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Smartphone Boom Fuels A $1 Billion Fantasy Sports Industry

Sep 16, 2013
Originally published on September 16, 2013 5:55 pm

The whole beauty of fantasy sports is that you can manage teams of pro athletes without ever leaving your couch. The process of drafting teams, betting on the success of individual players and trash-talking with your similarly obsessed friends takes place on Web and mobile platforms, and that makes the fantasy sports pastime about more than just bragging rights. It's become a billion-dollar business.

The analysts at IBISWorld forecast fantasy sports will bring in $1.2 billion in 2013, representing a threefold growth since 2004. The Fantasy Sports Trade Association says 33 million Americans take part in one fantasy sport or another — and 24 million of them play fantasy football. The growth in popularity tracks closely with the expansion of broadband access and the smartphone boom across the country.

In fact, according to the latest numbers from the Pew Internet and American Life Project, about 63 percent of American adults now use their cellphones to go online, and 21 percent do their online browsing exclusively on mobile devices. That's a great trend for the main fantasy sports platforms. According to IBISWorld, Yahoo leads among fantasy platforms, with 11 percent of the market share, followed by ESPN and CBS.

While managing teams on those platforms is usually free, exclusive content like scouting reports or instant tracking apps are not. But most of the money fueling the industry is from advertising and sponsorships, which are mostly targeted to the young male audience that plays fantasy. IBISWorld numbers indicate that only 1 in 10 women participate in fantasy sports.

Good luck to your teams tonight as Pittsburgh plays Cincinnati. I'm hoping for a win tonight so not to go 0-2 in NPR's long-running fantasy league.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

ROBERT SIEGEL, HOST:

This is ALL THINGS CONSIDERED, from NPR News. I'm Robert Siegel.

AUDIE CORNISH, HOST:

And I'm Audie Cornish. And it's time for All Tech Considered.

(SOUNDBITE OF THEME MUSIC)

CORNISH: And we start today with football. All right, maybe you wouldn't instantly think of this as the techiest topic, but stick with me. The Pittsburgh Steelers play the Cincinnati Bengals tonight, and geeks of a certain variety are paying rapt attention to the analysis.

(SOUNDBITE OF TV BROADCAST)

UNIDENTIFIED SPORTSCASTER: I do love the Bengals' defense. Andy Dalton is a decent start. A.J. Green is a monster. I don't know if I could...

CORNISH: Some 24 million fantasy football managers are tuning in to the likes of ESPN, keeping track of the stats; then they'll make adjustments accordingly, to their own teams.

Fantasy football is wildly popular. While it takes place online, it's become a huge business. And NPR's Elise Hu is here to explain it all. Elise, we're talking about real money here, right? But just how much?

ELISE HU, BYLINE: It has actually grown to a billion-dollar industry. A low-end estimate, by the analysts at IBISWorld, say fantasy platforms will generate about $1.2 billion a year. This industry has actually tripled in size since it 2004.

CORNISH: So who's actually making the money here?

HU: Its Yahoo, CBS and ESPN, they are the three main platforms to play fantasy football. And most of their revenue tends to come from advertising and sponsorship dollars. Now, those estimated 24 million fantasy football players, they spend an average of at least a hundred dollars a year on league-related costs, so that adds up. And, of course, the lure of this is also the online gambling part. It's not like poker, which is regulated, because fantasy sports are considered a game of skill.

CORNISH: Now, interestingly enough, this growth actually seems very recent. And I'm assuming that this tracks closely to the boom in Smartphones.

HU: Yes, it does, and it's a reflection of more broadband access around the country, which is fueling that fantasy growth. The Pew Research Center actually came out with new numbers today, showing that 6 in 10 Americans use their cellphones to go online to browse. And 2 in 10 actually say they do most of their browsing on their phones - and not a computer.

When I'm not in front of a TV on Sundays, for example, I track all my players in both my leagues with my fantasy football apps - and that's apps, plural. That means a lot of opportunities for advertisers to get in front of eyeballs. Fantasy sports is a business model that works really well on Web and mobile.

CORNISH: And that must be true about other fantasy sports - right? - not just the hard-core football fans.

HU: That's right. Millions more will play baseball, fantasy soccer. And Audie, I know you're not a fantasy sports player, so too bad Fantasy Congress is over.

CORNISH: What? Nobody called me for that.

(LAUGHTER)

HU: Yeah, that actually let you draft lawmakers, and bet on how successful they would be in getting legislation through the process.

CORNISH: All right, Elise, next session we'll play then.

HU: You bet.

CORNISH: Elise Hu covers technology and culture at NPR, and writes at our All Tech Considered blog. Transcript provided by NPR, Copyright NPR.