#SXsports 2016: The 20 Best Insights From Adam Silver About The NBA’s Existence In Our Digital World

AUSTIN, TX – As has become increasingly apparent, the NBA is a digital-focused league. This has lead to strong international growth for the top global basketball league and sets them up for continued growth in the time of cord cutters and Snapchatters.

Today at SXSW, NBA Commissioner Adam Silver shared his thoughts in a “Courtside” chat at the Austin Convention Center about the future of the league, how they distribute content in a shrinking world and even his own personal habits for how he engages with NBA content on OTT platforms and social media.

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The following is a list of twenty of his most important insights during the conversation:

1. There are millions of people that stream games like I do. I use Watch ESPN as much as I do on television at home.

2. Most people won’t sit down and watch a two-and-a-half hour game. They are going to watch highlights.

3. The volume of people continuing to stream videos from the recent slam dunk competition continues to grow as word of mouth spreads. Did you see what Aaron Gordon did? That sort of thing.

4. The downside to live programs may be that it’s perishable and it won’t be evergreen and live forever.

5. David Stern realized that at root, we were a content company. And it was content that was becoming internationally popular really quickly. It started in Barcelona with the Dream Team.

6. It used to be, in the 90’s, we would watch those tape videos of ‘Come Fly With Me’ about Michael Jordan until the tape wore out. And we would FedEx the tapes around the world so people could consume the content.

7. As the demand grew our international broadcasters wanted highlight shows. So we started creating shows that could be customized in various countries. But these weren’t airing live. They were a day or two later. But then around the start of the internet we built our website that had a live scoring module and news module and the most basic stuff. In fact, I remember the early days with the MLB long before MLBAM and they were out there hiring all these companies in the early days trying to get these websites right. And then about three or fours years later all the sports leagues websites started looking the same as traffic tendencies were known.

8. I love Bob Bowman and what MLBAM has done but we are so fixated on basketball that we wouldn’t want to promote another league by using them for our streaming. I understand how baseball ended up in the business they’re in where they are servicing other sports. They got to a point where they had such large infrastructure where they had to find other clients. Where as we partnered with Turner and we get the best technology that CNN and TBS are getting. At least that was the direction we went in.

9. We are building a community with Facebook, Twitter, Snapchat, etc. and we are filling digital arenas. For me, they are largely a marketing tool right now for us. Our television deal is locked in built on basic cable penetration but we’ve had our own OTT product for a long time, that’s NBA League Pass. And for the first time this year you can buy a single game for $6.99. For fans out there who want to see Kobe’s last games and you live outside the LA market then you can watch that game on your phone or tablet.

10. We’ve had 35 million downloads from the NBA app just in the United States this season. And I think we are just scratching the surface. One of the thing that frustrates me right now is that the demand and supply curves aren’t meeting. I know the demand is out there and with my own viewing habits I see what’s out there and I think we need to do a better job of marketing these services and how easy it is to see all those remaining Warriors games. They may just got to ESPN and see that their game isn’t on and not look to stream it.

11. Based on all the ratings data, one billion people experienced an NBA game last year. As I travel to Asia, Africa and emerging markets I see tremendous upside with China being the largest market from a business standpoint outside the United States. We did a huge deal with Tencent where they are streaming hundreds of games. In fact, ESPN just did a deal with Tencent to supply shoulder programming and NBA content around our games.

12. Right now the authentication process is extraordinarily clunky for streaming.

13. Cable cutting is small but it’s real and I think the cable companies will have to respond. Whether millennials pay for cable as we know it, I think they pay for great content. The Watch ESPN app and their potential to deliver that content directly to phones is so powerful. All of a sudden now, the phones mean that TV travels with you and the notion of primetime is very different.

14. One of the reasons we are here at this conference is we want to be at the forefront of technology. We want people to think NBA and use technology to experiment. We’ve done a lot with VR and are experimenting if people will sit through a 2.5 hour game with a headset on. What we’ve always said long before their was VR is that the curtsied seat was the best in all of sports. But that Jack Nicholson seat can’t scale. But now VR comes along and everyone in the world can have the same angle that the referee does. It’s also a realization for us that in our arenas that have 92% capacity, and growing, are also a broadcast studio for us. For 99% plus percentage of our fans will never be in an arena or in the United States. So how can we replicate that experience? Part of it is visual. Can we place them courtside with VR?

15. I’ve seen content in VR that was a Lebron workout where you viscerally feel like you’re there and you see the beads of sweat and his tattoos. And in a way it’s like going backstage at a concert. I think it’s still early stage but this is why we are here (at SXSW). It’s to see these young brilliant entrepreneurs. It’s to see how we can advance and think NBA when you’re thinking VR and new content.

16. We have this great deal with SAP where they create a nearly unlimited amount of permutations where you can see instincts and judgement and how data shows how particular players perform.

17. I think we were early adopters in terms of encouraging our players on social media. When a rookie comes into the league we actually set up stations with Facebook, Twitter, etc. to authenticate them and make sure its them. It also gets us an opportunity to set some rules of the road with them. Which is no different than doing an interview for CNN. At the end of the day, we are a business so a player isn’t going to swear or post something that is illicit. And the players understand that it’s reputation driven. They make mistakes and the league office makes mistakes but overall it has enormous value for the league to make them into multi-valued people that they are. It gives them direct access to their fans and ability to share their personal interests.  There’s a large segment of our fanbase who want to know who the players really are. And it won’t undermine us to have the players all have their platforms when negotiations come up. Social media from our players makes our ratings higher and brand stronger.

18. I’m an extensive user of Evernote. I collect a lot of data there. I’m of course a big user of Facebook and do have my own accounts and post real stuff there. And I just kind of post stuff that is backstage so to speak, like Yao Ming hugging Steve Ballmer and Michael Jordan before a game in Shanghai. That’s just stuff that needs to be shared.

19. We jumped into the world of daily fantasy. We have equity in FanDuel but at the same time we don’t want to go sideways with the law. At the time of the deal it was our interpretation of the Federal law that there was a daily fantasy carve out. But where I believe daily fantasy is going is it will become a regulated industry. We just saw in Virginia the governor regulating it in their state. Which we are supportive of. The more transparency and regulation the better. And I believe it’s a game of skill more than gambling but I think it’s pointless to debate. It’s daily fantasy. If yo want to interpret language then I get it. But what i don’t get is when the interpreter says this is evil but in those same states they have casinos. Regulated gambling is part of Americana now. We have casinos in 44 stats. Honestly, right now the real threat to the league is the estimation that gambling is a $400 billion underground market. So I think daily fantasy will be outlawed in some states but will emerge as a viable in market in most.

20. I think with Virginia saying daily fantasy in that state is legal will accelerate the legalization of regulated gambling. And as this shows, the internet is as disruptive in sports as it is in any other industry.