The Impact of Information Communication Technology on the Entertainment Industry: An Exploration of the Digital Influence on Revenue and Attendance

Abstract

As Information Communication Technology (ICT) continues to develop, it is important to account for its effect on not only technology-producing sectors of the economy but also those industries that utilize technology in their daily operations. This study examines the growth of ICT and how it affects ticket revenue and attendance measures in the NFL and NBA. Professional sports is a financially viable and culturally visible part of the entertainment industry in the U.S. It was hypothesized that ICT growth would detract from ticket revenue and attendance as the multitude of platforms and increasing digital quality renders attending a live event less crucial. Regression analysis comparing leagues presents general trends of a negative relationship between ticket revenue and ICT and a positive relationship between attendance and ICT. This can be accounted for by the prevalence of the secondary market and the availability of comprehensive as well as last minute information. It can also be accounted for by divergent fan commitment and/or season characteristics (length and location) between the leagues. Regional comparisons within the NFL and NBA produced inconclusive results but could hint towards differences in technological diffusion between regions and/or fan enthusiasm due to market size and historical success of the team in question. This study proves useful in determining how the traditional business models of the NFL and NBA react to technological development.