UP491 'Don't use AI to replace thinking'

22:27Arvind Iyengar:But how do you then start to create experiences that are memorable, that are easy for fans to consume how do you build products whether it's inside a stadium whether it's at a product or what we do on digital which are taking into account some of these factors to make it a seamless experience do you the the world that you painted that you know and we're all on every sport is on that journey from well not all of them actually there's going to be a few big sports that we're going to be fine and it will retain a broadcast rights model because there is a demand for there you know and that'll happen um you get to the existential question about where the money is going to come from and are they you know if you're not the nba just signed a you know enormous 10-year rights deal what are you going to do where is that can you monetize those digital fans who are consuming grazing but it's a different relationship they're not paying for anything all of those questions that have been you know haunting the sports market for a long you know a while what's going to happen?

23:28How does the money, where does the money go? Is it just going to be a massive cataclysmic sort of music industry collapse, where the money just disappears, and a different model appears, but it's a completely different economy. And it's, you know, you'll get to a big get bigger model, winner takes all type model across different sports. And we're seeing that already. But what's your sort of view on that in terms of the monetization question?

23:54Arvind Iyengar:so I think there's again few angles to that right I think one is if you build the right product they will come right and so again sports movie reference Field of Dreams but if you manage to create something for the audience very underrated by the way Field of Dreams it is underrated yeah yeah so we can do maybe at the end of this we can do best sports movies of all time yeah yeah but it wouldn't crack my top five but it's good do you want to know my rule my rule is if I know the more I know the sport the less I like the film it's really hard to me to watch a football, a cricket film or a golf film, but I can watch a baseball film because I don't know much about it.

24:30So Field of Dreams is, I like Field of Dreams, but because the stupidity of the baseball scenes won't get in the way of my enjoyment.

24:37Arvind Iyengar:That makes a lot of sense. Ted Lasso, I just can't watch it because the football... It's not realistic. It's just, it becomes silly at that point. Understood. That, by the way, is a great show, just because of the kind of character it is. Yeah, I know, I know. But as I think, just coming back to it, I think the The real question is, how do you figure out the right audience for your sport? And so not everyone's going to be an NBA, not everyone's going to be Formula One, not everyone's going to be IPL in cricket. But you look at Kapaddi in cricket or you look at surfing in the US with World Surf League or you look at what Flow Sports has done with amateur wrestling.

25:12Arvind Iyengar:There are audiences for several sports. The key is to crack into your core audience and then serve them in the most meaningful way. And that I think is step one of being able to build that audience data, know how to target, serve the right content. And I think the future is not necessarily a winner takes all. I think the future is probably a suite of being able to offer the right content to the right fan. and going even further to say, Richard, if you go into something that's sport, it shouldn't, like, for example, if you're watching sports movies, there should be enough intelligence picked up that it shouldn't recommend Ted Lasso to you or it shouldn't recommend a football-based portrait to you.

25:56Arvind Iyengar:It should recommend field of dreams. For me, it might have a different algorithm. And so what I see is different from what you see. And you're getting to that degree of hyper-personalization, right? And so how do you get to that degree of one-on-one personalization over time Today, it should still be not one-to-one, but one-to-smaller manis versus a one-to-all that existed years ago. And so once you start to create that, fans are being like, oh, this is something that is relevant to me, that is unique to me, and that I might be willing to pay for. And at the same time, brands and sponsors are getting smarter.

26:27Arvind Iyengar:Right soldiers are getting smarter. And so as this world is getting sharper, and sport is sometimes a few steps behind an industry like e-com, where things like first-party data have been around for years, right? because that's the core of the business. But as brands are getting smarter, as everyone's getting smarter, they're going to ask you for targeted information. And so no longer is a vanity metric of I had 5 million people watch this and it's great versus I had 50 ,000 people who are coming back every day and who are going to spend 15 minutes on the platform and are going to fit this demographic profile.

27:04Arvind Iyengar:They're perfect for you, SponsorX. that is going to be the thing that unlocks revenue in a meaningful way and you need to be smart enough to get to that point where you've got all that intelligence. So it's a sponsorship answer. So that's the answer with sponsorship. I think it'll also get that way with broadcasting. It'll get that way with digital rights. You'll get to smaller and smaller feeds. You can start to break up those rights in many meaningful ways versus that big broadcast deal. And then if you start to send fans what they want, that's the DTC answer because people will then start paying for a subscription saying, oh, this is relevant for me.

27:35Arvind Iyengar:right squash for instance gets a lot of people coming in buying that package even if it's not got a lot of tv ads because there are a lot of ardent sports fans and they're figuring out how to get to them in a meaningful way so you unlock d2c you unlock sponsorship you start to unlock newer new streams of advertising and media rights as well as you start to create different cohorting and so you suddenly have essentially a new paradigm of revenue streams which is not relevant on one single broadcast rights are going to come and save the day but multiple streams the big rights holders will could survive anyway on the back of broadcast deals and then some but the mid and smaller ones are going to have to figure out how to unlock all these streams in a meaningful way and the ones that do it will survive and thrive and the ones that don't will perish so it's not as cataclysmic as music where everything falls down after Napster and rights and everything after that.

28:29Arvind Iyengar:But it is one where folks who don't adapt will perish because they've not done the right service for their sport. Let's just take that then, because your Sports Interactive, I see in the middle of this marketplace. So you've got the rights holders on one side, you've got the fans on the other, and you're one of the companies that is sort of right, you know, between those in various guises. And so I'm, this is, let's just play around with that for a minute. Because if you, if we say, right, let's just think about the Premier League, UEFA, NBA is of this world. The 10-year plan then is, okay, we've got enough money to do this.

29:00We're going to invest a lot of money in becoming, you know, where would we put our money? Because I can see a sort of mission creep into areas that are potentially lucrative, but third parties at the moment are taking the money. So it could be, you know, one of the obvious ones is OTT broadcasting, where you say, right, okay, the Premier League, it probably will develop a D to C broadcast element in certain parts of the world where they've got, you know, they can experiment. They're not going to do it when Sky is still paying them a few billion quid or NBC, but there are areas where you can sort of start to see a different model.

29:38So there's broadcast. There's other areas like betting. I quite often think is actually, there's a whole load of companies that are taking money out of the sports economy that if I was a rights holder, I think actually could we keep some of that the retail bit is another thing so again could we become better at doing that so we are the rights holder the body gets bigger and starts to encroach and starts to compete with companies like yourself so you know in terms of that mark rather than paying you as a server service provider they might say well actually could we do what sports interactive do what do you think about that scenario you've got a probably you probably have to be a certain size of rights holder to be able to think about that.

30:19So it's not a squeezed middle question, but it's a sort of probably a more top end question.

30:24Arvind Iyengar:No, I think that's a fair question. What do rights holders need to do first of all? They need to make sure they've got the best product out there from a support perspective. That needs to come before everything else. So invest in making sure it's scalable, it's a right formative game. So the product is going to talk about everything else. Then as we talk about this particular digital ecosystem, if I was a rights holder, I'd say the two things to invest in our own digital asset maturity, right? And so what do I have that's directly fan-facing so that who knows where third-party platforms are going to go, who knows where the third-party pieces are going to end up, but do I have more control of my assets?

30:59Arvind Iyengar:And then am I investing in fan intelligence, right? How well do I know my fan? It's one thing to say I've got 2 million fans, it's another to say this is what each and every one of them are. So I would invest in that. The question then is what are those that you build in-house and what are those where you rely on folks who've got expertise to have done this and this is the only thing that they've been doing and have been doing it for leagues across the world and and therefore can I rely on that expertise right it's a bit like saying well should every company build their own crm or should they go to salesforce or does everyone need to build their own id infrastructure should they go to oracle or sap right and at some level you've got the specialists and so you want to tap into the expertise because oracle is going to paint you a picture of the world five years from now that you yourself may not be able to imagine because that is their bread and butter.

31:45Arvind Iyengar:But then you apply your expertise to customize it to your unique needs because then you're saying, well, this is the core infrastructure, but I actually know a lot more about the Premier League or I want to have a little bit more control of my destiny with this. And so the really big ones, instead of building from scratch, would then work with someone to say, here's what that needs to look like over the next few years. And I will have a lot of input into it. And there are pieces of it that I can carve out that are unique to me, but I'll still leverage the overall expertise because doing all of it from scratch is like reinventing the wheel, right?

32:17Arvind Iyengar:And it's similar to what Premier League just announced their partnership with Microsoft, Copilot and everything that they're going to try to build out over the next few years. What did you think about that announcement? What was your, I mean, my thought, I wrote about this on our sub-slack yesterday, was there's a, I can see how these things work. That's just whether or not there is a long-term, short-term question about whether the work that you've identified at the beginning about, you know, the transformational change digital tech ai fits a sponsorship framing because they've gone from oracle to microsoft and does that matter in terms of if you are in vet if you go okay we're going to go with microsoft for the next 10 years but what we're actually what's actually happening is that they frame that as a sponsorship relationship which is by definition we'll have a term end and then there might be another change and we saw something similar happen around blockchain and you know people jumping in with blockchain partnerships so sport tends to take a new thing and want to package it as a sponsorship so i think the benefit the benefit with sport is you can and this has happened all the time there's blockchain before that there were it services before that there's gaming solutions before that there's something else there's always an opportunity to say hey actually look at this as a sponsorship play and then it's kind of a quid pro quo so you come in as a sponsor but you also do the transformation at the back end and so you're essentially getting someone to if we're doing the transformation and so it kind of nets off right and then with in the blockchain world with everyone looking to make a splash they were more and with you know a bit of fundraising done in there they were like yeah we're happy to block a bit of money and this gives us a bit of yeah some credibility and we get the sponsorship and so everyone's like yeah i'll take the money right so it's an unfair analogy for the premier league microsoft deal is is i'm not saying it's the same as that yeah you can start to see that there is a principle there that that could be but i think this to me is slightly different in that to me blockchain and everything that was there was a bit of a fad right and with the benefit of hindsight you can say that now but it's an area we stayed away from because well the core tenants of blockchain etc are still critical and important i think everything that everyone was trying to do with nfts and trying to create a whole new world of assets that were unclear if they had any real value clearly felt like a bubble.

34:30Arvind Iyengar:AI adoption is not a bubble, right? It is here to stay. It is the way of the future. You need to adapt one way or the other, or you're going to get left behind. I think there's no question about that. That has been proven. And so what the Premier League is doing with this is essentially saying, we want to get ahead of it. We want to partner with someone that is going to help us on this journey. And so in that sense, I think it's the right kind of moves that organizations should be making as they look to build out. Now, who should they be partnering with is also a bit of a question where you can get the technology, but you also need the sport expertise.

35:02Arvind Iyengar:So how do you bring both of those in? And if you're a large team like the Premier League, you can bring in the sport expertise. Whereas if you're a small or a mid-tier league, you'd want someone who's also able to bring that in together. But overall, I think it's a sensible thing when you start to look at what that transformation needs to look like and how you build it out over a few years. With any of these organizations, sometimes it's down to then how it actually gets implemented. because in many organizations, which you'll see in sport, this always gets political and then it's kind of, who's doing this?

35:29Arvind Iyengar:And then sometimes we've seen in certain orgs, you know, they've done five different digital transformations at the same time. So then they've got someone that's doing a single sign-on, someone else that's doing their digital assets, someone else that's doing a CRM, someone else that's doing a CDP. And then all these things are not talking to each other and everyone is like, digital transformation, yay, yay. And then you look at it, it's like, what? This is just a mess you've ended up with. Get McKinsey in. there you go who else is going to come and fix the entire problem i don't want to say good money after bad it might be bad money after bad but whatever the case may be i think the important thing therefore is having the vision up front of knowing how these pieces need to fit together with the recognition that it's dynamic and moving and so you need to assess every six months to see if it's all coming in versus sometimes doing it in disparate parts and then you're like these are five pieces of a jigsaw puzzle but they're different puzzles yeah i think it's sort of interesting because there's also the the question about backing the right horse in terms of the tech and you know in particular in ai every week there's a new thing you mentioned you know google gemini well it was six months ago google was sort of asleep at the wheel they're they're chasing and now it's you get these new things that are coming out which again is frothy so you can't just be responding on a week you know month by month basis so you need certainty but it's really interesting but just to jump in there i think the point there then is to make sure you're building your systems to cater to the fact that this is a world that's going to change every six months right so don't like if you're building something on lm don't tie yourself into one thing have the ability to say we built this on this structure but today we can then take this out and put this somewhere else and it works just as well right it's almost like being agnostic to the fundamental layers on which everything works but the programming language sits separately yeah so that as and by the way everything is going to get faster everything is going to get cheaper computing power is going to increase that's just the way it's trending right we've all heard of moore's law this is like moore's law on steroids right now right and so it's all going to just move at a speed that no one is going to be able to fathom right a year ago someone was in there telling us we'll build you a custom llm today you can just do that on a gbt4 or you can do that somewhere else right so i think making sure you're building out with the flexibility so it's an easy take out and plug in somewhere else is going to be critical um for the future when so let's talk about the sort of there's a lot of cliches about the America, Europe, we're quite often running through this podcast, people, we talk about Europe and America in terms of the sports model and the economy.

37:56And you've got one is open and chaotic. The other one is closed and sort of boring. No, I'm kidding. Which one was which again? Yeah, yeah, yeah. So you've got a sort of franchise model. And then you've got all these new, you know, sports saying, well, we need to be a bit more like the Americans. We need to have structure. We need to have certainty. This is the investors are usually saying this, not the fans and the american investors about yes and then you've got there's a question here about what the indian markets you've got your you know you started as an indian company and now a global company i know you're working with rights holders in the states and in europe so just talk to me about what the difference is that you find from your lens because again we don't often say what about india and what the difference is there and what you found when you you're coming into europe in a big way now.

38:44What do you see and what are the, is it cultural differences? Is it actual sort of how business is done, decisions? What do you think?

38:53Arvind Iyengar:I mean, probably need a couple of hours to unpackage all the differences, especially on the cultural aspect. But on sport, look, we look at these markets in many different ways, right? Everyone, you're super familiar with Europe and how that works and likewise with the US. And I do think the US is ahead in terms of how it's thinking about digital in a meaningful way. I think they've been faster to move on from kind of the local and match day to global and everyday, which is I think the mantra folks need to adopt as they really expand. It's not just who's playing today and how do I get bums on seats.

39:28Arvind Iyengar:It's who are the millions of people and an audience that I have all around the world. You've got Man United fans in Indonesia and the Philippines and how do you cater to those. And so I think the US has done a good job adapting to that And that market itself works quite differently. India is very unique, right? India has got the benefit of scale like none other. And when I say that, usually when we're in meetings, I'm talking about some of the things we've delivered, right? And so we're like, oh, India has 900 million monthly active cell phone users, right? Mobile users. And people are like, 900 million?

39:59That's a lot.

39:59Arvind Iyengar:We're like, oh, we worked with the Kabaddi League and they had, you know, 200 million people tune into the broadcast for this season. People like fall off their chairs, right? Because you've got that benefit of scale. India, I think, has done a bit of a leapfrog on a lot of technology pieces, right? You look at the highest concurrent usage viewers for a single sports event. The IPL was the first to pass, you know, the Red Bull Space Jump and everything else going past 10 million or 20 million and more, right? And being able to handle that scale on technology is unprecedented. You've had an entire generation of folks just kind of leapfrog from like 3G to 5G and then just get super adept at using the phone as their first portion of content.

40:37Arvind Iyengar:And then India's got all these regional languages, but there's also been this element of video first. There's a statement I once heard that video is the new English. And so you don't really need to care about language. You just get video out and it works well. And now with the air, I told you about translations, transcriptions, real-time adaptations, etc. And so I think there have been a lot of leaps when you just start to look at the scale of numbers on technology. When you start to look at the IPL, the Indian Premier League, the biggest cricket property out there, I mean, you look at the rights, right?

41:08Arvind Iyengar:2 billion plus for a five-year deal on TV rights and, you know, 2 billion plus on digital rights, right? Call it two and a half to three each, roughly based on your conversion rates. And that's for a 74-match league that's running for two months in a year, right? On a per-match basis, that's somewhere from 10 to 15 million, depending on whether you add everything up for a single match. That's more than any other league in the world other than the NFL, right? Which is probably closer to 30-plus. Premier League, for context, it's maybe 10, 11 million per match. So it's got fewer matches, but just what it's achieved in terms of those rights numbers.

41:40Arvind Iyengar:And then you look at franchise valuations, right? CVC came and bought in a team, sold now. The Gujarat team, 900 million valuation. Top teams are worth a billion plus. It's a league that didn't exist, you know, 20 years ago. And it's already up at these numbers. And that I think, and it's running for two months in a year. It's not eight months like the NBA. It's not like the Premier League. And so I think the numbers are staggering. At the same time, I think it's a different market when you start to think about monetization, right? So when I worked at ESPN many years ago, most markets were revenue was 80 % subscription, 20 % advertising, right?

42:18Arvind Iyengar:That's typically how TV worked, right? I mean, you look at the US back in the day for every whatever, KongPass subscription, four or five dollars of that was attributed to ESPN. India was the reverse, right? 80 % was advertising, 20 % was subscription because consumers didn't pay for as much. And so you have to rely on, there's this massive scale and I'm doing advertising. Now that's changing, right? Higher disposable income, India's doing well, GDP growth. You're going to have more and more spend. And as it's that classic, as you move up the income pyramid, more discretionary income will go towards things like sport and art, et cetera.

42:47Arvind Iyengar:But you need to think about the economics very differently, right? And then you look at a company like Dreamleaven, which is daily fantasy sports, biggest in the world. you know, India's a market where betting is in big. That's another piece that's different, right? It's kind of where the US was before, you know, became the wild, wild best and betting became legal. I mean, Dream 11, if betting ever became legal, would be one of the largest sports books in the world, right? But they're very focused on, they've done a phenomenal job building this great daily fantasy game with the scale that is there in India.

43:17Arvind Iyengar:And so you're seeing, you know, you have IPL success, you've got tech jumps, you've got, you know, companies like Jio Hotside investing like crazy and actually taking that broadcast experience to the next level. You have in-play gaming, which no one else had done before at the scale they did. So I think you're seeing a lot of technology innovation, but with folks having to adapt and recognize it's a different business model. The other difference in India is just the speed of doing business, right? So we might get RFPs from an Indian sports organization and a European sports organization. A European sports organization is, yeah, we're looking to build for next season.

43:52Arvind Iyengar:And so we're like in May and you mean next season is June, July next year. It's got 13, 14 months starting to build this out. Some of our Indian plans, not all the large ones, but some will say, yeah, we're looking to build for next season. And it's like, oh, it's May, you're looking for June next year. No, no, no, June this year. You have a month to build this out. So just the speed of just trying to put this all together is next level. But I think as a result, if you can build a successful business in India, it's actually much easier than trying to do that sometimes in other parts of the world where you're thinking through this and building with the benefit of time.

44:24Arvind Iyengar:And then, of course, there are the cultural nuances and everything else in all these markets. Yeah, you know, absolutely. And it's interesting because obviously the IPL is based on the American model, isn't it, to a large extent? That's what Modi was, you know, an IMG at the beginning. That was the framing. It was going to be the franchise model, clothes league, et cetera. Franchise model, no relegation promotion. Expand franchises all the way, play each other home in a way. Like, yeah, I think that that was very clearly the model they looked at. Yeah. And salary caps, we can talk about that as well.

44:56Arvind Iyengar:US has a bunch of that. Dream 11, I think, is fascinating because quite often you see there are lots of parallels between the IPL and the NFL and the American market and betting. Because I quite often think that betting is actually very underrated in terms of, like you mentioned CVC. I think private equity's view of the sports market, betting is much higher up on the agenda than we sometimes think. And I wonder if, I know India's a particular market, but there is a, what role betting plays in the money replacement question in terms of the way in which, if the broadcast money goes away, the traditional linear rights market goes away, what role will the betting firms want to play and how will they monetize that space?

45:39Arvind Iyengar:I mean, for a long time, they've already been playing a lot of that role, right? If you start to think about... Well, it's sort of, there's a, sorry, but there is a, they sort of pay a tax via sponsorship or they put, you know, there are ways of doing it. But I'm wondering if there is a more fundamental relationship that is going to evolve between sports and betting. So I'll answer that in two lengths. When I first came on board to run Sports Interactive, I looked at the different markets, right? And we said, oh, we can serve with data, right? That was a big part of what we were doing back then.

46:08Arvind Iyengar:So sports data, we can use this analytics, we can do some cool stuff with it. We can help sports teams, right? like Billy Beans, Sabermetrics, that sounds really cool. And you look at the largest sports analytics companies in the world that are serving teams, 20 million, 30 million, 40 million, top line, maybe. You kind of cap out at some of those levels. And that's because that market is not as big as people think it is. It looks really cool, shiny, sexy on the outside. You can make a nice movie about it. But as you get better and better at it, teams will want to keep that in-house. Because why do I want to share this with someone else?

46:40Arvind Iyengar:So that's something teams will absolutely keep in-house because it's not like infrastructure. It's not like everything else. When it comes to actual talent recognition, scouting, so you'll only get that far, right? We were in the next space, which is media, right? Which is then working in this fan engagement space, rights holders, broadcasters. And you look at the top companies there. Now it's 100 million, 200 million. Back then, I'm talking about stats of the world, et cetera, the performance of the world. And then you start to look at the media businesses, 300 million, 400 million, et cetera, right?

47:10Arvind Iyengar:I'm talking about top lines, valuations are a little higher. And then you look at betting. And so media is already an order of magnitude about the team or the pro market. Betting is an order of magnitude about media because there's just so much that goes into sports books and everything else. Now, it's an area we've stayed away from because in India, betting is not legal. And so it's not an area we focus on. But as you look at Europe and you look at the growth that's happened in the US, it was with this big betting boom. right and so at some level there is a those markets and tam suggest you know this could be a 50 billion dollar market right and so there's there's a lot there um now what does that role play in sport you've talked about sponsorship historically you've talked about money comes in in many different ways and so there there are ways in which you can do sponsorship you can do rights you can figure out betting rights that people had sold for a long time dealer rights around betting etc etc but i think smarter leagues are saying hey we actually want a stake in this right so we can either regulate it and then charge license fees to do it, or we can have stakes in these businesses and then share in the upside, or we can get a share of the fee and we get our cut for doing the official rights.

48:15Arvind Iyengar:And so I think there are ways in which that betting revenue can get unlocked in meaningful ways. Similarly, when you start to think about streaming and everything else, there may be an audience for the mass streaming, but then you can have sub audiences for betting rights and betting streaming. And that's another piece where essentially your same TV rights have their own set of betting rights. So I think there are huge ways in which it's already happening and will continue to play a part. The big part with all of this sometimes comes down to, you know, what's the right regulation? There's a bit of an ethical, moral question on doing it the right way.

48:45Arvind Iyengar:You want to make sure you're doing it in a responsible way. You have the right safeguards. We've seen examples of places where they didn't have the right safeguards and people are then gambling away their life earnings. And you've had places where you've got the right KYC and the right safeguards. And so, you know, I think it can unlock a lot of value, but from a personal perspective, it needs to be done the right way. Yeah, no, I completely agree. And it's fascinating. And one of the things, it was interesting, we had, so we had Gareth Borgon from Two Circles, and they did their IP league, you know, they ranked, and they counted the money, essentially.

49:18And there's a couple of things. One is that, so that's everything, media rights, sponsorship, Yeah, merchandise. And you've got the usual sort of acronyms, NFL, Premier League up there, you've got IPL. But one of the things, so in the top 10 was the Hong Kong Jockey Club. And that's because they've got a lot of bundles. And they capture the whole market. So I think there are a lot of people, there were a couple of interesting, the other odd one, which again was about number 12 or 13, in with the really huge rights holders, was the US Polo Company, And that's based on the Ralph Lauren licensing thing.

49:53So there are sort of interesting different models that you could sort of see. If I'm looking at, if I'm, again, in that group in the squeeze middle, below the sort of top end, I might be looking at that and saying, I wonder if there is something that we can do. So you sort of start to say the McKinsey question about, well, how would you then go about tapping in, just finding a different model that isn't reliant on this burning platform of broadcast rights market because I am going to get hit if I am rugby if I am cricket or I am you know they're in

50:25Arvind Iyengar:outside of the IPL I mean the answer is clear right I mean you said Hong Kong jockey club you said polo yeah you get a horse in there and you're sorted throwing a horse on a rugby field and suddenly you'll open up a revenue stream now we're cooking I think product innovation yeah but you No, no. I mean, no more horsing around. I think the real story is, I think there's, there are ways in which you can figure out the right answer, right? But again, some of this is unique. Horse racing has its own history of punting forever, right? So to rely on that as a single opportunity, I think is going to be hard.

50:57Arvind Iyengar:And again. But you get to sort of interesting questions about, so what happens when a sport becomes a betting sport is really, so horse racing has always been a betting sport. Golf is going through an interesting period. Tennis is going through an interesting period. You had stories this week about, you know, players losing and betting trolls, you know, have lost money and then they are sort of going after the player online. Formula One, betting on Formula One, betting on tennis, betting on women's football, betting on, all of these sort of markets, something happens to a sport when it becomes a betting sport and it's I think very underrated in terms of because as you exactly say horse racing has always had this issue and it's got loads of challenges and it's had to deal with these things cricket went for a betting scandal baseball you know but actually what happens when I think golf is fascinating if you start to turn golf into a betting sport if you're tempted down that road because I don't know whether the level of interest in the sport, how you then manage that and whether it goes on.

51:56Arvind Iyengar:Golf, by the way, someone came up with this radical idea of 54 holes in three days. But anyway, I don't know if that'll ever fly. But jokes aside, I think you're right, right? Tennis is the second most bet sport in the world after football. And it's a question of how do you maintain the integrity of the sport in a meaningful way so it's just not lost in terms of being a betting-only sport, in terms of being Massey, if that's the way to go. unless your sport like horse racing is built only for that and but at the same time how do you capture revenue from it to help grow the sport in the right way and so i think it just comes back to having the right safeguards in place yeah yeah i think it and so i think betting can help if but where is betting happening right where either there's popularity for the sport or there's more viewership or there are or a sport is uniquely positioned where there's an opportunity to bet at every point or golf you can do this what's going to happen on this hole what's going to happen here you can do head-to-head for particular parts of the course you can do a single round you can do various things with it but i would almost put that as a secondary source of revenue unless you're a horse racing like sport in there but it's how are you again going back to building that right product and i'd say for a last vast majority of tennis fans out there they won't even know it's the second most bad sport in the world but they're still watching it because they're watching alcaraz and they're watching Sinner.

53:13Arvind Iyengar:And so to me, the bigger aspect is how do you grow the sport? And then as you grow the sport, more people will watch it. That creates opportunities for people to feel like experts. And then as people feel like experts, they're like, oh, I can make money on it. Let me go bet. And so to create that interest in the first place, I'm going in a different direction and saying, you need to kind of focus on those heroes, right? Someone once told me this old saying, no one in India is a fan of cricket. They're fans of cricketers. It's the Tinker, Dravali, this. Yeah, yeah. There's Zinner, Federer, Nadal, Djokovic.

53:41Arvind Iyengar:same thing right who are the heroes in your sport that you're promoting in a meaningful way and so if I was building a sport I'd be like who are the heroes around which I'm building narratives how do I promote her to be able to tell the story in a meaningful way and then all the other pieces will kind of flow from that we did an event at Olympic Park a couple years ago and it was we were talking about convergence of sport betting and one of the things that came out of it was the customer profile of fantasy players and fantasy is fascinating one you know it's it's over here it's just the premier league fantasy product is extraordinary and i'm wondering where what the lessons of that are and what the what that tells us about what people want now from sport how they you know their relationship to it and it's it's obviously in your what have there's the sort of sport meets data question.

54:30Kids are now, you talk to them and they just trot out these, you know, what they've got. It's the money ball question. You know, it's nearly 20 years ago, I think it was published in the UK. And it's just transformed that bit of fandom, isn't it? It's really fascinating.

54:47Arvind Iyengar:Absolutely. And I think it goes back to the tenets of what are people doing when they watch sport today? And if you start to look at it, there's about three very meaningful trends, right one is it's no longer like a linear television screen and passive consumption it is active engagement right and so there's a statistic that i read the other day that 80 plus percent of people watching sport are on a second screen while doing it right and 60 percent of that are using it for social media and this was not mutually exclusive either social media 40 percent were using it for gaming 50 percent were using it to chat with friends in a group etc and so you're looking to interact during a game.

55:25Arvind Iyengar:You're looking to be a part of the action. And so that's why I think gaming is huge because now I've got stakes in the game to say, is my player doing well? Is my player doing this? And for folks who want to maybe stay one step away from betting and not put real money in there because they're like, I'm not an expert at this. I don't know if I'll make money. Now it's about more than money. It's about bragging rights, right? I'm playing with my friends. I'm playing with my league. I want to go out the next day in office and at the water cooler say, I totally destroyed you last night, right? and maybe in stronger terms, which is not appropriate for this podcast.

55:56Arvind Iyengar:And so that interaction element is super key, right? And so that's where I think gaming is fascinating because it is getting people in, it is getting people to come back over and over again. And that's how you're acquiring a fan and then retaining them and then figuring out all the other things to do with them, right? So I think that's one super meaningful consumption trend. The other is, you know, what is the younger generation doing? You talked about it. And, you know, my nephew is not watching 90 minutes of a football game. he's a West Ham fan by the way so well he wouldn't best of luck to him maybe that's why so anyway he's he's watching these games and he's like he's watching them on YouTube right he's watching the five minute highlight the six minute highlight he's watching folks commentate on it he's listening to his influencers saying something on it and so what is the right experience for him and again in the past you know I would watch games with my mom and my dad and we'd just be in one tv screen together right my nephew's not watching it on the tv he's watching it on his device separately so that generation of fandom is not getting passed down it's a different viewing experience so how do you figure out how to engage with that fan in a meaningful way and again that's someone who like fantasy or like engagement or like a poll or like some kind of you know if you can integrate it into roblox that'll be really interesting for him right and these are the two things of my world coming together in a meaningful way so i think there's the entire second screen piece of it there's the entire wanting to interact there's this entire piece of people are watching it on a screen and then there's the entire community aspect of it it comes back to that collective and fantasy does that again are there any have you noticed in that sort of gamification question and fantasy again i'm using that as a sort of proxy really for just that space but does it apply to every sport can you run a you know because a lot of people must be looking at the and we use the premier league here as an example but just for lots of things because they're the best at what they do in lots of different you know spaces and they're the most popular but can you run a fantasy a gamification model like that to every does it apply to every sport is there any is there a particular secret sauce that they've got not really i think you can apply it in any sport but then you need to be smart about what's the form of gamification to apply right with with premier league or any of the u.s sports where fantasy originally took off and it's still massive i think the nfl is massive because of fantasy football you have this every week games being played over a long period of time about 20 weeks 26 weeks whatever that number is and you get that sustained engagement but you know we are building games for formula one which is a different format and it's only got 20 drivers 10 teams but you've got to adapt the format between pick drivers and teams but you've also got to have a predictor element so someone can just come in and play a single game so there are various forms of games where it doesn't always have to be the season-long fantasy game.

58:40Arvind Iyengar:You can figure out drafts and auctions. You can figure out a smaller predictor. You can even figure out gamification in many ways, which could just be quizzes, polls, trivia. You can figure out other elements that exist when there isn't a live game, right? One of the things about fantasy sport is you need it to complement live sporting action. But what do you do in the offseason? You need to figure out another game. Or what do you do if you're a league that is not running for eight months in a year, but two months in a year? You need to figure out other ways to engage fans. So I think gamification, without a doubt, is key, right?

59:07Arvind Iyengar:And you're seeing it not just in sport. I mean, Duolingo does this when you're trying to learn a new language. So I think it's proven beyond the point that gamification works. How do you then adapt it to the right sport is where you bring in the right sport expertise, you know what fans want, and then apply the right model for that sport. Because if you sat and ran, you know, a fantasy game like this for cricket all season long across its different formats, it's not going to work. So then you've got to figure out what the right model is for sport, which is what, you know, daily fantasy, etc. One of the sort of strangest decisions, I think, over the last few years has been the FIFA decoupling with EA.

59:42Because I think there's a, we were talking to Finn at the ICC, who's had a digital. And they would love an ICC game, you know, owned by the ICC that is a cricket game of some sort that has the same sort of scale. FIFA had one. And, you know, the cliche that on podcasts like this for years was, oh, well, Gen Z only know FIFA as a game. they don't know it as a governing body and then that's now gone what tell me let's talk about that space what's happening in that sort of area who are the where where's the excitement in that area

1:00:16Arvind Iyengar:of football gaming so it's an interesting one because look there are multiple reasons i'm sure you've looked at why fifa chose to make that decision and again we've talked about things being political there's also a little bit of how much power rests with the game publisher which is which is the governing body and then when that power balance is not in favor of what one party may perceive as being the right equation there will be changes right and so i think it's an interesting world with esports as a whole right and and i actually think esports in general is a bit broader beyond sports itself and so i think it's a nice complementary piece for anyone and i think you can use it to run a bunch of simulations you can use it to bring in new audiences or keep them engaged all the way through.

1:00:59Arvind Iyengar:I think that's one where some sports are just better built for gaming and some are not. FIFA is great. Football is great, right? In whatever shape or form. I think it's really good. But I think several other sports and smaller sports may struggle to create the right gaming mechanics for it. But any sport where you're like, oh, I want to go in there and play is interesting. I think publishers, and when I say publishers, I'm talking about EA, Blizzard, etc. The guys who make these games are trying to figure out where it's worth the investment, where they want the rights to be able to do it and where you can just almost create a smaller game and it works just as well.

1:01:30Arvind Iyengar:You're also seeing a trend of these big, large games to these smaller, mobile-friendly, easy, flick-a-button, shorter-type games as well. My nephew will play FIFA, but he'll play it, obviously, in fast-forward, not FIFA anymore, but he'll play football on his PlayStation, but he's playing a 90-minute game over five minutes and it's shorter and shorter, right? And somehow he still gets like six goals in that type. so I don't know how he does it. But you're going to move towards these shorter, quick formats of games, et cetera. I think what's really interesting from that space is they've done a lot of work in, obviously, phenomenal animation.

1:02:06Arvind Iyengar:Those are full-on studios that are building these games. How much of that can be adapted to create compelling fan experiences with AI to almost recreate games, create hypothetical scenarios, feed in a lot of this, and then there you can start to say, Or what if PSG from this year met Man United in the 90s and then you've got Cantona there and seeing how he's going, going up against people. And then you start to create interesting scenarios around fan engagement using a lot of that intelligence and studio animation that's built in. You feed it in with the right data. You can then start to create simulations and you can add stuff into more fantasy or even betting, which then unlocks more and more markets.

1:02:46Arvind Iyengar:So I think there's a lot that's been done in that space, which I think over the next five or six years is going to shape broadcast experiences, is going to shape OTT experiences, is going to shape viewing experiences because of the level of animation and realism that's come in there. AR, VR, everything is going to essentially come out of those elements and it'll have augmented streams into everything else that you're seeing. And it doesn't necessarily have to be official IP, does it? I mean, it can be just, you know, we had a conversation a few weeks ago in London about just the rate of innovation of just creating new IP in Roblox, for example, or on YouTube, just relentlessly trying these new things.

1:03:22And some of them will catch, some of them won't. But actually, the rights holders, the big asset they've got is this official IP position, which is valuable to an extent.

1:03:32Arvind Iyengar:To an extent, exactly. And therefore, to me, that's not... I wouldn't bank on that as a large stream of revenue in the future, as a meaningful way, because... No, the IP into eSports came in, because it's valuable to an extent over there. It's valuable in a hundred other contexts, right? But in that one, like if someone came to me and said, yeah, we're going to bet the farm on these esports, right? And that's the way the world is going to shape. For a sport, I'd be like, maybe not. That world's really interesting when you start to look at, you know, all these first party games, first player, role-playing games, RPG, first person shooters, Call of Duty, League of Legends, that entire space and esports and what's going to happen there, I think is really interesting.

1:04:15Yeah, yeah. Let's throw it forward just to finish us off with the future of the Sports Interactive. What's on your sort of roadmap? Where do you see where the business is going? Obviously, we've talked about the global expansion is a key bit to this. And we're sitting here in London, so that's significant. But talk me through what else is on your mind.

1:04:35Arvind Iyengar:I mean, the very simple view is we started off by saying, let's serve 70 sports fans, which we were at the company, and maybe millions of others at the time. Now I think it's really saying, how do we build one of the largest sports technology companies in the world? And there is, we think, a dying need to fix that ARC challenge, acquire, retain, commercialize. Every rights holder has got bits and pieces of this figured out, but no one's cracked the Holy Trinity. Even agencies like us, I don't think anyone's cracked all of it. Lots of people talking a big game or solving parts of the problem, but no one's put it all together.

1:05:09Arvind Iyengar:And if you don't put it all together with the way the world is changing, accelerated with Gen.E.I., it was happening before that anyway, we're going to see massive changes. And so we want to be at the forefront of that and building one of the largest sports tech companies in the world that is serving sports organizations and along the way, hundreds of millions of sports fans with everything that we build. So that's really the vision. International is a big part of it. I'm based in Singapore we've got a team in India we've hired a ton of people in Europe we're going to be looking at a lot in the US more than a third of our business already comes from Europe but just how do we expand that even further while really serving the needs of you know sports fans and by default sports rights holders because those go hand in hand perfect right good place to finish thank you and good luck with the journey and I know you're traveling a lot so safe travels thank you very much Richard appreciate you having me here

1:06:03Thank you.