Old-time tradition-laden sports like Major League Baseball and horse racing habitually struggle to attract the next generation of fans.  And today’s consumer has lots of choices from a growing assortment of leisure and gaming activities.

Facebook (parent company = Meta Platforms) is a high-profile case-in-point in how not even a company with a huge free cash flow to protect and enhance its brand equity and fend off competitors is guaranteed continued success in a highly disruptive marketplace.  Last week, Meta Platforms reported that Facebook experienced its first-ever decline in daily active users, negative 5.7% to be exact.  As a result, its stock immediately plunged by 26% or $230 billion. This is the largest loss of market value ever experienced by an American company in a single trading day.

Facebook co-founder Mark Zuckerberg, in his conference call reporting fourth-quarter 2021 operating results, made it clear that Facebook is feeling the effects of upstarts like Chinese-owned TikTok and Snapchat.  Such social-media platforms have great appeal to younger people and are hip alternatives to stodgy Facebook and Instagram.  For example, 25% of TikTok’s active users are aged 10-19, 22.4% are 20-29, 21.7% are 30-39, and 20.3% are 40-49.  In sum, nearly 90% are less than 50 years old. 

Increasingly, younger people consider Facebook to be a social-media forum for parents and grandparents…and that is a looming threat to Facebook’s future.  This concern is driving Meta Platform’s metaverse strategy of virtual reality.

On a much smaller scale, horse racing’s major perpetual problem mirrors that of Facebook: How to attract younger fans to a sport that, accurately, has the image of being a pastime for older people.  With sports betting spreading across the United States, the competition for younger players will be more intense than ever.

Moreover, American race purses are supported by slot machine revenues at racinos.  This source may dry up, either through government decoupling of racing and slots or as slot machines lose popularity among tech-imbued younger generations who may find slots to be a boring form of recreation.

Meta Platforms recognizes that it has a “growth” problem and has proactively developed a plan to address it. Likewise, the horse racing industry has long known it has a demographic problem that imperils its future but, unlike Meta, it lacks a deep-pocketed centralized authority to formulate, fund, and implement a way forward. And that itself is a monumental problem.

Copyright © 2022 Horse Racing Business