Background and challenge
A well-known U.S. professional sports team wanted to evaluate the market potential for an interactive subscription product that included exclusive live game content.
The team’s leadership engaged L.E.K. Consulting to validate the size of the direct-to-consumer (DTC) market opportunity and provide recommendations on an executable go-to-market strategy.
Approach and recommendations
L.E.K. began by conducting a comprehensive analysis of the sports team’s fan base. The analysis included an online quantitative survey that defined:
• Key customer segments
• Local market vs. fans outside of market
• Purchase and consumption behavior
• Demand dynamics
• Anticipated appeal of product and specific variants of it
Through the survey, L.E.K. was able to identify what fans really valued about the potential product, which was a radical departure from anything else on the market, and what they would pay for different variants being considered. Based on these customer insights, analog research and detailed financial modeling, L.E.K. developed an estimate of the opportunity size and projected growth for the service and helped team ownership make key decisions about the launch. L.E.K. also supported the fact base behind negotiations for accompanying linear rights and helped inform league strategy.
Based on L.E.K.’s recommendation, the team was able to create a strong argument for building a DTC product, and clearly understand both the trade-offs and how to maximize odds of success.