ESPN Takes F1 Checkered Flag for $225M+, Smart UA for Creator Tools, and Meta’s Fashion Marketplace

July 1, 2022 by  wearerockwater

What We’re Reading

3 articles + RockWater analysis to make you a better investor and operator.

———

ESPN Scores U.S. Formula 1 Media Rights
Front Office Sports, 6.27.2022

The RockWater Take by Alex Zirin

After much speculation about a potential new home for Formula 1 on US TV, ESPN will reportedly retain the rights.

The deal secures ESPN’s right to broadcast the sport domestically for three years, and is valued between $225-270 million, or $75-90 million / year. In comparison, ESPN’s current deal (signed in 2019) was worth just $5 million per year.

For that 15-17x increase, Formula 1 has just one company to thank.

As has been well documented, Netflix’s Drive to Survive has catapulted Formula 1, and its driver personalities, into the mainstream of US sports and pop culture.

Rumors have circulated about Netflix’s desire to bring live sports to their platform, and this year seemed like the opportune time with MLS, Sunday Ticket, and F1 all up for grabs.

As rights conversations began to take place, many speculated that Netflix would spend considerable content budget to become the 360-degree hub for Formula 1 in the US.

Given the need for innovation in both their subscriber model and content offerings, Formula 1 seemed like a perfect first foray into live content.

Between Apple’s $2.5 billion MLS deal, ESPN snatching up Formula 1, and the omission of Netflix as a participant (Amazon, Apple & Disney / ESPN have reportedly placed bids) in the Sunday Ticket bidding war, it seems more likely that they have moved away from live sports in the near-term.

What do you think about this decision? Personally, I expected Netflix to take the live-sports leap, but I’m excited to see how they innovate in other ways.

 

———

Highlights from Various Founder and Exec Convos + Readings on Creator Tools

The RockWater Take by Chris Erwin

I’m talking to an increasing amount of founders who want rapid traction on their new creator tools apps. My advice…

🏗️ If you build it, they won’t come. Great tech and engineering doesn’t guarantee a viral app or adoption. Edge cases exist (#Vine, #Yo, #FaceApp) but I wouldn’t build or fund a company with that assumption.

🧐 Focus on a niche set of creators to start. Laser in on their needs, talk to them, and delight them. Let them guide you. Create great case studies. Then expand to other creator verticals. Whatnot used this playbook. If you go for a big splash with big paychecks to top-tier talent, have fun competing against YouTube, Amazon, Facebook, et al

🧑‍🤝‍🧑 Budget for a partnerships team. Depending on who you’re targeting (types of personalities, brands, retailers), you’ll need headcount dedicated to recruitment, onboarding, and partner success. And who have existing relationships and partner expertise. And Mr / Ms CEO, get your sales hat ready.

🗣️ You need smart creator partnership marketing. Paid and unpaid. Cause your partnership team 👆 will need help driving inbound leads at scale. And mind that paid spend ramp, UA costs up nearly 4-5x YoY.

🤼 Build growth into the product. Enable creators and fans to get rewarded by recruiting their peers to the platform. Think referral programs and better product experiences via group participation. Like Pinduoduo and CASHDROP.

🔢 Extend your adoption timeline and unit economics. It’s going to take longer, and be more expensive, than you think.

BTW our RockWater team can help you be smarter here and avoid these pitfalls, here’s how.

 

———

Meta’s New Digital Fashion Marketplace Will Sell Prada, Balenciaga and Thom Browne
Vogue Business 6.17.2022

The RockWater Take by Michael Booth

Digital fashion is coming to a social platform near you!

Meta’s big announcement continues to build on the tremendous momentum digital fashion accrued during the pandemic.

Personal interactions are increasingly happening in virtual spaces (especially for younger generations), and tools that let one authentically represent themselves in said virtual spaces are inherently valuable.

🚨 Did you know one-fifth of Roblox players update their avatars daily, purely for self-expression?

A few stats other Roblox stats:

👥 200 million est. MAUs, over 50 million est. DAUs

⌚ Daily active users spend 156 Minutes per day on the platform

💰 $308 million of in-platform user spending in Q3 2020

🌱 54% of Roblox users are under age 12

Digital fashion represents a lucrative channel for fashion brands to add high margin incremental revenue, while building #GenZ market share.

I estimated that Gucci’s 3 week pop-up in Roblox last year generated $10 million in topline revenue over 2 million purchases. Impressive!

Expect to see more fashion brands dipping their toes in the digital waters soon. So far only a few brands have participated, but Kering’s portfolio have been making the biggest moves, and they tend to be the most forward thinking.

An exciting sign of things to come!

 

———

If these insights are relevant to projects you are thinking through, ping us here. We’re always excited to riff through ideas!

Related Posts

Get RockWater's deal news and insights for the media, agency, and creator economies.