Dramatic changes in the fantasy landscape, including the slowdown of daily fantasy and the rise of legalized gambling, have triggered an explosion of paid subscription products from both newcomers and incumbents.
This year, CBS-owned Sportsline added more than half a dozen new features to its Insiders product, including computer modeling, and gambling picks in a new spate of sports, including golf and the WNBA. NBC Sports’s Rotoworld, which has been publishing fantasy sports news and analysis since 1999, launched a set of proprietary tools for daily fantasy players. ESPN has added a trove of exclusive content to ESPN+ for fantasy players, including exclusive video content inside the ESPN+ app. (Interest in fantasy has powered sponsored content opportunities too: Vox Media announced Thursday that it had built a site for DraftKings.)
“We still think we’re just scratching the surface on the product,” said Jeff Gerttula, evp and gm of CBS Sports Digital, adding that the subscriber base of Sportsline has been growing at a triple digit rate year over year for the past several years (Gerttula would not share specific subscriber totals).
After decades outside the mainstream of sports media, fantasy sports rocketed into the center four years ago, thanks to enormous marketing spends by FanDuel and DraftKings, which were trying to secure a dominant position in the U.S. The two companies spent a combined $500 million on marketing in 2015, according to Eilers & Krejcik Gaming.
While the overall size of the fantasy sports audience is still large — upwards of 60 million in the U.S. and Canada, according to the Fantasy Sports and Gaming Association — that spending has slowed, and the market for daily fantasy seems to have slowed down; consumer spending on daily fantasy sports grew by just a few percentage points in 2018, according to data compiled by the New York State Gaming Commission. But the remaining fantasy sports players have gotten more competitive, hungry for information or tools that can help them beat opponents.
“We’ve not seen daily fantasy slow down,” said Mark Ruzomberka, the director of audience development and business operations for NBC Sports. “I think you’ve got less people playing more.”
That gives sports publishers with an opportunity, combined with an unusual marketing challenge. “In media, every other company is all focused on viral content or word of mouth marketing,” said David Kim, the cofounder of FantasyPros, a fantasy site with over 100,000 subscribers paying a minimum of $2.99 per month for premium content and tools. “In fantasy, it’s, ‘I love you guys, but I am not telling anyone about you!’ Your customers don’t want to lose a competitive edge.”
That requires publishers to lean heavily on their owned and operated properties to market the products. CBS Sports, for example, uses its podcasts, newsletters and inventory on its fantasy gaming platform to promote Sportsline. Sportsline also has a show on CBS Sports HQ, the broadcaster’s growing OTT channel.
It also requires them to develop products very different from most publishers’ core capabilities. Many, for example, offer proprietary algorithms that help daily fantasy players model out athletes’ performance over the course of a season, or projection tools that run through hypothetical seasons thousands of times. Unfamiliar as those might be, most feel that because the audience wants them, they are moving in the right direction.
“It all comes down to audience feedback,” Gerttula said.
Even smaller companies are finding an opportunity to monetize their readers directly. This past spring, a small site called Dynasty Nerds, which focuses on dynasty-style fantasy gaming, launched Nerd Herd, a subscription product offering player rankings, rookie breakdowns, an exclusive, members-only podcast, plus regular merch giveaways, at a cost of either $2.99 per month or $29 per year.
Less than five months later, the Nerd Herd has exceeded expectations, acquiring over 4,000 subscribers without any marketing spending. “We saw it as an initial offering so we could raise funding to do more development,” Dynasty Nerds cofounder Josh Hammond said.
Though some of the products Dynasty Nerds is developing are tools, for now Hammond hopes Nerd Herd can win customers in a different way. “Our strategy, really, is to be entertaining,” Hammond said. “[Other] people are going to be better than us at data.”