Email newsletters are not a new innovation.

Distributing news content through email is an established practice, but the medium has re-risen over the last 3 years and now holds a prominent place in most inboxes.

Major news outlets want to send you a morning update and start-ups such as The Skimm and The Lenny Letter have built entire media juggernauts out of email alone. These start-ups have taken a page from Clayton Christensen’s Theory of Disruptive Innovation – that a more complicated product is not necessarily best for the consumer. The newsletter is a simpler platform for readers to consume the news and learn about that is going on in the world.

But why now – what happened to bring this content distribution platform back into the spotlight?

  1. Content Proliferation. They say “content is king,” but too much of it can be overwhelming. The number of new websites and blogs has exploded over the last 3-5 years and social media provides an easy way to share and comment on stories, which creates even more content the poor reader must consume to stay up to date. Readers now want curated content on topics they deem interesting, and they want it seamlessly delivered. Newsletters have provided the perfect platform to fill the demands of busy people. Newsletters arrive on a predictable timeline and are a trusted source of the key things subscribers need to know. Subscribers rely on these sources so much that according to a 2015 Quartz Global Executives Survey 60% of executives say an email newsletter is one of their first 3 news sources they check daily.  Newsletters have become the subscriber’s way of creating order in the chaos that is digital news media.
  2. Attention spans have gotten shorter.  With attention spans declining, subscribers to e-newsletters want curated content in digestible formats. 75% of the executives in the Quartz survey say they spend at least 30 minutes a day on news consumption and readers are consuming more news that ever before – which means readers demand quick, eye-catching, and memorable stories.
  3. The shift to mobile. Facebook has proven the shift to mobile is real, and the same is true in the news business. 61% of people say they now consume news on a mobile device and 44% of people say they do that consuming right when they wake up. People are reading news and email often before they even get out of bed on their mobile devices. The e-newsletter is therefore very important to content producers, and subsequently their advertisers, who have a captive audience in the mornings. Despite the best efforts of news app creators, the mobile hierarchy of email, social media, and then other news apps is still real and makes e-newsletters ever more important in today’s distracted world.
  4. Better email technology. Technology innovations have made it easier to both send and receive email newsletters. Companies such as the email marketing service Mailchimp have made creating a subscriber list and reviewing analytics easy, lowering barriers to entry for publishers. Users of Mailchimp alone sent over 100bn emails in 2014, which is a 43% increase year-over-year. On the receiver side, Gmail and other email providers now separate primary emails from everything else making it easy to skim content from a lot of newsletters quickly.

As newsletters continue to infiltrate inboxes, I’d argue that the consumer will only have time or tolerance for 1 or 2 in each subject matter. With over 1.5m subscribers as a first mover, The Skimm has cornered the general news vertical and topic-specific newsletters are the new focus. Within the specific verticals, I believe that sports is the most attractive domain.

Sports news is as an ever-prominent topic of conversation and an email newsletter is a logical platform of delivering content to subscribers. An email provides a defined list of the most important sports stories in an age when people have become increasingly obsessed with sports. Games are the most watched TV programs and fantasy sports are now played by over 50m people in the US and Canada. Sports events are often the center of social gatherings and being fluent about relevant games has become table stakes for many professional and social networking situations. The high educational barriers to entry for many sports conversations and the time required to move up the learning curve makes a curated list of relevant sports stories ever more important. Sports Ketchup is one of the early entrants into this market and has shown there is demand for curated content for the non-fan or the busy fan.

With the growth of email newsletters, I believe the biggest question is who will succeed. I think there is room for winners across verticals, but within topics readers likely only have mindshare for 1 or 2 providers on a consistent basis – making them winner take all segments.

By: Britt Danneman

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FanDuel and DraftKings

If you’re a football fan like me you probably are wondering the same thing as me.  Why are there so many commercials this year for FanDuel and DraftKings?  Furthermore, what do they do and how are people making “millions” everyday playing fantasy football?

A recent CBS news article claims that 56M Americans play fantasy sports.  That is nearly 20% of the US population.  All sorts of Americans of different interest levels, genders, and ages play during the NFL’s 17 week regular season.

One day draft services, such as FanDuel and DraftKings, are a new spin fantasy sports and describe themselves as short term contests with the opportunity to win big money.  The steps are simple and defined as follows: find and choose a contest, draft your team, and win.  The unique options offered in each of these steps are what are drawing so many new users.

Choose a contest

One day sites offer a plethora of options to choose from.  FanDuel, for one, offers games in NFL, MLB, CFB, NBA, NHL and college football.  Leagues can be head to head or in a group setting.  Entry fees range anywhere from $1 to $5000 and prizes ranging from $1 to $1,000,000. There are simply options for all types of sports fans with varying risk tolerances.

Some of the weaknesses of typical fantasy football leagues are that they are 17 weeks long and there are limited “betting” options.  Leagues last 17 weeks and often people lose interest.  Another downside of the long season is that players feel that too much luck is involved.  Winners are usually determined via a 2-3 week playoff which disregards prior performance.  One day leagues attract users who believe they are expert fans and want a more equal playing ground.

Another weakness is that betting is a popular way to generate interest however is difficult to coordinate unless amongst friends.  Betting with strangers is rare.  One day leagues offer a way for participants to play against a larger pool of willing betters and match their risk tolerances.

Draft your team

Traditionally, fantasy football drafts are either snake drafts, in which participants take turns drafting players, or auction drafts, in which participants bid to draft players.  In either case, no two participants can own the same player such as Tom Brady.

In DraftKings and FanDuel however, players are assigned “$” values based on projected performance and participants can draft any combination of players so long as they stay below a $ cap.  The benefit to this method is that again players feel that they have more control of their destiny.  They are not subject to how others around them are drafting and do not have to worry about fluke injuries that could negate an otherwise intelligent draft decision.

Win Money

Draftkings proudly boasts that I gives away $1M of prizes every week.  For the average sports fan, this is almost a ridiculous thought.

On top of it all, both websites are offering numerous promotions to earn free entries, trials, and money back guarantees.

It’s quite obvious that both are not only trying to attract users but also perhaps battling each other.  It’s not clear to me yet if this is a winner take all space.  Neither product is differentiated from the other in a significant way.  Also, what will be the competitive response be from traditional fantasy sports platforms such as ESPN and Yahoo who can mimic one day fantasy sports options?

By: Andrew Fong

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The Pitch

The expansion of social media has had a massive impact on the world of sports. Instead of relying on national news websites to obtain information regarding sports teams and athletes, people are now able to login to their respective Facebook and Twitter accounts to get updates ranging from real-time game progress, to an athlete’s favorite movie. Social media has created a transparent system that allows fans to enjoy amplified engagement in the sports world; athletes to freely engage with their loyal fan-base; and athletic organizations to capitalize on essentially free marketing to reach a broader audience. But does all this have long-term potential?

The Swing

Fans are able to fully interact with the sports world through social media platforms by expressing their opinions directly to an athletic organization, or athlete, as the game happens in real time. Studies show that a majority of sports fans are on social networks while watching games, so they can weigh-in on the action. So if a fan likes or dislikes a certain play, he has the option to immediately inform the athlete or organization directly. This transparent interaction allows the fan to feel more connected to the athlete, the game, and the sport in general.

After a game, an athlete will be able to login to his Facebook or Twitter account to respond to fans, fostering a more “meaningful” athlete-fan relationship. Although some athletes might do this out of the “kindness of their hearts”, it seems more logical to assume that they do this for good PR. Whatever the incentive is, social media provides a channel for fans and athletes to share a deeper connection. In some cases, this could pay off for athletes: Tim Tebow gained popularity with the “Tebowing” meme; Jeremy Lin rode the “Linsanity” waive as long as he could; and Nick Swisher even earned a spot in an MLB All-Star Game due to support from his loyal fan base.

The Drive

Even entire athletic administrations are now capitalizing on an avenue of free marketing by using social media platforms to disseminate athletic progress. Fans simply follow the organization’s respective Twitter account to receive real-time information on individual athletes, and the team as a whole. The popularity of social media has encroached so deeply into the sports world that we are now seeing professional lacrosse players sporting their Twitter usernames on the backs of their jerseys, instead of their last names. Mississippi State even decided to repaint their football end zone to #HAILSTATE. Given that social media platforms create an avenue for free marketing, good PR, and facilitate deep connections between fans, organizations, and athletes, it might seem as if social media hit a homerun in the sports world – what more could you ask for?

The Catch

Although it might seem that the impact of social media on sports seems to only yield positive externalities, it does have vital downfalls that could cause the system to collapse. If used ignorantly, social media could be detrimental to some athletes. Social media platforms give athletes the ability to disseminate uncensored information directly to the public by allowing them to express any opinion, at any given point in time, on any subject – as an athlete myself, it is not hard to imagine that other athletes might say dumb sh*t from time to time. In fact, it actually happens a lot, to the point where athletic administrations incur costs so they can monitor their athletes’ social media use to ensure that athletes do not post anything that could potentially tarnish the athlete’s, or entire organization’s, reputation. Larry Johnson (running back for the Kansas City Chiefs) was released from his NFL contract after publically insulting his coach on Twitter after a game. Rashard Mendenhall (running back for the Pittsburgh Steelers) controversially tweeted about Osama Bin Laden’s death and 9/11, and consequently lost an endorsement deal from Champion. Chad Johnson (wide receiver for the Cincinnati Bengals) was fined $25,000 for merely using Twitter during a preseason game. The negativity even extends to potential college recruits losing scholarship opportunities due to inappropriate content they post on social media.

It might seem that the only downfall of social media’s impact on the sports world lies within the athletes’ ability to express their uncensored thoughts. Sure, athletic organizations are able to pay thousands of dollars to a company that could provide some censorship, but does that really solve the problem? There has been a recent drop-off in athletes using Twitter because of the negative light associated with posting something controversial – “if something has the potential to end your career, you might as well not use it at all”. It is starting to seem that the deeply driven, homerun-like baseball of social media could turn into a routine fly-out. Given the many benefits of social media on the sports world, it is hard to imagine that athletic engagement with social networks will stop completely. This then begs the question: how do you allow athletes to share a deep connection with fans on social networks, while fully restricting them from saying anything controversial? I believe solving this problem will add enough juice to turn social media’s fly-out into a homerun, and ultimately show long-term potential.



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