Startups Winning with March Madness (swish).
This is a follow up article to the piece from last week on the Big Business of March Madness. If you haven’t read it, you can click here.
This week we are exploring the savvy young companies making a profit during the most holy of college basketball months.
We surveyed the leading startups in the fields of VR, ticketing, livestream, and fantasy sports. Enjoy!
Virtual Reality
VR booths are popping up everywhere. It makes sense for festivals, conferences, and basically anything that creates a huge crowd. Hence, a perfect fit for March Madness. While it may be a solo experience for now, soon fans can sit court side with their friends to watch the games.
Here are three specific companies benefitting from March Madness.
EON Sports VR teamed up with the Atlantic Coast Conference to show games for their conference tournament, a build-up to March Madness, at the Barclays Center in Brooklyn. Fans could watch with the ACC VR app for iOS and Google Play, with or without a VR headset.
ACC Commissioner John Swofford:
"The ACC continues to look at ways to provide fans with unique experiences, and ACC VR is an innovation that allows our content to be showcased in a new way,"
This was the second year the Big East showed its tournament in VR. Their broadcast partner, Fox Sports teamed up with LiveLike. They broadcast the games from Madison Square Garden in New York City on the Fox Sports VR app.
A third player in the VR space is Dallas based Escalation Studios that allows viewers to watch March Madness with Oculus and Gear VR. It also provides on-demand video highlights.
Tickets
Tickets are going to be a hot commodity for any games throughout the country. The question is which ticketing sites are making money?
Aside from giants like the eBay-owned StubHub there are a couple startups, SeatGeek and Gametime, competing in the field.
While it’s pretty unclear how Stubhub generates most of its revenue, hopefully these two articles can shine some light on the topic.
SeatGeek is a ticket search engine that aggregates tickets from TicketsNow, TicketNetwork, Ticket Exchange, RazorGator, TicketCity, ViaGoGo, Empire Tickets, and eBay. They went online in 2009 and launched their first mobile app in 2012. Over 40% of their transactions occur on their mobile app. SeatGeek is a play by Accel Partners, who led SG's most recent $35 million Series B funding.
Gametime is another mobile ticketing app for last minute tickets. Gametime does the same thing and allows users to book discounted tickets for sporting events. One difference is that once purchased, the ticket is displayed on the phone itself, so no printing is required. Accel Partners also led their last financing round of $4 million.
The round included participation from Jeff Mallett, a principal partner of the San Francisco Giants. HotelTonight co-founders Sam Shank and Jared Simon, Box founder Aaron Levie, and StubHub founding executive Colin Evans.
Streaming
CBS and Turner, the goliaths who own the NCAA rights announced they will provide fans live streaming access across 15 different platforms—including Amazon's Alexa and Fire, Xbox, and Roku. This allows fans to catch more games than ever.
The unique deal between Turner and CBS, wherein the two broadcasting giants teamed up for the NCAA Tournament, is covered in depth here. The deal started in 2008 and has been extended to the year 2032.
Turner’s iStreamPlanet, a Nevada startup acquired on August 17, 2015, will provide the live streaming infrastructure for all March Madness games for the first time this year. iStreamPlanet offers cloud-based video-workflow products and services for live events and linear streaming channels.
Fantasy, Betting and Gambling Apps
ESPN, CBS, and Yahoo all host free NCAA Tournament pools. In conjunction with major corporate sponsors like Allstate, Honda and Microsoft, and Infinity to name a few.
In addition to the 'Big Three,' there are many other contests involving the Big Dance. The legality of these contests depends upon their states of operation and game formats.
One interesting startup in the space is Chapel Hill’s Sideline Fantasy Sports. The company just launched a game specifically for March Madness with up to $10,000 in cash prizes.
According to cofounder Tyler Eshraghi, "[w]e wanted to change the way people play fantasy,”
Eshraghi and his partner were part of StartUp-UNC (formerly Launching the Venture).
In a lesson for all startups Eshraghi says,
“We had no intention of doing basketball this year, but saw the opportunity and seized it.”
Leading daily fantasy sports operators, DraftKings and FanDuel, are completely out of college sports in general and specifically out of the March Madness this year as part of a deal with the NCAA.
The voluntary decision by DraftKings and FanDuel came last year after months of discussions between the daily fantasy sites, the NCAA, and various state legislatures.
One reason they were willing to let this one go is because college sports represent such a small part of their revenue. For FanDuel it only accounts for 3%. At DraftKings, the NFL daily fantasy market is 10 to 20 times larger than the college football market.
Enjoy the games this year and if you enjoyed this article please share.
This article was written by Curtis Roberts, an attorney at The Founder's Attorney.
If you have any questions or suggestions please send them to curtis@foundersattorney.com.
This article would not have been possible without contributing writer Richard Chen.
You can see Richard's LinkedIn page here.
Resources
https://wallethub.com/blog/march-madness-statistics/11016/
VR
http://eonsportsvr.com/
https://www.cnet.com/news/college-basketball-acc-big-east-virtual-reality-vr/
http://www.escalation.com/project/ncaa-march-madness-live-vr
Seating/ Ticketing
https://seatgeek.com/tba/articles/how-does-seatgeek-make-money/
https://blog.tickpick.com/stubhub-buyer-seller-fees/
https://www.wsj.com/articles/stubhub-ebays-ticket-to-growth-1476819994
http://www.foxbusiness.com/features/2014/09/23/last-minute-tickets-app-gametime-scores-4m.html
Streaming
http://www.cnbc.com/2017/03/10/march-madness-is-everywhere-this-year-and-you-may-not-need-a-television-to-see-a-game.html
http://www.sbnation.com/college-basketball/2016/4/12/11415764/ncaa-tournament-tv-broadcast-rights-money-payout-cbs-turner
http://www.istreamplanet.com/
Betting/ Gambling
http://www.espn.com/chalk/story/_/id/15104454/draftkings-fanduel-stop-offering-college-fantasy-games
Fantasy
https://www.exitevent.com/2017/03/march-madness-is-here-and-so-is-the-chance-to-win-by-supporting-this-chapel-hill-fantasy-sports-startup/