By Alex Waldrop, President and CEO of the NTRA
Last week in Tucson, I got the chance to speak to another group of engaging young people preparing for careers in the racing industry as part of the University of Arizona Race Track Industry Program's Joe Hirsch Speaker Series. Interacting with young people about industry issues is always interesting, but in times like these, it is also a balancing act. I want to encourage their interest, but I also feel obligated to give them an honest assessment of the challenges that we face.
I spoke to three classes for a total of almost six hours over the course of two days. It was a great chance to talk about the future of our business and also listen to the perspectives of individuals questioning the long term health and viability of our industry for professional and personal reasons. Here is some of what we discussed.
First, we candidly discussed external threats to the horse racing business, including a severally damaged economy (nationally, one out of five working aged men are unemployed) and the spread of competition for the gambling dollar. (Native American gaming has now surpassed commercial gaming nationally.) We also talked about internal weaknesses in our business model such as excessive state economic regulation and taxation, a simulcast pricing model that in some cases favors distributors over producers and a takeout rate that big players think is too high.. We also discussed the challenges presented by safety and integrity concerns associated with horse racing.
But it all became real during one of my lectures when a student had the courage to ask the burning question on the minds of many of his fellow classmates, "Where will this industry be in five years?" In other words, I surmised, "Am I studying for a career in the wrong field?"
In response, I cited the many strengths of horse racing. I referenced a recent Harris poll which echoed NTRA polling in showing that horseracing is still one of the 10 most popular sports in the nation. I cautioned the students against believing the naysayers who proclaim that racing is "dying." As I explained to the students, industry insiders can be very negative on horseracing for a variety of reasons, but the public still loves horse racing and views it as an exciting, challenging sport. ( I cited the anticipated Rachel vs. Zenyatta matchup as just the latest example of this.) We also have a solid number of core fans who are passionate about our game/sport, and clearly they want to help the industry find its way out of its current economic challenges. Like so many other sports and industries, our challenge is to find the right business model for the future.
To that end, I walked them through the NTRA's Web 2.0 marketing strategy. I explained that several factors led the NTRA to completely rethink its approach to marketing in the future. First among these is the real need for reform in our business, especially in the areas of safety and integrity. Couple this need for reform with both the ever shrinking availability of mainstream media coverage for any sport, not just horse racing, and dwindling advertising and sponsorship dollars and you have a recipe for problems not just for horseracing but throughout the sports marketing world. Even the seemingly invincible NASCAR is experiencing a serious decline in revenues in this environment.
Against this backdrop, the NTRA is championing new strategies using the Internet to create channels to interact directly with fans. We are partnering with fans to develop meaningful reforms such as the NTRA Safety & Integrity Alliance, and we are empowering fans to help execute reform and marketing plans - peer to peer, bottom up rather than mass media and top down. This is the essence of any effective Web 2.0 strategy.
To support this Web 2.0 strategy, we are employing our Washington D.C. -based public affairs team to protect and grow the right of horseracing to conduct legal, regulated online wagering on our sport. This unique wagering platform is a key to securing horseracing's economic future and our ability to adapt to the changing media environment. It is the one area of our business that continues to grow in spite of the economy.
To solidify our fan base which is increasingly moving online, we have to become more accessible, collaborative, and open to change. Web-savvy fans value social media. They are passionate, and they want to help. But as an industry, we have to listen and respond. That is why I write this blog (almost) weekly. Blogging is a vehicle to engage in the ‘give and take' so necessary to reach fans where they live. Facebook, MySpace, Twitter and other social media are also a big part of our marketing future.
And online polling will continue to provide us with the knowledge and input so necessary for good decision making. At the NTRA, no decisions are made these days without input from, or consultation with, fans--including horseplayers.
Is it our only marketing strategy? No, there is still the always important live racing environment where most new fans are created. But it's Web 2.0 that will help move a new generation from casual to core fans.
Where will we be as an industry in five years? Well, as I told the students, businesses that are unable to transition to a business model that successfully incorporates the Internet may not survive - think music and video stores and daily newspapers. Fortunately, horse racing has the business model to make this transition and the early steps look promising. We have the product, we have the fans, we have the online wagering data and platforms and we have the Web 2.0 strategy to succeed. It's up to us to execute on that strategy to secure our future. I remain confident that we can and we will survive and prosper in this changing environment.
How about you? Where do you think racing will be in five years?