As a senior executive at one of Europe’s leading sports technology companies, Carlo de Marchis is frequently asked at a number of conferences and background discussions about what will be the next big trend? What will the future bring? How will the sports world survive this pandemic crisis? In an exclusive interview with sportsmarketing.hu Carlo addresses this issue and also reveals: what is the secret of feeling great at a workplace for 35 years and how he keeps his motivation and tireless momentum every day.
Innovating in the sport ecosystem since 1986
Carlo, you have been working in sports for decades, developed together with the market and the company organically. To understand the present and the future, it is worth knowing the background, the past of Deltatre. When and how did the company start its journey in sports?
Deltatre is a 35 year-old company, which was founded in 1986. Before the internet and the use of computers, data and broadcast graphics in sports. A famous computer company close to Torino, called “Olivetti” sponsored many sports. They created an “Olivetti for sport” division, and sponsored Formula 1 at the beginning, and Alpine Ski World Cup in the winter. This was the starting point of our company: what we were doing was data processing. The organizers told us the time, we put it in some graphics and implemented that for the broadcast – at the beginning in black and white. At that time it was a very sophisticated solution. Formula 1 is not like football! Measuring, showing and designing the data in a car race back then was very pioneering.
Actually the first Hungarian Grand Prix also took place in 1986. F1 brought us a breakthrough in terms of innovation and sport as well. What was your next historical milestone?
Every sport started to have sponsors in those years, so things started to accelerate. In 1993 Olivetti ended its great journey as a company. After that we were able to work directly with clients. The next milestone was 1994, the birth of UEFA Champions League. The concept of the CL, the centralization of the rights and broadcasting gave us an opportunity. Before that, every data point was collected and visualized by the local broadcaster. Then, with the birth of CL, UEFA needed a company who could do it properly, and centralized these activities. At that time with sixteen matches every week it was extremely complex. We were lucky that we were the company that could manage everything at the end. In the same year, in 1994, we started to develop websites, and we could gain more and more clients, because it was kind of a green field. We were innovating and organically grew together with our clients, and we ended up working with Moto GP, FIFA, Athletics, and so on.
What was the real fuel of this organic growth?
The key was the digital part, which became more and more important. The Beijing Olympics in 2008 was another milestone when we worked not only on the Olympics broadcasting but also on video content which you call nowadays OTT [over-the-top]. Then, the more recent development was in 2016, when we were acquired by Bruin Sports Capital. Subsequently, in 2018, we bought Massive Interactive, a company dedicated to OTT in sports and entertainment. So that is where we are today. Deltatre has one thousand people working in 18 office hubs in 16 key cities globally. They are working in the intersection of sports and media. Our clients are either big sports federations and leagues, or rights holders. And on the other hand, we are also working in the entertainment business.
“I have a very weird CV, basically one line”
How do you see the philosophy behind Deltatre? Which area is stronger in your business: the B2B or the B2C orientation?
We are always “b2bing” the way we sell, but we are always thinking b2b2c. Strictly speaking we are not selling directly to consumers, but our clients are going to consumers via our service. The other field of the company, because of its wide spectrum, we call it “field to fan” or “glass to glass”. From the moment that something happens, and someone captures it in some way – a glass of the camera for example – we can put it in any screen, the glass of the screen, and that is basically enabling and monetizing passion for fans and clients.
When did you start your career at Deltatre?
Very early [laughing]. I have 35 years’ of experience in the business and 33 years at Deltatre. I was among the first five people working for the company. I have a very weird CV, I have basically one line, because I have one year with another company where I did basically the same stuff. However, I am never stuck doing the same thing for two reasons. One: as we have this global footprint, within a day I could be speaking with the NFL in the morning, then Amazon, then with another key player of this ecosystem. The other reason is that in this industry I always find something new. We are always thinking about what is happening next, and how we can adapt and integrate that into our offering. The sector itself is very challenging.
Deltatre supports rights holders and owners in delivering multi-dimensional and multi-platform sporting coverage focusing on three different experiences:
- online, providing truly immersive digital user experiences;
- onstage, adding value for viewers on venue and on linear TV;
- backstage, for those who work behind the scenes enabling any other front-end service.
The services provided by Deltatre range from live streaming technology through designing websites, mobile apps to a revolutionary video player. Deltatre delivers results, TV graphics and other on venue services [scoreboard, commentator information system and printouts], as well as a comprehensive sport event management system.
“From the fan perspective, sports and entertainment are not so different”
What are your duties right now as a Group Chief Evangelist?
That is a funny role. What I am doing is basically strategy, with special focus on product strategy. In my career at Deltatre, I have fulfilled the roles of Chief Technology Officer, Chief Product Officer, Chief Product & Marketing Officer and then I have this role now.
It is obviously a global role. The company now has three main units. Everything with video is called video experiences, both sports & entertainment. Everything in sports from data to graphics to anything we call sports experiences. Then we have recently created a new strategic consultancy unit, where we also involved design. I am responsible for finding out how we can keep, maintain, and develop our competitiveness in the market for our existing and potential clients. We always try to predict what the clients need. Through the years the clients are buying in different ways. There was a technology buy, then from 2000 to 2010 the content people had a big influence, the requirements came from that side. Then there was a shift to marketing. And the recent shift is in direct-to-consumer marketing. In the OTT and subscription-based business the logic is different. How you sell, how you talk – is different. All in all, I focus on our strategy and I present at conferences, basically I am one of Deltatre’s public facing executives. I talk to everybody – to competitors, to clients, to the media, etc. Because especially when you are at home, for one year, it is important to talk to people to have new ideas. I really need these occasions.
Sport & Entertainment – why do you think they are so close to each other? Which are the similarities and differences between the artists/bands and the athletes/right holders?
Right now it is an intersection for us. The acquisition of Massive Interactive gave us a lot of knowledge about working in entertainment. If you reverse the angle and look at it from the fan/audience perspective, sports and entertainment are not so different. Listen to music, watch a movie, watch sport – it is about having fun, being entertained. For years, I’ve advocated that big sports organizations should go into the entertainment world – producing a series or other special content. At that time, it was a crazy idea, but look at what is happening now. F1 is discovering that having the official series on Netflix is bringing more US fans to Formula 1. You need to go where your audience is, and you need to do it in a way like people consume content. On the right platform with the right content.
Sports had/have this luxury situation with the TV-rights. This kind of simple business model is over. Now instead of having one big B2B revenue stream you need to have a lot of additional, maybe smaller revenue streams. And you need the conversation, the relationship with the fan, otherwise it is difficult. It does not mean you do not sell media rights. But you need to understand your fans, otherwise long-term growth is difficult.
Is it true for the entertainment sector as well?
In entertainment we try to create our own map of entertainment. Because it is a very diversified business, especially in content formats. It is a sophisticated world. I think we can bring knowledge to more traditional entertainment. We are a company which normally focuses on owned and operated content [website, social, video, etc.], so what we can do in this business is to earn greater engagement in the owned and operated experience. This is the angle we want to get in entertainment. But especially creating a solution that can combine sports and entertainment – because at the end the fan is consuming one and the other in quick succession sometimes.
It is from our side that we see the content in kind of segmented silos. On the fan side it is not so different. You have a flow. On Instagram you are going from a celebrity to music to whatever you follow. It is not the reality that you say, uhm, I watch sports, uhm I watch a celebrity. Different strategy, but I think more and more you need to start from the fan perspective.
Due to the pandemic, our strategy is accelerated by 3 years
How did the pandemic crisis affect your services?
There was a moment, temporarily, in which we lived without live sport, which had a negative consequence for us for sure. On the other hand, everything digital just exploded. On some OTT channels we have far more total minutes of views than before. Our strategy accelerated. Because very often clients did in 2 months all the things we talked about doing for different reasons. The understanding of some digital behaviors accelerated. Whenever we come out of the pandemic, the organizations that have not used this moment to really accelerate change will suffer going forward.
How could you adapt to the rapid changes on the market?
We have launched major projects during the pandemic, like the new website of the MLS. On the other hand, our company, in terms of operation and effectiveness also improved a lot. It is true that we meet less, but we are more connected. Which is kind of crazy. We have 18 offices across the globe. 250 people in Torino, 250 in London, 100 in Germany, so we always had calls when people were in different places. But in some way, because we cannot be in personal contact, we are more connected.
In which areas are you the most active right now?
We are strong in Europe, but in recent years we have had huge wins in the US. Since we were acquired by a US investor group [Bruin Sports Capital] we adapted a lot of methods in terms of how we operate. Before that nobody thought we would be seriously active on the US market. Now they know, and we already have major partners. This market is super interesting. In Europe, after a certain point it is a barrier that everybody knows you. In the US, we were in a kind of underdog situation, the newcomer of the market. As for Asia: we are working there in different ways. The fragmentation of this market is a tough challenge. It is a market we are still learning how to win because there are many regions. We are working in India, in Australia and in China, which is a complete other world, for example. Asia is a super interesting market for us, but very fragmented – we are getting organized.
About the US market: freedom within a framework
What are the differences between the US and the European based clients?
If you look at the big leagues and big federations, there are structural differences. The franchise system of the US is so different even from the ‘Big Five’ leagues in football and everything else. The dynamism, and the level of centralization is so different. The US, as a nation alone, is such a big market. For them the international part – even if they are further growing – is secondary. In Europe, the big rights holders and brands are now aiming for more internationality. Just think about the fact that almost all big sports organizations HQ’s are in Switzerland, they were “born” to be international. Think about FIFA, which is global by definition. Compared to organizations like the NBA or the NFL, this approach is completely different. The US is more centralized, in a good way. Because what they are centralizing is everything that does not need to be done by the clubs themselves. Our project with the MLB means that all clubs are on the same digital publishing platform – in a “multi tenancy” model. I call it freedom within a framework. In Europe, for example in Italy, all the 20 clubs of the Serie A try to find a CMS solution for their websites. Imagine how much of that is lost.
What was the main reason behind the creation of your own products? As a service-based company it is not evident that you need to develop “tangible” assets as well.
I have always been the guy who was linked to innovation in Deltatre. Now, our Head of Innovation, Pietro Marini runs an innovation lab focusing on machine learning and AI. But innovation is bigger than that and happens in the company at different levels. Every year we invest a sustainable amount of money to develop our products. Even if we are a solution company, through the years we developed products, otherwise we would not be sustainable.
So these kinds of developments are the key parts of your sales strategy.
We sell two things. We are deeply immersed in the industry, and are knowledgeable and passionate about what we do, what our clients do, what the athletes do, what the fans do. Even if we are a supplier – and this is not a sales talk – we are a partner of our clients. We normally focus a lot on their success, because that is one of the reasons why they stay with us for such a long time. We really care about how they use our solutions. We even argue, passionately but respectfully, about how they could use our solutions in an even better way.
On the other hand, innovating the product is complicated. There is a continuous creative and innovative push that we undertake. We have a workshop with clients every 6 months. Even when you work day-by-day, you may have a new idea, but you are in the middle of a project with deadlines, negotiations which do not let you innovate.
For this reason we take clients out – now on Zoom but in the past we met at an offsite location – and dedicated one full day to this endeavor – to forget everything, and think about how we can innovate football highlights, graphics, or anything else.
How does this “escape from the world” method work in practice?
Very well. If you are able to isolate people who are knowledgeable and you put them in a context where they can rethink what they do, this generates great things. We innovate because we are smart. I never have a conversation with a client when they say, ‘Okay, let’s do everything you did before.’ The fans want something new, the broadcasters want something new. This is a business which needs innovation to survive.
“People consume more content now than ever”
I have found some exciting buzzwords in your newsletters, one of them is „Content fatigue” – could you please briefly introduce this term and what do you mean under that?
Actually, I did not write this article, but I can guess what one of my colleagues could think. There is so much content around people being bombarded with. You can also connect this to the streaming wars, to all the big OTT players. People ask themselves: how many OTT subscriptions can I afford? I personally have 22, normal people have 3-4. Content fatigue is a problem for content providers and the audience as well. You clearly do not have priority in people’s minds. The explosion of content and the way content can be distributed is segregated. Compared to the past, people now consume more content than ever. That is obviously becoming a complexity for you as a content producer, or content owner, or a distributor. But for the people as well. I mean there is a joke that people are on Netflix for 40 minutes to choose what to watch and then they leave when the movie starts. This is real!
In this highly overcrowded content world, how can you stand out and engage your audience?
Especially since the onset of the pandemic the one word that I have used and I think has become more and more relevant is AUTHENTICITY. The more authentic you are as a brand, the way you do storytelling, manage your sport or how the sport is played – I think this is what creates the connection with people. People become a bit more human. Look at what Marcus Rashford did in the UK. It is not like Corporate Social Responsibility. This is a level of authenticity beyond that. Besides what he does as a player, he is also a humble and kind person – it is becoming a great message people are connected to. Especially in these times.
Will the human side of the athlete play an even more important role?
In the past, players were good at playing but people do not know them as a person. Now with social media, you know the players’ human side as well. They started to understand that it is not just about the sport, but it is about who you are. That is one of the things that could make the difference, and fight against content fatigue.
If you could choose 5 main key trends dominating the sports entertainment business right now, which are they?
For sure, one of the most important trends is to focus on the fan, at large. Not just meaning across OTT, but in terms of a holistic direct-to-consumer relationship. Having this conversation with the fans, activating them, etc. It is surely one thing that I can find in any strategy, with any clients, in any sports. So direct-to-consumer is the one.
Not because of Clubhouse, but the audio is the second. It is really underestimated, underused. But audio will play an important role.
The third one is the evolution of the NFT. Maybe it is a big bubble, but there is a big potential it can open up when it goes out of the bubble.
For sure the use of machine learning and AI in sport is also important. Machine learning and AI enable a lot more opportunities than just user experience. It can be a success factor if we can use them for something smart. That is where we need to focus.The last one for sport is the production. We are still producing sports, mostly for linear TV. Not completely, but mostly. Compared to the innovation in the other layers, sports content production in the end is the same – 80% for linear TV. That can really deeply change. Production will change based on the distribution and on what the audience wants.