Chad Gutstein, CEO of online video network Machinima, likes to equate the rise of E-Sports today to rock ’n’ roll’s emergence in the 1950s: Most adults don’t understand it, can’t relate to it, and won’t be convinced it’s anything other than nonsense.
“Now we look back and wonder how people did not get this massive shift that would drive culture for the next 50 or 60 years. The same thing is happening [today] with E-Sports,” Gutstein said. “People are realizing hundreds of millions of influential, affluent kids are spending a huge amount of time and money on E-Sports. In 50 or 60 years, people are going to look back at E-Sports and recognize the same kind of cultural shift.”
For TV and video programmers old and new, the challenge of catching and keeping the attention of young millennials has never been greater than in today’s multiplatform, thousand-channel world. A lot of them see E-Sports as the ultimate cross-media solution.
The category has exploded in the U.S. via splashy deals with Turner and ESPN and investments by agency powerhouse William Morris Endeavor. Growth here will help boost global E-Sports revenue to $1.9 billion by 2018, according to SuperData Research. Born in Korea in the late-1990s, the concept of fans massing to watch gamers compete now routinely draws arena crowds in the tens of thousands here in the U.S. While Asian markets are nearly saturated, North America offers abundant upside and none of the “peak TV” anxiety.
Machinima has been E-Sports-centric since its inception over a decade ago. During its May NewFronts presentation, the company doubled down, launching an in-house E-Sports gaming agency, among other competitive gaming initiatives. And considering the flurry of recent, big-name announcements pushing the E-Sports genre to the front, Gutstein might have a point.
Several major E-Sports initiatives took root in just the last month or so, all attesting to the collective belief in competitive gaming throughout the media and entertainment space. It may once have seemed fanciful to think of TV reaching viewers via gaming platforms like PlayStation or Xbox. Having seen how vital that distribution has become, the industry doesn’t want to be late to act.
Among the recent deals:
• In early June, Comcast announced that its Xfinity cable brand would be a major sponsor of E-Sports event organizer Electronic Sports League (ESL) and the E-Sports teams organization Evil Geniuses (EG). The agreement has Xfinity as a brand sponsor during ESL broadcasts and tournaments, and will see Comcast supply EG’s training facilities with Gigabit Pro internet service.
• During the Electronic Entertainment Expo (E3) confab, ESPN announced it would air the final match of the Madden NFL 16 championship from Electronic Arts (EA) on ESPN2, and stream the June 14 event live on WatchESPN. It was the first time the network had delivered a Madden championship live; SportsCenter dedicated a special segment to the event that same night; and ESPN’s E-Sports vertical (first launched in January) carried extensive interviews and analysis of the finale.
• On June 16, European broadcaster Sky and international gaming company Ginx TV announced the launch of a 24-hour E-Sports channel, Ginx E-Sports TV, featuring major ESports tournaments from around the world, including coverage of Turner’s ELeague, Faceit’s E-Sports Championship Series, and Valve’s The International Dota 2.
• Activision Blizzard Media Networks (ABMN)—a division of Activision Blizzard— used the NewFronts to announce the launch of new E-Sports content, broadcast upgrades and partnerships for its MLG.tv (Major League Gaming) streaming platform. ABMN also struck a deal with Facebook, offering live video of competitions to users of the social media giant.
• Turner debuted its new professional ESports league—ELeague—May 24, and announced just a day before the show debuted on Twitch that the first season would be distributed to more than 80 countries worldwide. Along with live event coverage on Twitch, ELeague sees a Friday night showcase airing on TBS. Turner Studios has a dedicated, 10,000-squarefoot arena in Atlanta for ELeague, which has a live studio audience watching E-Sports teams play Counter-Strike: Global Offensive, vying for a $1.4 million purse. The ELeague championship will be held July 30.
• And in late May, the Pac-12 became the first NCAA conference to support competitive video gaming among its universities, with each college putting together teams to compete around specific games, and the conference’s Pac-12 Networks broadcasting head-to-head matchups and championship tournaments.
“Intercollegiate E-Sports is still in its infancy, but there’s a large appetite among students at Pac-12 universities to compete in E-Sports events,” said Ryan Currier, VP of digital products for Pac-12 Network. “At the same time, many of our schools have nationally recognized degree programs and classes centered around video game design and are located near companies looking for students who are well-educated in game design and technology.”
In early May, SuperData Research published its findings on the state of the E-Sports industry, and reported statistics that shouldn’t be surprising: E-Sports audiences are predominantly male (85%), with almost half (46%) under the age of 25. But what stood out to Joost van Dreunen, CEO of the New York-based research firm, was that E-Sports stakeholders are putting too much stake on sponsorships ($111 million of $143 million generated among ESports enthusiasts in North America in 2015).
“In terms of revenue, E-Sports is currently in its infancy, but publishers may find it to become a viable revenue stream, if they can figure out how to speak to brands and advertisers in a language they can understand,” van Dreunen said.
And there’s an audience to be had beyond sponsorships: This year will see consumer awareness of E-Sports pass 1 billion people, according to recent research from Amsterdambased firm Newzoo, which has been tracking ESports since 2013. Newzoo estimates that between sponsorships and advertising, brands will spend approximately $325 million on video E-Sports content in 2016 (not including media rights), an investment Newzoo forecasts to pass $800 million by 2019.
“The explosive growth of E-Sports and the ongoing convergence of games and video provides the biggest opportunity for the games industry since the launch of the iPhone back in 2007,” Newzoo CEO Peter Warman has said.
Between August 2015 and May 2016, Newzoo estimated that fans watched more than 803 million hours of E-Sports content on Twitch. And according to a spring study by research firm PricewaterhouseCoopers (PwC), E-Sports viewers are dedicated: Nearly one out of five (18%) of respondents who’ve watched an E-Sports competition paid a subscription fee to do so.
“Similar to traditional sports, the E-Sports industry must increase overall consumer awareness, educate the casual consumer and transition youth participants to adult spectators,” said Adam Jones, sports advisory services director for PwC. “It’s unclear yet when or whether E-Sports will need to consolidate brands/competition, or transition consumer loyalty from a game form to individual teams/ players as that’s what’s become critical to success in the traditional sports market.”
E-Sports High Scorers
ANDY SWANSON, VP AND E-SPORTS EVANGELIST, TWITCH
Swanson has served as the E-Sports evangelist for Twitch since April, making him the face of the E-Sports industry for many. He’s responsible for educating the public on how consumer brands and agencies are navigating the world of E-Sports and competitive video gaming.
CRAIG BARRY, EXECUTIVE VP PRODUCTION AND CHIEF CONTENT OFFICER, TURNER SPORTS
Barry oversees Turner Sports’ ELeague, a partnership with WME/IMG. He manages all linear and digital productions, covering brand image, marketing initiatives, business opportunities and sponsorship efforts.
JOHN LASKER, VP PROGRAMMING/ACQUISITIONS, ESPN DIGITAL MEDIA
Lasker is responsible for overseeing content strategy and acquisition for WatchESPN, ESPN3, ESPN on Demand and ESPN Mobile TV. He’s been with ESPN since 1999, serving first as a supervisor of sales planning.
CHAD GUTSTEIN, CEO, MACHINIMA
Gutstein is the CEO of Machinima, the first digital player to launch E-Sports programming on broadcast TV with Chasing the Cup on The CW. He’s helped Machinima bring E-Sports into the mainstream with new programming and the launch of the Mach-1 in-house gaming agency.
TODD ARATA, VP BRAND MARKETING/COMMUNICATIONS, COMCAST
Arata helps shepherd Comcast’s Xfinity brand sponsorships with E-Sports company ESL and the E-Sports organization Evil Geniuses, with Xfinity branding opportunities during broadcasts, tournaments and events, and with Xfinity providing Gigabit Pro internet service at EG’s training facilities.
STEVE BORNSTEIN, CHAIRMAN OF E-SPORTS, ACTIVISION BLIZZARD
Bornstein is a former president and CEO of ESPN; president, CEO and executive VP of media for NFL Network; and former president of ABC. He has headed Activision Blizzard’s E-Sports competitive gaming division since last October.
RYAN CURRIER, VP OF DIGITAL PRODUCTS, PAC-12 NETWORK
Currier leads the Pac-12 Network’s new E-Sports endeavor, announced in late May, which will feature organized E-Sports competitions among Pac-12 universities, airing on Pac-12 Networks.
Chad Gutstein, CEO of online video network Machinima, likes to equate the rise of E-Sports today to rock ’n’ roll’s emergence in the 1950s: Most adults don’t understand it, can’t relate to it, and won’t be convinced it’s anything other than nonsense.Subscribe for full article
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