After receiving a multi-million-pound investment from Modern Times Group (MTG) last year, digital content company, Engage Sports Media (ESM) is on track to extend its business and maintain its growth. CEO Gregg Oldfield, at the helm of ESM since a management buyout in 2012, talks to TMT Finance's Joseph d'Arrast about how to monetise non-live content, a relatively new and growing business area.
Could you tell us first about Engage Sports Media’s (ESM) core business: what is the service you provide?
ESM are pioneers in the development of non-live digital video. We work with leading brands and sports-rights holders to create, value and monetise their content for global audiences. We produce high quality, innovative and engaging sports entertainment content across football, rugby, cricket, motorsport & horse racing. Our content will reach over 1 billion sports fans throughout the world this year.
Which tools and services do you use?
Intelligent research is at the heart of what we do. We combine leading data tools into one usable dashboard based product for a best in class but cost effective approach to measuring and predicting fans' content consumption. We are able to give clients unbelievable insight into current and addressable audience, tracking digital lifestyles across both sport and non-sport content genres. This allows us to break new ground and bend conventional rules in engaging with audiences, arming clients with a commercial strategy to get results with existing partners and opening up conversations with new ones.
But why non-live content?
Sport IP owners have primarily concentrated on generating revenues from their live media rights. In the recent Rugby World Cup 2015, over 80% of the digital video views delivered by ESM were non-live content. This is where we become relevant.
Non-live content is becoming almost as important as live. It is part of the ecosystem, fans start to expect it more. It’s digital first. Generation Z want to be entertained. Non-live is an authentic way for sports franchises and brands to communicate with this audience. This non-live content can be packaged and sponsored by brands who want to engage the fans.
What we are saying to our clients is that there are options to sell live rights to generate revenues in the future. There are many rights windows and new platforms. The growth in digital channels allows IP owners to distribute their content and build a huge fan base. We do it both for the main sports rights IP owners but also for the second tier sports are also important.
Who are your clients?
We built our business with ‘Focus’ on three key sports: football, rugby and cricket. Team sports are our heritage, the ones with the biggest fan bases, international exposure, major sponsors, a season of at least 10 months, with content that engages the audience for the entire week outside of match day.
But since we received the MTG investment we have been expanding our portfolio. We have added new sports categories including horse racing, motorsport, Olympic sports and sailing. A lot of American sport franchises are coming to us now to ask for our services to help them develop an international digital strategy.
It’s a young industry within the industry. How did you come to it and how did you develop?
I founded the business in March 2012, over four years ago now, following an MBO from Endemol. The funding was raised from high net worth investors. Originally, there were 22 employees. Today, we are over 50 staff with offices in London and Mumbai.
Last year we decided to bring in a new investor to accelerate our growth. We appointed IBIS Capital who ran the process and after securing a number of offers, we decided to go with the Modern Times Group (MTG) who took a 22% stake in May this year*.
How are you investing this fresh equity and what’s your plan for the coming years?
We invest in three areas: content IP development, technical IP and software tools and people.
We now focus on a growth strategy through a new five-year business plan. Our target is to generate £25m revenues by 2020.
We are also diversifying to de-risk the business and reduce our exposure. We have started our own content channels with Sports Now Local and an incubator football channel, which allows us to take more control. We are targeting a 6 million subscriber base by 2018. Additionally, we have started a seed-venture vertical where we take equity or form commercial JV’s with sports franchises and tech companies relevant to our space.
*ESM was advised by IBIS Capital Partners and represented legally by Onside Law on the deal.