As you undoubtedly know by now, the fantasy sports industry has been growing for several years.
How much? Led by the big players —Yahoo, ESPN, CBS Sports, Fox Sports — growth from 2007 to 2012 has averaged 12% annually, according to industry analyst IBISWorld, bringing annual profit to an estimated $397 million on $1.1 billion in revenue. The industry’s dominant sports league, the NFL, accounts for over 36% of the action.
Is the fantasy sports industry due to slow down? A little. Hit a wall altogether? No. Fantasy has succeeded in becoming ingrained in the way we consume sports these days. Can you imagine the reaction of NFL fans if Red Zone were suddenly taken away?
IBISWorld forecasts annual growth of 8.8% over the next five years, making fantasy a $1.7 billion business by 2017. The biggest drivers: the proliferation of mobile apps that make joining and following fantasy leagues easier; growth in non-traditional fantasy sports like auto racing, soccer and golf; and milking more money out of female players, who currently comprise 25% of the market but only 10% of the associated spending. “Fantasy sports providers that find a way to cater to this growing but underspending demographic will be well situated,” IBISWorld analysts wrote in a recent report.
Meantime, low barriers to entry have new players entering all the time. There are 295 of them out there, estimates IBISWorld, with further growth expected to take the total to 330 within a few years. Often, the more successful eventually sell out to one of the four major players which, for all their power, still control only 30% of the market. All figures to grow incrementally as the big, revolving door of small players continues to bring in new business.