VIRGIN SPORT SAN FRANCISCO CEO MARY WITTENBERG DISCUSS THE FESTIVAL OF FITNESS, HER FAVORITE FITNESS WEARABLE AND MUST TRY WORK-OUTS

The Virgin brand is synonymous with access and opportunity (see Virgin Galactic). Virgin Sport San Francisco, Richard Branson’s movement to connect people through sport and culture; has created a weekend long event, a Festival of Fitness. Scheduled to take place in San Francisco on October 14th and 15th, the event will have something for everyone; from running and fitness activities to music, art and local fare. JWS had the opportunity to speak with CEO/Chief Exercise Officer Mary Wittenberg about the event, its sponsors, wearables and workouts.

JWS: The company’s stated mission is to “move the world through sport”. How does Virgin Sport define success?

Mary: In the short term, we’ll be looking at the net promoter score; do the participants want to come back. We’ll be looking at sponsorship growth from the first year to the second, participation growth and the strength of the relationships we are able to develop with local, grass roots fitness groups, within the communities. Longer term we’ll be focused on traction gained in adding cities (currently focused on SF & London). 1 million participants in 10 years would certainly be considered a success.

JWS: When selecting sponsors for the event, were you looking for companies aligned with the mission or the most lucrative financial agreements?

Mary: Virgin Group incubates companies and then brings strategic partners in along the way. Who you partner with early on says a lot about your brand. Richard fully funded the company, so we can partner with companies that share our vision (Motiv, Clif, Nuun, Headspace, Flywheel Sports, Classpass). Richard has also always been very supportive of entrepreneurs.    

JWS: ASICS (TYO: 7936) is the founding partner sponsor of the event. Besides the fact that they manufacture shoes and apparel needed for a weekend of sports activities, what makes them a strong partner? 

Mary: ASICS is interested in culture. They wanted to be a co-creator. They are at our side and have a real voice. When you can create with a partner, they are going to be that much more engaged.

JWS: Do you have a favorite in the fitness wearables market?

Mary: I’ve tried a bunch, Apple (AAPL), Fitbit (FIT); I like the watch. I’m excited about the ring that Motiv is working on. I like functional accessories.

Howie Long-Short: For those wondering, a net promoter score is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. The customer is asked just one simple question, “How likely are you to recommend the company/product/brand to a friend or colleague?” They are asked to rate on an 11-point scale (0-10).

Fan Marino: Mary qualified for the 1988 Olympic marathon trials, so she knows a bit about training. I asked for some ways to keep exercising from getting stale. Mary suggested joining November Projects (now in 41 cities) and trying FlyBarre (particularly guys who think ballet when they hear barre).

GARMIN INTRODUCES 3 NEW FITNESS FOCUSED SMARTWATCHES; FITPAY TO SUPPORT CONTACTLESS PAYMENT

Garmin has introduced a new line of GPS enabled smartwatches designed to compete with Apple (AAPL), Samsung (KRX: 005930) and Fitbit (FIT). The line contains 3 watches; the Vivomove HR (fashion focused hybrid), Vivosport (fitness focused) and Vivoactive 3 (feature packed flagship). The Vivoactive 3 will include Garmin Pay; a contact-less payment system, powered by Fitpay, Inc. The watches, which are now available, range in price from $199-$329.99; significantly less expensive than their high-end Fenix-5 series ($600).

Howie Long-Short: Fitpay provides a technology platform that adds contactless payment capabilities to wearable and loT devices. The company is a subsidiary of NXT-ID Inc. (NXTD) which generated $14.3 million in revenue over the first 6 months of 2017, up from $81K over the same period the year prior. Most the revenue increase comes from another subsidiary, LogicMark, the biggest manufacturer of personal emergency response devices in the United States. NXTD acquired the company in 2016 for $20.9 million in cash and stocks with another $6.5 due should the company meet certain milestones over the next 18 months.

Fan Marino: Garmin is competing with Apple, Samsung and Fitbit in the smartwatch space, but has 2 distinct advantages. Their watches sync with iOS, Android and desktop software and they have batteries that can last for a week without recharging. Those aren’t features that I’m looking for, but it’s something to hang their hat on.

Garmin goes after Apple, Fitbit with new line of smartwatches

NBA 2K18 INTRODUCES NEW INTERACTIVE VIRTUAL “NEIGHBORHOOD” GAME MODE

Take Two Interactive (TTWO) has introduced Neighborhood, a new virtual game mode never seen in a sports video game, for NBA 2K18. Neighborhood enables game players to take command of their virtual character (MyPlayer) and bring it in to the “real world”, experiencing everything from haircuts to gym workouts. The Neighborhoods system will work seamlessly with MyCareer, MyPark, and Pro-Am modes; giving the game player the ability to improve their MyPlayer. NBA2K 18 is scheduled to be released on September 19th for Windows PC, Xbox 360, Xbox 1, PS3, PS4 and Nintendo Switch.

Howie Long-Short: TTWO increased earnings 36% for Q1 ’18, despite not releasing a single new game. Perhaps even more impressively, recurrent consumer spending was up 71% YOY. Recurrent Consumer spending, a term used to describe in-game sales made after the initial purchase, made up half the company’s digital net sales for the quarter.

Fan Marino: We now live in a world where people send their MyPlayer to the gym, but don’t workout themselves. What a time to be alive!

NBA 2K18 Introduces A Brand New Experience Called ‘Neighborhood’

VIKINGS/SAINTS LOWEST RATED MONDAY NIGHT FOOTBALL OPENER EVER; ESPN2 AIRS SPANISH BROADCAST OF MNF

Ratings for this past Monday night’s Vikings/Saints and Broncos/Chargers Monday Night Football games (DIS) have been released and viewership numbers have slipped once again. The early Vikings/Saints game drew 11.4 million fans, down from 13 million last year and 13.6 million in ’15; while the late game between the Broncos and Chargers saw 9.9 million people tune in, making it the least watched MNF game since 2007. MNF capped a bad weekend for all the NFL broadcast networks (CBS, FOXA, DIS, CMCSA), as 6 of the 7 game windows saw multi-year ratings lows.

Howie Long-Short: ESPN, for the first time, introduced a Spanish simulcast of MNF. The cable network will continue to use the ESPN Deportes feed on ESPN2, for the next 8 MNF games. The move to ESPN2 will give the broadcast reach as the cable network is in 88 million homes, compared to just the 5.9 million Hispanic households with ESPN Deportes. While the Spanish audience isn’t going to make up for league’s overall viewership issues, the live broadcasts will do better than the poker reruns ESPN2 ran opposite MNF last season.

Fan Marino: ESPN Deportes reporter Sergio Dipp went viral for his report during ESPN’s English broadcast. Real tough spot being asked to do a live stand-up in a second language. At least the guy had a sense of humor about it.

NFL Ratings Week 1: MNF Completes Rough Opening Weekend

WARRIORS SIGN NBA’S LARGEST JERSEY SPONSORSHIP DEAL; TWICE THE VALUE OF THE LEAGUE’S 2ND LARGEST DEAL

The defending Champion Golden State Warriors have inked the league’s largest advertising patch deal, signing a 3 year $60 million agreement with Rakuten (OTC: RKUNY); twice what Goodyear (GT) will pay Cleveland (league’s 2nd largest deal). As part of the deal, Rakuten will also have naming rights to the teams practice facility and receive 6 other designations (i.e. the official e-commerce partner), that span longer than 3 years. Golden State had stated it was crucial they partner with a worldwide brand, to grow their global vision. The Apex Marketing Group, a sponsorship evaluation firm, has estimated RKUNY could expect to receive $32-37 million worth of exposure from the sponsorship this season.

Howie Long-Short: Rakuten, a Japanese company that owns Ebates, Viber & Kobo, is betting on a future without apps. Their gaming company, Rakuten Games, delivers titles that can be played on web browsers; as opposed to requiring installation on phones or PCs. RKUNY sees a $50 billion mobile gaming market and wants a slice. With 114 potential users in its database, I wouldn’t bet against them taking it.

Fan Marino: This is the 2nd major sports marketing partnership that Rakuten has signed within the last 60 days. The company is paying $262 million (4 years) for the rights to have their name appear across the chest of FC Barcelona jerseys. It is now a matter of when the other U.S. pro sports leagues (NFL, MLB, NHL) will implement jersey sponsorships. There is far too much money being thrown around, for those league’s owners to sit idly by. 

Warriors sign jersey-patch advertising deal with Rakuten

SONY ANNOUNCES UPCOMING RELEASE OF ACTION CAMERA TO COMPETE WITH GO PRO MODELS

Sony (SNE) has announced it will be releasing a new shock proof, crush proof, action camera to compete with GoPro (GPRO). The 1.0 inch 15.3 MP RX0 should deliver superior image quality, as its sensor is bigger than any of GoPro models currently available. The camera shoots video in 4K, is waterproof up to 10 meters and captures slow motion at up to 960 frames/second with a resolution of 1920x1080p, a feature not typically found in a camera priced under $1,000. The RX0 will cost $700 and is expected to ship in October.

Howie Long-Short: GPRO is facing strong competition from Sony, Canon (CAJ), Apple (AAPL) and Samsung (KRX: 005930) in the action camera space and still managed to grow revenues 34% YOY in Q2 ’17. They have the #2 selling drone brand in the U.S., a pilot going for a device designed to capture fully immersive VR content and a mobile editing app that has seen usage increase 112% YOY. I don’t see the RX0 putting a damper on GPRO’s recent momentum.

Fan Marino: The GoPro Hero5 Black is $399. It is roughly the same size as the RX0. For $50 (case) it’s nearly as durable. The control options are slightly different, but each has their benefits. The big difference is the slow-motion capability on the RX0. Is that worth $300? Not for me.

Sony’s latest competitor to the GoPro is a cute black box

CHURCHILL DOWNS ADDS EUROPEAN ROAD TO KENTUCKY DERBY; LOOKING TO STIMULATE INTERNATIONAL INTEREST

Churchill Downs (CHDN) is making changes to its “Road to the Kentucky Derby” Championship Series; adding a path to the race for European horses, as it looks to stimulate international interest in the 2018 race presented by Yum! Brands (YUM). The “European Road to the Kentucky Derby” will consist of 7 races, with the horse accruing the most points winning an invitation to the race. Last year, CHDN introduced a path for dirt racing horses based in Japan, to participate in the fastest 2 minutes in sports.

Howie Long-Short: Horse racing is one of 4 sports that can be legally gambled on in Japan and as of 2016, that includes on foreign races. In 2015, the country waged $22.5 billion on the ponies and CHDN wants some of that juice. Expanding the Japanese series is only going to get that audience more invested in May’s run to roses.

Fan Marino: Don’t expect a horse that races on foreign soil to win America’s greatest race. It’s been 46 years since Canonero II (Venezuela) won the Kentucky Derby.

Churchill Downs Adds European Path to Derby

NIKE UTILIZING ELECTROADHESION TECHNOLOGY TO CREATE SNEAKERS; INVESTOR IN, CLIENT OF GRABIT

Nike (NKE) has begun to implement GrabIt robots that utilizes the cling of static electricity, to produce sneakers in both Mexico and China. The robots, designed to stack fabric, can precisely stack and fuse the upper parts of a sneaker in in 50-75 seconds; work that would take a human 10 minutes to complete. Within an 8-hour shift, a machine monitored by a single employee can produce between 300-600 pairs of shoes. GrabIt’s electroadhesion technology is so diverse, it can handle an egg, soft fabric or a 50lb. box. Shirt manufacturers are already lining up to purchase the GrabIt robots that can do collars and cuffs, scheduled to be released next year.

Howie Long-Short: While GrabIt remains a privately held company, Nike (NKE) is a minority investor, having participated in their Series A round 4 years ago. The company estimates that the apparel industry is a $200-$300 million market for robotics makers, but sees e-commerce as an even bigger opportunity. GrabIt sells software guided electroadhesive conveyer belts for urban warehouses.

Fan Marino: I am fully supportive of any endeavor that would reduce/replace the cheap labor found in Asia with higher quality/paying jobs in the U.S.

These Robots Are Using Static Electricity to Make Nikes

RONDA ROUSEY CLOSE TO JOINING WWE; RUMORS CIRCULATING OF INVOLVEMENT AT SURVIVOR SERIES AND WRESTLEMANIA

Rumors are circulating the Ronda Rousey has been learning the basics of pro wrestling and will be joining the WWE; taking part in at least 2 high profile matches over the next 6 months. Rousey was recently filmed attending the WWE’s Mae Young Classic tournament and recently cut her first promo challenging Charlotte Flair. The most likely scenario at this point is that Rousey will take part in a Four Horsewomen vs. Four Horsewomen match (WWE vs. UFC) at Survivor Series and then either Stephanie McMahon (Vince McMahon’s daughter) or Charlotte Flair (Rick Flair’s daughter) at WrestleMania.

Howie Long-Short: WWE has 1.63 million subscribers, which is nothing to sneeze at; but that number is far short of the 3-4 million the company predicted back in 2015. The company only added 220,000 new subscribers between Q4 ’16 and Q2 ’17, so they need to do something. Rousey is a great addition, but she isn’t getting the company to 3 million subscribers by herself. She’s never done more than 1.1 million PPV buys.

Fan Marino: Apparently, the WWE is looking to bring the Undertaker back to wrestle John Cena at Survivor Series. It’s hard for me to be excited about the future of WWE as a company, when two of their biggest draws are 52 and 40, respectively. Brock Lesnar, another huge draw, is also 40. At some point, they need to find young talent who can move the needle.

Ronda Rousey is ‘secretly being groomed’ to move from UFC to WWE – and we are so here for it

ZIPWHIP PROVIDES FSU ATHLETICS BOX OFFICE WITH TEXT MESSAGING CAPABILITIES

Florida State University’s athletic department has been able to accelerate its ticketing sales cycle by adding text messaging to the process. Using ZipWhip to give its box office phone number text messaging functionality; FSU has seen an increase in the percentage of responders to their outreach, faster response times and increased conversation rates. ZipWhip technology enables two-way texting between businesses and their customers, while the underlying platform facilitates the conversation much in the same way that Outlook or Gmail does for email communication. The company has increased reoccurring monthly revenues by 60% over the last 10 months, picking up clients in a variety of phone intensive industries (i.e. insurance, medical, auto sales).

Howie Long-Short: You can’t invest directly in ZipWhip; as it remains privately held, but Microsoft Ventures participated in both their $9 million Series B funding round as well as the $22.5 million Series C round that was just announced. Microsoft Ventures is the corporate venture capital arm of Microsoft (MSFT).

Fan Marino: Mobile Marketing Watch has indicated that while only 20% of emails are opened, 98% of texts are. I need to meet the 2% of people who have the discipline to avoid checking their text messages when that little number icon appears, because I don’t believe they exist. Of course, if I start getting text messages offering me erectile dysfunction medications, I’ll stop checking my texts too.

Texting is Helping Florida State Win Off the Field