bring new fans and propel their top-line in a big way. The perfect example of this is the Golden State Warriors (NBA) which have built chatbots, helping them gain 1 million new fans. But the Warriors are probably the exception to the rule.
Besides large tech companies like Google, Samsung, Alibaba, Facebook, Microsoft, and Nuance, that have built chatbot solutions, other leading chatbots startups include companies like Satisfi Labs, ReplyBuy, and Inference. For example, the current version of ReplyBuy enables the San Francisco 49ers to send a text message to all their fans — whoever replies ‘Buy Now’ the fastest gets tickets. Today, the company is making the platform immensely more useful with the launch of ReplyBuy.ai.
⬆️ The Upside: We expect to see the emergence of next generation chatbots that will be truly intelligent, leverage the knowledge graph and neural networks. They will also be tied to the teams’ backend (like their CRM) and fully understand and anticipate fans’ preferences. Concretely, those advanced chatbots will be able to suggest things like this to fans: “The last time you bought Neymar Jr. jersey. Would you like to buy his new jersey using your credit card on file?” or “Your mom’s birthday is approaching, would you like to buy her a ticket to the next PSG game?” Those next-gen sports chatbots, powered by neural networks, will also be able to automatically create video highlights of the most popular video content tailored to fan preferences which will help drive ad revenue long-term. On the voice assistant side of things, we also expect to see the emergence of cross-platform AI conversational experiences allowing fans to have a seamless conversation with a voice assistant across multiple platforms (think about communicating between smartphones-tablets-smart TVs-cars). The assistants can also fully understand fan preferences as well as the context of the conversation.
? 7.AI and e-commerce
AI has had a profound impact in the world of e-commerce for pro sports over the years. To be fair, there’s some overlap with AI security/blockchain startups that we mentioned earlier as security is a major issue when it comes to e-commerce solutions for stadiums. Generally speaking, we’re seeing the emergence of AI solutions that enable stadiums to improve the efficiency of their ticketing and customer care system. This is what companies like IBM, SAP, DataRobot, and Dataperformers, have been focusing on. Other companies have gone one step further and used AI to help drive online sales for major sports retailers like Nike or GAP. This is the case of Fit3D. Fit3D built an AI technology which helps major online retailers create user profiles, find the best fit for their customers, and improve the shopping experience online. How do they do that? They scanned 500,000 bodies in three dimensions from 45 countries and 47 U.S. States. Big brands are now using their 3-D body scan database to change their size strategy with access to 3D body scans for design and validation. Their online retailers are already seeing great lift in conversion rates through their AI solution.
⬆️ The Upside: We expect AI to become more capable and intelligent which will help make ticketing and customer care systems even more efficient and secure. We believe the advancements in neural network type technologies, coupled with the emergence of quantum computing, will be key drivers there.
⭐️ 8.Sponsorship & advertising
Over the past few years, advancements in AI and computer vision have also enabled AI startups such as GumGum Sports to help brands, agencies, and rights holders capture the full media value of sports sponsorships that include visible signage across television and social media (Youtube videos, etc.). How does it work? The company uses AI and computer vision to analyze live broadcasts, social media, and digital streaming, and then provide timely and comprehensive media valuations. GumGum has gained good momentum as it has helped clients discover nearly $1B in unrealized social media value alone in 2018, underlining the need for teams, leagues, and brands to monitor and monetize this massive but traditionally difficult-to-measure platform. The company served stakeholders linked to the NBA, NFL, NHL, MLB, MLS, MMA, college basketball, cycling, and eSports. This has enabled pro teams to better negotiate digital rights with sponsors. Previously, they didn’t have a good read on the value of sports sponsorships from social media channels especially.
⬆️ The Upside: Due to the growing adoption of social media (YouTube and Facebook Live) we believe that AI technologies from companies like GumGum Sports will become increasingly valuable to pro teams, leagues, and brands over time. It will help them better assess the value of sports sponsorships. From a technology standpoint, we also expect AI and computer vision technologies to improve over time and become even more intelligent and accurate.
? Bottom line: Over the years advancements in AI have helped transform the game of sports in so many ways. It has helped better prevent injuries of players, make stadiums and its ticketing and customer care systems more secure. AI has also helped improve and augment the fans experience in a new way while helping teams drive their top line (e.g. online sales) and better assess the value of sports sponsorships. And due to the latest advancements in AI, computer vision, quantum computing, we expect AI to have an even bigger impact on the teams and their stadiums moving forward.