Kenton Williston: Welcome to the IoT Chat, where we explore the trends that matter for consultants, systems integrators, and enterprises. I’m Kenton Williston, the Editor-in-Chief of insight.tech. Every episode, we talk to a leading expert about the latest developments in the Internet of Things. Today, I’m talking about how tech technology is transforming event venues with Joe Costanzo, CTO of PMY Group.
Even before the pandemic, attendance at sporting and other in-person events was already on the decline. And it’s easy to see why. With so many at home entertainment options, nobody wants to pay big bucks just so they can stand in long lines or deal with crowds. And that’s why PMY is helping venue operators see what’s happening in real time so they can create better experiences, whether that means opening more food stands or directing people to shorter bathroom lines. I’m excited to hear how it all works. So, Joe, I’d like to welcome you to the podcast.
Joe Costanzo: Thank you.
Kenton Williston: Can you tell me a little bit about PMY Group and your role there?
Joe Costanzo: PMY is a global technology-solutions company. We really specialize in technology transformation for sporting organizations, major event organizations, and venues. The company’s got a couple different lines of business around strategy, understanding your technology strategy, and master planning and concept design. We have a software platform that is really focused on real-time venue operations and intelligence and data fusion. So a couple of different things that we do, but all together it’s really about helping you transform technology in sports and entertainment.
Kenton Williston: Nice. And what got you interested in this space? You a big sports fan? Or what’s the draw?
Joe Costanzo: Yeah, I am a big sports and music fan, but I really got into this space in 2008, 2009, really with emergence of the iPhone and mobile connectivity. I was working in the business-intelligence space at a company that I co-owned, and we had some resort customers, and they started asking about, “With these new mobile devices, can we understand what people are doing, how they move around our resort?” That started channeling me into the sports and entertainment space, and then a decade of just working in technology, seeing how it’s been adapted in the sports and entertainment space and continually trying to evolve with it.
Kenton Williston: So that’s a really interesting history, and interesting to think about how the advent of smartphones really changed how the hospitality sector is thinking. And I think that’s true in every aspect, but of course, things have been changing a lot here in the last couple years as well, thanks to the pandemic. And that’s really had an impact on all kinds of in-person events. So how has that forced the customers you serve to evolve? What are some of their key pain points? What are some of the key things they’re doing to change how they attract and serve their audiences?
Joe Costanzo: I think it’s interesting. The stadium-market landscape has really evolved, as I was saying, pretty dramatically over the last 10 years, really as a result of these significant advancements in technology. When you’re at an event, that’s really probably the truest reflection of you as a person or a consumer, is that little bit of time that you get away from being who you are professionally, being who you are at home, you become the average Joe, I like to say. But look, the COVID pandemic I think has both disrupted some things, but it’s also accelerated, in what we’re seeing, the rate of adoption. There’s a baseline consumer expectation right now, whether they realize it or not, around ensuring a safe and secure event. So a lot of things that we were seeing around crowd intelligence, around smart and connected stadiums, was a lot of conversation, pre-pandemic.
I think a lot of people were accepting of what is a connected stadium, accepting of crowd intelligence, but not really ready to take the leap of faith, so to speak. It’s really accelerated during COVID. So we saw a lot of venues and events and event owners step back and take the time to start focusing on technology, because they didn’t know what it was going to be like when the crowds came back and they felt, and rightly so, technology would help. And we’ve seen a lot of the health and safety concerns that can be leveraged through technology as a starting point.
Kenton Williston: So it sounds like almost more than new technologies coming to the market, it’s really about these things moving out of a, “Yeah, this is a good idea” stage to a, “This needs to be deployed today” stage. In light of that, what are some of the big ones that you’re seeing deployed? It sounds like crowd management’s a big one. You have a top-five list of what folks are looking for right now?
Joe Costanzo: Yes and no. I think what I would say is that what we’re seeing is technology focused around what we would probably say is four pillars. The need or the desire to connect with the audience, to just create and maintain a digital connection with fans, and begin to develop these comprehensive understandings of your audience based on data insights. And of course, to do that, you have to have the ability to acquire that data. But people are looking more and more around what I would say maybe is the second pillar, around the enhancement of the fan experience and the passion that people have and are bringing back to the sporting events. So being able to enhance that experience via multiple digital touchpoints, interactive content, immersive experiences would start to touch on AR and VR and, around that, trying to engage the fan that isn’t there on site.
Of course, even before the pandemic, there was this pillar around safety and security and a user-friendly event. I would say that’s the one that has really elevated itself. And the goal there, I think, is leveraging emerging technologies to deliver that safe and secure event—seamless actions like frictionless entry for operations, both inside and outside the venue. When you’re inside, being able to get food and beverage, have it delivered to your seat, or order from your seat and go pick it up, or understanding, “What’s the quickest route to get to the restroom or the bathroom, get my beer and hot dog, and get back to the seat so I don’t miss my event?”
And then I think finally, what we see as maybe the fourth pillar is, “How do I use this technology to increase revenue and profitability?” It’s not just enough to get back to the revenue that we saw pre-pandemic, because people have lost seasons, they’ve lost years of revenue stream. It’s really about, “How do I increase that revenue? How do I increase that profitability now so that I can make up for some of those losses, and how can I use technology to do that? How can I build positive commercial outcomes via whether it’s partnerships, commercial, or just opportunities for me to transact more seamlessly with my fans?” So I would say it’s really around those four pillars, and they have to be supported by some enabling technologies.
Kenton Williston: I want to talk about those enabling technologies a little bit. A lot of the pillars you’re describing here sound like they’re things that would really heavily depend on AI and computer vision. So I assume that’s one of the key enabling technologies. So can you tell me a little bit more about what you’re doing in that area, and any other key technological areas that are really critical?
Joe Costanzo: So when we talk about technology transformation with our venues and our venue owners and operators, it can be a little bit overwhelming when we start talking about the tech stack. So, what we’ve seen the way to make it easily consumable is to break it down into four key areas. Connectivity, immersive experience technologies, data and analytics (which of course encompasses AI), and then safety, security, and operational tech. When we say connectivity, I think the first thing that comes to most people’s mind is wireless, like Wi-Fi, 5G, small cell, but it’s really around the core infrastructure that’s so critical to enabling this sophisticated venue-wide connectivity that is needed for technology.
So if you think about the need for power, everything has to be powered, the need for massive cabling projects, such as having enough fiber optic, having enough copper. Then what this does is it puts you in a place, if you build the right IP and communication places and spaces, that you have this scalable future-proof infrastructure. So it’s not the sexiest thing to talk about, but we’ve seen it’s the place where even in new builds that we see the most failure is around not enough power, not enough fiber optic, not enough cabling. And on day one, if you don’t have that in place, then it can be as simple as, “We had a cut in the budget, so instead of putting data and power every meter, we’re putting it every three meters.” And it can be as simple as, “Well, we needed it up on the ceiling because that’s where our LED displays or IPTV is going to be, but it was down on the ground.” So I think first and foremost, whenever we talk about technology, technology transformation, is we really encourage our customers and venue owners to focus on that core infrastructure, that connectivity component, because if you get that right, it’s really, like we say, the foundation of your house. You can do a lot of building on top of that.
Kenton Williston: Yeah, that makes sense. And it’s interesting, one of the things we’ve talked about an awful lot on the insight.tech program, which I should mention, the insight.tech and this podcast, are productions of Intel, is how pretty much every location space is evolving towards edge computing, and how that creates a lot of important considerations around things like, what kind of power do you have to deliver to the edge? And do you have a technology that’s power efficient so that you’re not putting too much of a load on that infrastructure? So that totally resonates not only with what I’m seeing in the venue space, but pretty much anywhere you look, retail establishments, hotels, whatever, this question of having infrastructure, both from the physical point of view, like you’re talking about, and also a system architecture that’s going to make sense in terms of the technology that you’re deploying. I’d be interested in hearing how you work with Intel in that regard, and what benefits that relationship has had for you.
Joe Costanzo: I think you bring up a good point about the edge. Whenever we say edge, and this is where we’ve been working with Intel quite closely, I also think it’s important to define edge. So when we look at edge, we look at it two different ways. We look at it truly on the edge, right there with a chip set inside that data-capture device. That data acquisition or capture device could be a CCTV camera, it could be an IoT sensor. But there’s also that next part of the edge, which is what we refer to as the on-prem or on-premise edge, so that everything isn’t necessarily going out to the cloud. And where we’ve been working really closely with Intel is on those two aspects of the edge. So when you go back to these technologies that we’ve talked about, and really AI and data and analytics, one of the things that we’ve been focused on is computational modeling around computer vision, and our ability to really move that to the edge for a couple of key reasons.
I think, pre-pandemic, people were very leery around computer vision–based technologies for a lot of privacy concerns. One of the things that has emerged through the partnership with Intel is the use of platforms like OpenVINO, that allow us to do our computational modeling right within the chip set. And that then allows us to move those computations to the edge, and then just produce data past the chip. So we don’t have to move massive amounts of video up to the cloud; we can do that on-prem. In some instances, we can do that right on the edge in the camera, in a smart camera. But the key there is that what we’re doing is moving data. So we get rid of the privacy concerns. We’re able to run those video streams in real time through the chip set, and then not have to save off that video but just the resulting data. So we start to address a lot of things just from that little bit of tech stack.
Kenton Williston: That is interesting indeed, and I have a pretty good familiarity with OpenVINO myself, and was just recently talking with one of the leads over there. And I know one of the things they’ve been working on a lot is ensuring that the work they’re doing is very privacy and equity focused, so that it’s ethical AI, not just mindless AI, which definitely can be a problem. And one of the things that I think is an interesting outcome of all that is that it can actually create a greater sense of comfort. So one of the examples that comes to mind here is that mask compliance can be kind of a touchy area. And it’s really nice if, instead of having to have a human being there prodding people to wear their mask, wear it properly, you can have a vision system and a display to just more gently remind people, “This venue has certain requirements, and kindly asks that you don’t crowd, and wear your masks.” Whatever the requirements might be. That really is a much more pleasant way of having that interaction.
Joe Costanzo: I would agree. We talk about AI, there are some conceptions that it can be misused, misappropriated, but I think COVID has helped everybody understand that there are aspects of AI that can be utilized around safety of operations. So to your point, do you really also need these people feeling like they’re the mask police? Or sometimes people can feel harassed by that. We’re all getting reminded that, “Hey, we have to have a mask here. We have to have a mask there.” But what we try to say is if you use the technology right, if you use the data right, then what we want to be able to see is to help you understand the situation. If you’re seeing a lot of noncompliance around masks or social distancing, can you identify those situations as they are occurring and through the automation of information, can you then change dynamically, say, content on that zone?
I think the pandemic, once again, is just forcing organizations on the best use of these types of technologies in order to create a safe and secure and seamless event-day environment. Because I think what you don’t want to do is create friction in that event environment, and technology can help us add that seamlessness to the experience. And when it is seamless, I think people are more accepting of it, because it almost is like they don’t see it happening. It’s when the technology creates friction that I think we see problems.
Kenton Williston: One of the things that seems like would be key to this seamlessness is just what you mentioned, is having a way of carrying data around and using it for a variety of applications. And I can think of all kinds of ways that would be true across the four pillars you mentioned. So for example, we were talking about food and beverage issues, if you’re a sports venue. Boy, it’d be really nice if when you got in line for the beer stand, not only would the local vision sensors tell the staff, “Hey, this particular beer stand has a line that’s too long.” But also tell you waiting in line, “Hey, you might want to go over a couple of spots. There’s another place you could be getting faster service.” All that requires all these systems to work together. And just broadly speaking, thinking of the bigger picture beyond just one beer stand, you really want to have full visibility into your venue, everything that’s happening there so you can holistically think about how to optimize your operations and give your guests a really wonderful experience.
So how can the venue go about really bringing together not just a set of point technologies, but really a full vision of what’s happening at their venue?
Joe Costanzo: I think that’s a great question. And let me just back up a second, because you mentioned a couple of things there, and I think as part of that vision what you also want to know is, are people abandoning the line? The line gets too long, do they ever just come back? And then if you look on the other side of the counter, let’s use this beer vendor as a good example, is, “What type of cost savings are there for me by monitoring the operations?” So, what does that mean? Could be simply placing IoT sensors within your draft lines to ensure that beer is of the optimal temperature. Because if it’s of the optimal temperature, you’ll get less foam, you’ll get more pours per keg. So when we talk about bridging the physical and digital, and there’s a lot of terms we’ll throw out there like digital twinning and those type of things, I think it’s first important to understand that this is an all-business initiative. Technology doesn’t reside anymore in just the IT department. You really need to first incorporate all aspects of your business and get them on board with IT or with technology transformation.
So one of the things that we really lay out are five areas, if you will, to delivery around a strategic and phased approach to technology transformation. First and foremost, you have to have a strategy, and it has to involve all those business units, business objectives, outlaying your technology vision, commercial strategy and valuation. And then sometimes right up front in that process, you have to look at the investment in funding. Technology’s not necessarily expensive, but it’s also not cheap. So, knowing what your investment and funding options are around that strategy right off the bat I think is critical. Then once you’re aligned from a strategy perspective, then you really focus on design. And as I mentioned for us, we have some of those capabilities in house. So we understand the challenges through that phase of understanding your technology-services catalog. You have to map that back to the objectives and to the vision. You need to go through a really detailed design session that supports those technical requirements. And some people might say, “Oh, well, I’m not doing something new, I’m doing something retrofit.” Then those systems integrations and technical requirements are even more important.
If you get through those two phases, then you have a solid foundation to go out into that next procurement phase, where you can put briefs and RFPs and specifications, your tender evaluation, negotiating the contracting, coming back to that investment and funding that you did during strategy, and then commercial partners when it comes to technology. It’s really often looking at, “Are there commercial partners that I can bring into the mix?” And then you go into that implementation and delivery phase, and that’s your installation, integration, commissioning, and handover. And then you’re onto management operations. But if you don’t get those first three areas right, that strategy, design, and supporting procurement, then I think that’s where we see a lot of transformation projects and technology projects probably fail.
Kenton Williston: Something that I’d love to hear about would be a specific example or two where you have worked with clients and they’ve done all these things the right ways and what the outcomes were.
Joe Costanzo: We had a partner that runs a big, I guess, the best way you could call it—it’s in Australia, but it would be similar to a big state fair. So you have concessions. And of course there’s revenue sharing that goes on. But to date that’s always been a manual process when it comes to revenue sharing with the concessions. And it was really based on, well, the amount of people this past year, where they launched a technology platform around crowd management, people counting, occupancy—when it came time to have that revenue-share conversation it was pretty black and white because they were able as the event owners to say, “Look, we know that there were this many people, not just through the gates, but over in these areas, over in F&B, we know how long they dwelled in those areas. We know how utilized the food courts were. So from our perspective, the revenue share needs to be this.” Which was a few percentage points above what the concessionaires were saying.
And it wasn’t that the concessionaires were trying to be underhanded or anything, but they’re just using their eyeballs and their point of sale receipts to get an understanding of what they saw.
Kenton Williston: I really like that example of the state fair setting, where you’ve got a lot of folks who are not there 24/7, it’s more of a pop-up type of scenario. And those sort of scenarios have become increasingly popular over the last few years. And I’m wondering how the smaller or more temporary venues can make use of all this complex technology that we’re talking about. Is there a use case there?
Joe Costanzo: So if you can imagine all of those connectivity concerns that we talked about before when we were focused more on permanent installations, that doesn’t change when you have a temporary event. So one of the things we’ve seen with this technology and the use of IoT sensors is leverage of nontraditional connectivity mechanisms, such as 4G, 5G, private LTE, which we’ve been doing in the States in some instances. And then the incorporation of Intel technology and IoT sensors allows us to capture some of this data in these temporary environments in a very passive method, too, which I think is extremely important, because you want to, going back to what we said before, create a frictionless environment so you don’t have to worry about getting that power in place, because it is temporary. All these things are coming together and allowing us, through our Intel partnership and some of the other partners that Intel’s introduced us to, to create these pop-up overlays that can be done quickly, easily, and I always hesitate to say cheaply, but let’s just say a less-expensive route to doing the connectivity and solving those issues that usually cost you money in a temporary-event world.
Kenton Williston: And obviously cost is always going to be an important factor in any scenario. And that brings another question to my mind, which is if you’re talking about a pop-up setting or a brand-new stadium, you’ve got the luxury of being able to make all your design decisions from the ground up. But, of course, there are plenty of venues that are already established and have all kinds of systems already in place. So how do you go about integrating whatever they’ve already got to take best advantage of it in the new overlays that you’re bringing into the game?
Joe Costanzo: So one of the things that we’ve done as we’ve created our own smart operating platform is taking into account a lot of the things that you just mentioned. So versus creating a product or creating a software platform just as a software company, we’ve taken into account the things that events and venues go through, because we’re events and venue people. So whether it’s input from our design team—that’s WJHW—whether it’s input from our advisory team, whether it’s input from our delivery teams that are out there doing that—what we’ve tried to do is create a way to incorporate this into our platform. And what that really consists of in most instances is a data-fusion layer. So having a data-fusion engine allows us to connect to other data assets. So whether that’s ticketing, whether that’s point of sale, and then quickly being able to deploy computational models on top of that data. So if you have existing CCTV, it’s not about bringing in hardware, whether it’s permanent or temporary for this overlay.
Now that’s not to say that there’s always instances where there’s gaps in their data-collection capabilities that we have to bring hardware into play. But what we want to do is limit that and try and establish ROI through connecting these different data systems. And it’s usually around time-series analysis. Data has a timestamp, we know when you bought something, we know when you came through the turnstile, we know when these things occur. So we overlay that with the data we’re capturing around crowd movement and the IoT sensors, and that allows us to really focus on quick deployments, value very quickly from the data, so you can build up that trust and build up efficiencies in what the data’s telling you, and then move from there. So I think what’s critical is having the ability to acquire data from a lot of different systems, having the ability to place software and technology and leverage existing systems. And honestly, that’s been a big challenge, but it’s one of the things that we’ve been able to do pretty easily with the Intel team.
Kenton Williston: You brought up an interesting point there, which is getting to value quickly. And that leads me to the other end of the question. You have two parts to consider if you’re thinking about return on investment: the investment part, which we just talked about, but then there is also the return. And there’s a lot of aspects that we’ve been talking about here that are about seamless experiences and having a great experience and making people want to come to these venues, but kind of hard to measure exactly what the return is there. So I’m wondering what are the KPIs that people should be thinking about in terms of the returns they can get from deploying these kinds of systems?
Joe Costanzo: First and foremost, what I usually say and what we usually advise on is that KPI is really going to be focused on, “What aspect of the business do you come under?” And what I mean by that is we tend to break up data into three buckets now within a venue environment or an event environment. And that’s crowd intelligence, which kind of sits on the bottom and provides this foundation layer. And then, really, you’ve got your operational intelligence, where a lot of the day-to-day folks sit in, whether it’s the concessions, whether it’s the security teams, that type of area. And then you have the commercial intelligence. And I think more than the KPIs is what you’re trying to do is get to a point where you’re consolidating and analyzing data, because what we’ve seen is that leads to revenue uplift and cost savings.
So quite simply, let’s just talk about commercial intelligence and our partners. So partners in the sporting and event world are paying really big money to be and host activations at your site. So commercial intelligence is pretty critical to help that partner understand what their return on investment is, and also to help them increase their spend within your environment. And that commercial intelligence can be, “Hey, how many new versus returning visitors do we see? How many people have the opportunity to see your activation compared to the number of people through the door? How many people were considered engaged with your activation, and how many people returned to your activation?” So more than just a KPI, is really making sure that you can, once again, and I’ve said this a couple times, bridge that physical and digital world so that you can understand better what’s going on with them, which is an output of the technology, which allows you to communicate better with your asset owners.
On the operational-intelligence side, and you look at your concessionaires, what they want to know is, “Do I have people abandoning my lines?” The technology’s going to tell you, “Look, if I open up three more concessions, I’ll have a cost from a rostering perspective, but does my dwell time decrease? Does my market basket increase? And is there line abandonment?” Maybe you’re better with two. So those I think are today’s technology, these emergent technologies, technology transformation. I don’t want to say that there’s some set KPIs and work towards this. I think what we want to say is that this gives you the data that you need in order to understand what’s going on and allow you to be proactive. And through that, you will see revenue uplift. And in addition to the revenue uplift, you will see cost savings from an operational perspective. It doesn’t happen on day one, but if you have that good governance and you have the right strategy in place, then you’ll start to see these things as an end result.
Kenton Williston: I think that’s all really great. And I think one of the coolest things to me is just the idea that the data may show you opportunities that you didn’t even know you had.
Joe Costanzo: Absolutely. So in one of our events, what we were able to do is create cohorts. So grouping people together by their arrival time. And it didn’t matter when you left, we just grouped you by when you arrived. And could we see some differences in those cohorts? Well, one of the first things we saw was that if you arrived in that 9:30 cohort, you visited more alcohol facilities than any other cohort throughout the day. Now, one of the changes from an operational perspective was, “Wow, we didn’t really expect that. So maybe we need to open up more beer carts, more bars earlier in the day, just to take advantage of the fact that people who get here to the site earlier tend to drink a lot more alcohol than any other cohort.” And this was tracked and rang true, not just from one day—this was over multiple, multiple, multiple days of the event that this data point just stood out bright and clear. So opportunity for the operations and the concessionaire to make some changes that can have an impact on revenue by selling more alcohol.
Kenton Williston: There you go. Well, listen, Joe, it’s been great talking to you and getting these perspectives. I think from the big picture to the smallest details of knowing who drinks the most, it’s been a really fascinating conversation. I appreciate your time.
Joe Costanzo: Yeah, thank you for having me. It’s been great.
Kenton Williston: And thanks to our listeners for joining us. To keep up with the latest from PMY Group, follow them on LinkedIn at PMYGroup. If you enjoyed listening, please support us by subscribing and rating us on your favorite podcast app. This has been the IoT Chat. We’ll be back next time with more ideas from industry leaders at the forefront of IoT design.
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This transcript was edited by Erin Noble, copy editor.
