January 24th, 2015
Via USAToday, interesting commentary on the growth of fantasy sports among women:
Shortly after she got hooked on daily fantasy sports a few months ago, Laura Wimer noticed a drastic difference in how she watched NFL games.
She watched a lot more games than she previously did. Sometimes she watched several games at once. And she watched them to the end — because she had a little money riding on them.
“It made it more interesting,” Wimer said in a phone interview from Alexandria, Va., where she lives.
For the NFL and other professional sports leagues, this makes Wimer part of an economic Holy Grail for the 21st century. And it’s not just because the leagues need more live viewers to fuel continued growth in broadcast revenue.
It’s also because she’s female.
The NFL’s popularity among American men has nearly peaked at a rate of 70%, compared with about 50% for women, according to Navigate Research, a sports and entertainment marketing research firm.
That means the female market has lots of room for growth — the kind of growth the NFL will need as it seeks to increase its annual revenue from about $10 billion to its stated goal of $25 billion by 2027.
To get there, the future key could be daily fantasy sports, a rapidly growing new industry that many leagues and teams are using as their marketing tool of the digital age.
In exchange for an entry fee, these daily fantasy games give fans the chance to win cash prizes every day depending on the statistical performance of players in real-life games. With money on the line every day, these fans are motivated to watch more live games until the end — boosting the TV viewership numbers that help make the leagues and networks rich.
“It’s changing the way we watch and consume sports in the United States,” industry analyst Adam Krejcik said last week at the Fantasy Sports Trade Association’s winter conference in Las Vegas.
The challenge is getting women to engage. The female daily fantasy sports market is almost non-existent. FanDuel, the industry’s leading company, estimates that its daily participants are 95% male. But if these companies can crack the code — attracting more customers such as Wimer, who plays on DraftKings — their growth would continue to skyrocket, along with revenue for the leagues and networks.
“The female demographic is going to be extremely meaningful for continued and sustained growth, not just on a company level, but for the leagues,” said Femi Wasserman, vice president of communications for DraftKings.
MONEY AND FRIENDS
Wimer once tried to play traditional fantasy sports but didn’t like it.
Unlike the budding new industry of daily fantasy sports, traditional fantasy sports date back several decades, when results were computed with calculators and sent by mail. To play in traditional leagues, participants generally draft a team of real-life players before the season and then manage that team until season’s end, when they hope their team has put up enough statistics to win prizes.
“It was a long-term commitment,” Wimer told USA TODAY Sports. “I’m just not interested in that. That’s why DraftKings is interesting. It’s literally just a one-day thing.”
The rise of the Internet and mobile phones drastically accelerated fantasy transactions in recent years. Instead of assembling fantasy contests once a season, technology allowed participants to play — and win money — every day based on that day’s statistics.
Making it even easier, fans generally just need to open an online account, make a deposit and download an iPhone application.
That’s what helped hook Wimer, whose husband and son introduced her to it. “It’s really simple,” she said.
After putting down an initial deposit of $25, she said she has never had to add money. One week, she won $55. Likewise, Nisha Mannath, a female student at New York University, said she plays for about $10 on FanDuel after being introduced to it by her fiancé.
Cash prizes can range from small amounts such as this to millions of dollars.
But it’s not so much about the money. The social aspect of competing with family and friends also appeals to them. Before she got her female friends involved with FanDuel, Mannath said they were “lighter sports fans.” Now they’re more interested and have another reason to stay in touch with each other.
“Almost all of them have a team they root for,” Mannath said. “But this gets them a little more involved with what’s going on beyond the team they typically root for.”
And that’s why the sports leagues love it, too. In November, the NBA announced it had become an equity investor in FanDuel. DraftKings has partnerships with Major League Baseball, the NHL and five NFL teams. USA TODAY Sports also launched a daily fantasy game in 2014, FantasyScore.
“Fantasy games, which have been around a long time, have been a pretty significant catalyst in driving interest,” said Sal LaRocca, the NBA’s president of global operations and merchandising. “We think daily fantasy is certainly the next evolution of fantasy gaming and will continue to do just that.”
Compared to traditional fantasy sports, daily fantasy sports offer faster money with more frequent games, intensifying daily viewership in much the same way as sports gambling, which is largely illegal or unregulated outside of Nevada. Paid fantasy sports games are legal under federal law.
Krejcik predicted that FanDuel would begin publicly trading on NASDAQ by 2016, with a valuation of $2 billion. Last year, FanDuel had nearly $60 million in revenues.
Krejcik also predicted entry fees on daily fantasy sports would surpass the amount of sports wagers in Nevada by 2016 (about $4 billion) and would rise to about $16 billion by 2020, which might compare favorably with the NFL’s revenues at that point.
“Another huge thing is how you attract female players,” said Krejcik of Eilers Research, a gaming industry research firm. “It’s this tiny percentage now. If you have that answer, if you can figure out how to cater toward female players, that’s a huge money opportunity.”
‘BEYOND WHITE GUYS’
Krejcik made his predictions last week at a Las Vegas hotel casino ballroom filled with industry insiders, nearly all of whom were young or middle-aged white men.
The relative absence of women and minorities in the fantasy sports industry has been so conspicuous that it even earned its own presentation at the conference, titled “Beyond White Guys.”
It’s too “time-consuming,” a “waste of time” and “Dungeons & Dragons for jocks,” survey respondents said in research conducted by Brody Ruihley and Heidi Grappendorf of the University of Cincinnati.
Gender roles and perceptions also played factors, because women were perceived as having less time than men for such hobbies.
On the other hand, their research found that 40% of women had an interest in it.
“Half the battle is just getting people interested,” Ruihley told the conference.
So what’s keeping women from engaging more?
“I don’t feel that these companies have actively tried to market to women,” Ruihley told USA TODAY Sports. “Sure, women can be recruited through the current channels and advertising, but I don’t think there has been any specific campaigns directly geared toward women sport fans.”
That is expected to change with the rise of daily fantasy sports. DraftKings and FanDuel are start-up companies that have combined for about 96% of the market share. Their industry is so new that they’re focused on all growth, not just women, and market to sports fans in general.
Eventually, their easy-to-use phone apps, smaller time investment and daily social interaction might help them appeal to a broader audience — the kind of audience the NFL needs as part of its plan to build on its formidable appeal to advertisers and broadcast companies.
NFL regular-season games in 2014 averaged about 17.6 million viewers on broadcast and cable, including about 6 million women (34%), according to Nielsen.
Wimer, who sees fantasy sports as affordable entertainment that allows her to have fun online with friends and family, also considers herself an example of its potential.
“If more women got introduced to it, I think they would find it a lot more interesting,” Wimer said.
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