The ASP: It's on but who's watching?
Of the multitude of words written about the recent changes to the ASP the most poignant statement I've read was this: It used to be that the ASP supported the surfing brands, but now the ASP is the brand. It's a simple concept, but not easy to envisage. Perhaps that's because for the last twenty years the surf brands pulled rank on the ASP, they owned professional surfing and that relationship is all many of us have ever known. But as of this year that relationship has been radically altered.
So say what you will about the new webcast, or the big wooden desk the presenters sit behind, or the many other changes taking place, it's the creation of the ASP as its own branded entity that is the beating heart of the transformation. Surfing's peak body has gone from a passive, non-profit organisation to a privately-owned company that's subject to the same commercial forces as any other. And just like other brands it must now sell itself and turn a profit for ZoSea, the company that owns the ASP.
It's quite a departure from the ASP of old. Since its inception the economics of professional surfing didn't necessarily have to add up. Of course contests had to be paid for, yet the return on investment by sponsors was always a somewhat amorphous figure, never able to be quantified in monetary terms but arrived at by gut feel rather than exact metrics. During the surf booms of the 1980s and 1990s, when surf culture was largely homogenous and media channels few, it could be assumed that the investment was worth a company's while.
A short history lesson...
In Australia during the 1980s surfing was a euphemism for youth culture and many companies, even non-endemics, wanted to align themselves with the only organised form of the sport – professional surfing. Surf contests were regularly featured in the mainstream media and surfers appeared likely to crossover into legitimate mainstream sport stars. It could be argued that a few surfers, namely Tom Carroll, Cheyne Horan, and Pam Burridge actually did.
All that changed in the mid-1990s. In 1996 Sid Cassidy was ousted as head of the ASP and with him the vision for surfing's mainstream acceptance. To be fair, it'd become obvious surfing wasn't going to challenge for mainstream supremacy; a global recession saw non-endemic sponsorship wane and viewer friendly sports such as surf lifesaving fill the breech for the Saturday afternoon recliner chair mob.
Yet from that crisis professional surfing experienced its halcyon years - the Dream Tour was born. The rivers of gold running into the surf industry trickled down to professional surfing, and the surf companies could afford a World Tour that resembled a 'round-the-world freesurfing trip: Snapper, Fiji, Teahupoo, Mundaka, Hossegor, Hawaii. But despite the good times the seeds for professional surfing's most recent crisis were also laid during this period.
Run almost solely by the surfing companies the World Tour became a de facto marketing arm for said companies. Operating costs were large yet they were signed off in the ephemeral name of advertising. As far as financial accountability goes it's impossible to say whether the World Tour provided sufficient return on investment to those that supported it. They did however stick with it a long time.
Until webcasts came along there was no reliable way to know how many people viewed the contests, and even then the numbers were largely kept secret. When they were mentioned it was often by presenters indulging in pre-match hyperbole: “We're going out to millions of viewers around the globe today!” At certain contests viewer numbers were visible on screen and they were significantly lower than the broadcast seven figures. For instance, when John John Florence beat Jamie O'Brien in excellent waves at the 2012 Volcom Pipe Pro the concurrent viewers wavered around 20,000. The problem was that webcasts often had multiple streams and there was no way of knowing exactly how many viewers were on each stream. Was it 20,000, or was it many more times that figure? One could suspect but there was no way to know for sure.
Whatever the numbers were by 2008 the webcast was the dominant interface for surfers to interact with professional surfing. Print information lagged, television did too, surfers wanted action instantly and the companies obliged with ever improved webcasts – the quality and functionality leapt forward. But then the GFC hit and suddenly the contest-as-marketing-tool wasn't quite as viable for cash-strapped surf companies. As their fortunes declined so to did the health of the World Tour and in 2010 a Rebel Tour was touted. The ASP desperately fended off that threat but further advances came. When in December 2012 ZoSea finally acquired the ASP it was rumoured there were four other parties also showing interest.
And that brings us to the opening line of this article about the ASP becoming its own brand. With the surf companies stepping aside the ASP oversees competition, as it always has, but now it also controls the commercial side. To succeed, its business model must run similar to those other three letter acronyms: NFL, NRL, AFL, NBA. Professional surfing always had a whiff of the magical scam about it but those days are gone. When it was acquired by ZoSea the ASP stepped out of surfing's cultural embrace and into the rational world. It exposed itself to the same market forces as every other league and syndicate sport where tradition counts for little and audience numbers mean everything to a potential sponsor. But let's slow down a moment, we're not quite there yet...
Fortunately ZoSea found a backer to provide seed capital allowing the new system to find its feet in its harsh new environment. Floridian publishing billionaire Dirk Ziff is the guy who's stumped up the cash, and fortunately he is a billionaire because back-of-the-napkin figures put the annual Men's tour cost at $50 Million dollars alone. The ASP, with Ziff's backing, has also acquired the Women's tour, the Big Wave World Tour, and at the time of writing this article news broke that they'd acquired the XXL Big Wave Awards. The ASP has bought all this for nix, it was a bailout to be sure, but running costs are in the ballpark of $100 Million a year. No-one knows how much seed capital will be provided by Ziff nor how long it will run. Swellnet asked the ASP but got no response. But whatever the outgoing costs are even billionaires have their break point. The new ASP needs to start making serious bank.
Their account received its first deposit when Samsung Galaxy secured the World Tour naming rights twelve days before the beginning of the 2014 tour. It's unknown how much they paid but tellingly the first press release went out stating Samsung (the brand) were sponsoring the tour. That was quickly replaced by a press release declaring the sponsor as Samsung Galaxy (the product). Also, just three days before the waiting period of the first competition, the Quiksilver Pro Gold Coast, there wasn't a single Samsung advertisement to be found. Both examples indicate this was a last minute deal and not the financial elixir the ASP would've been hoping for.
On paper it appears ZoSea have the talent to make contest surfing profitable. CEO Paul Speaker is a one-time Director of Marketing at the American NFL and past President of Time Inc Studios. Terry Hardy, aside from being Kelly Slater's manager and architect of the first Rebel Tour, has a long and successful history in action sports and entertainment. They have the connections, wherewithal, and importantly, the start up finances to make a shake of it.
They've made no secret of their tactics either. In an April 2013 speech Paul Speaker said: “In the last five years the landscape has changed dramatically. Online is as powerful as broadcast in linear television.” In the same speech he elaborated on the importance of a uniform, centralised broadcast system. In short, a slick webcast package that matches the best live sport productions.
Live action. Real time viewing. It's how 99.4% of sports events on TV are watched according to Disney CFO Jay Rasulo in a recent Forbes article. Bob Garfield of On The Media concurs: “You can watch Breaking Bad in real time or time delayed on your DVR or you can get it through Netflix and you can binge on it, but that’s not how people consume sports. They consume it in real time.”
Above all, surfing as a live sport just seems to make perfect sense. It's dynamic and captivating, offering a melange of bare skin athleticism and blue sky visuals, the perfect mix for surfers, voyeurs, and vicarious outdoorsmen. And according to various reports the worldwide surfing population numbers in the tens of millions. In Australia alone the Sweeney report stated there are 2.5 million surfers, yet in a 2010 interview Surfing Australia CEO Andrew Stark estimated there were another half a million to a million above that. In 2012 the Kelly Slater Wave Company (of which Terry Hardy is also a director) stated there were 35 million surfers worldwide, 12.5 million in the US and 6 million in Australia. If those numbers appear fanciful then remember Slater was trying to present the best possible case to potential buyers of his product. And the ASP is trying to do the very same thing.
Whatever the exact number, the global surf population could safely be stated as in the 'millions'. But the crucial ratio is just how many of them care enough about professional surfing to watch, because both you and I know that recreational surfing and organised professional surfing are two very different things. It doesn't follow that just because someone surfs they'll also be interested in competition. Are the people who are being sold surfing aware of this schism?
At the beginning of 2014 the ASP launched their new webcast and began streaming the production through YouTube. Importantly they were using adaptive bitrate streaming, meaning they only needed to provide one stream for the English speaking webcast. And because it's on YouTube the concurrent viewer numbers were available to the public for the very first time. It became possible to see the peaks, the troughs, and the patterns of watching. Swellnet recorded the data at five minute intervals on each competition day of the Australian leg. The results make for a fascinating examination.
Before continuing it needs to be noted that this is not total audience but snapshots of the audience number at fixed times. It's the same method used by the television industry to measure viewership. When OzTam reports the men’s Australian Open tennis final was watched by 2.34 million people – an actual statistic from this year – they are referring to the same metric. Also, these numbers don't include the Portuguese stream, which is the only other stream available. The Portuguese figures were roughly one tenth of the English stream at all times so to get totals simply add 10%. Lastly, Fuel TV is the only other place to watch the World Tour live. We have no way of knowing what their audience is but as their broadcast is sporadic and unreliable – they cut to a skate show two minutes into the Margaret River Pro final – we can assume it is low. Certainly much smaller than the webcast figures. And with that out of the way let's look at the numbers.
Of the three Australian contests the peak concurrent viewership was 47,000 during the Quarter Final heat between Kelly Slater and John John Florence at Bells Beach. The second highest figure also included Kelly Slater, that time versus Nat Young in Round 5 at Snapper Rocks with 41,123.
The finals of each three Men's competition rated thus:
Snapper Rocks – 32,633.
Margaret River – 25,781.
Bells Beach – 40,417.
For perspective, the global audience of the Bells Beach final was 1/60th the domestic audience of the Australian Open tennis final. It's also just 0.001% of the global surfer population as stated by the Kelly Slater Wave Company. The Margaret River final was 0.0007%.
Interestingly, for each of the contests the highest rating didn't occur during the final, but that's probably only because Kelly Slater didn't make a final. The highest rating in each contest occurred during one of his heats.
The men averaged around 20,000 concurrent viewers through all three contests, though that number jumped significantly whenever Slater surfed. Typically the figures would rise 25%-30% just before his heat and drop off soon after. No other surfer, whether they be current World Champion (Mick Fanning), or reigning event champion (Adriano De Souza at Bells Beach), or event local (Joel Parkinson at Snapper Rocks), affected the viewing pattern anywhere near as much as Kelly Slater. In fact, no discernible pattern could be found for any other surfer.
In total Swellnet recorded over 2,100 data points which could be used to determine much of the ASP's live viewership, at least as it stands at this point in time. I've selected just the above information as it highlights a few crucial aspects of the ASP's brand, especially as it pertains to its online presence.
The first is that ASP webcast viewership is much lower than what most people expected. When I spoke to surfers who watch the webcasts they were surprised by the figures. This could probably be attributed to the false consensus effect, whereby people tend to think they're in a majority believing many other people are doing the same as them. Social media amplifies false consensus; surfers link in with like-minded surfers on Facebook or Twitter, they share similar values so end up having their own values reflected back at themselves.
Although we can't know the ASP's total reach those concurrent numbers make it abundantly clear the fabled “millions of viewers” remains just that – a fable. Even for below the line advertising – more suited to smaller, niche audiences – the diminutive figures would present a real challenge.
For this article I spoke to the Managing Director of a Sydney media buying agency. Although he didn't want to be named he was happy to offer his opinion on the ASP audience. Based on the figures Swellnet provided, he believes the ASP “will struggle breaking even at this stage.” There are many ways to slice the figures but using the tidy metric of total reach he anticipates they'd need to reach 5 million people per event to break even. That's across various touch points: online, on site, and on air. To achieve the requisite 5 million eyeballs, “The media coverage would need to be vertically integrated - online, television, and the press.” And who does he think could achieve this for them? “News Corp springs to mind as a potential long term global media partner for the ASP.”
However, in his view it'll be a very difficult sale: “Surfing is at best a third tier sport around the world.” It hasn't always been that way though, remember the history lesson when surfing flirted with the mainstream? For the ASP to revisit that territory it needs to elevate the sport and expose it to many more viewers. Clearly it can't rely on existing viewers to meet that end.
Another factor to consider is the viewing pattern around Kelly Slater. Yeah, no surprises there. Yet Slater is 42-years-old and will retire within the next few years, so the role that he plays within the ASP will be crucial to its development as a brand. It's also worth noting that celebrity trumped competition in every Australian event. Online viewers cared less for the theatre of sport than they do the actors who tread the boards. The ASP needs to heed that information and somehow harness it into their brand building. And they'd better do it quick because, Kelly Slater aside, whatever they're doing now isn't working.
The aforementioned points assume an approach where the ASP brand is built to increase its viewership and match its current operating costs. The following is the inverse, it assumes the current viewership remains static and costs are brought down.
Over the last two years there's been a correction occurring across the whole surf industry. Sponsored riders have been cut from teams and paycheques reduced for all but an elite few. Of course this follows from the downturn in the surf industry, but as it was the surf industry who built up the World Tour to its current state, perhaps a corresponding recalibration of the tour – less prize money, less infrastructure, cheaper contests – could be in order. As the numbers show there appears a profound imbalance between running costs and the amount of people who care enough to watch it live (note: heat analyser falls outside the ASP business model as it sidesteps sponsor ads).
In the past a voluntary contraction – call it an 'austerity measure' to tie in with world economic events - would've been a hard sell to the surfers, but as they don't own the ASP anymore they'd have no say in such changes. If ZoSea can't secure ongoing sponsorship what else will they do? With the acquisition of the Big Wave World Tour and XXL Awards, two ventures that arguably have the potential to reach a larger audience than the World Tour, then support may come from those quarters. Live broadcast, however, will present an even bigger challenge than the World Tour.
Over the next few years the ASP will focus on building their brand, yet as we've shown the webcast numbers are a long way short of being meaningful to potential sponsors. The new ASP has now run three World Tour contests and it's safe to say only pro surfing tragics - those who've always watched the sport - are tuning in, plus the occasional celebrity obsessed punter when Kelly dons a vest. For the ASP to survive they'll need to greatly increase their fan base or else reduce their operating costs.
The next two years are crucial to the health of the ASP, yet whichever way it goes - boom, bust, or stagnate - the idea of pro surfing will always remain. For every surfer who takes the Phil Edwards line that contests “lead surfing away from its basic purpose of man against wave,” there's a horde of talented kids wanting to show they're the best surfer in the water. And there'll also be those - perhaps only a few – wanting to watch them.
For this article Swellnet contacted the ASP between contests but received no reply.