Esports offers opportunities for broadcasters. With its growing fan base and complex rights management changing the landscape, IBC365 examines the lessons in production from the cutting edge of gaming.
Esports offers a wealth of opportunity for its stakeholders across the broadcasting media and entertainment sectors with exponential revenue opportunities around brand engagement, audience interactivity and live streaming potential.
The global esports revenue is forecast to top $1.1 billion this year alone according to data from gaming analytics firm Newzoo, and this is up 27% since last year, with expanding revenues across the advertising, sponsorship and media rights contributing to the competitive gaming sector.
Brand support will have nearly tripled since 2015, the total engaged audience which is comprised of enthusiasts and viewers is expected to grow 15% to 454 million this year and by 2022, the total global revenue is expected to reach $1.8 billion, Newzoo found.
The esports industry is developing rapidly with new tournaments, investors, teams and ways of consuming content contributing to the growing sector and community and broadcasters want a piece of the pie.
- Read more: Esports comes to play at IBC2019
It is understood that some 500 million people around the world have tuned in to watch live esports tournaments and traditional broadcasters are slowly turning to the nascent industry to expand and invest.
According to Nielsen Esports managing director Nicole Pike: “Esports fans around the world include some of the hardest-to-reach consumers for brands through traditional media – they’re young, digital natives who are also cutting cords and blocking ads at rapid rates.
Esports productions come in all shapes and sizes but are on the face of it, it’s not fundamentally that different from producing a music awards show.” Michiel Bakker, Ginx TV
“Esports allows brands to reach these fans while they’re engaging with their number one entertainment passion point: video games.”
A dedicated television broadcast of esports would have once seemed farfetched, however in 2016 UK broadcasters Sky and ITV teamed up with sports channel Ginx to launch Ginx Esports TV which is an international multi-language TV channel dedicated to esports, now accessible in 50 countries and is tracked in more than 55 million homes.
Ginx TV chief executive Michiel Bakker tells IBC365: “Esports productions come in all shapes and sizes but are on the face of it, it’s not fundamentally that different from producing a music awards show.
“The on-location staging and broadcast infrastructures are similar, with elaborate use of lighting, LED screens, multiple HD and UHD cameras feeding into a full broadcast gallery, staffed with the many TV executives having made esports broadcasting their new home.”
Tuning in to the esports opportunity
The challenge is to convince commissioners and schedulers of traditional TV of the revenue opportunities and the global audiences’ interest in esports.
However, the recent publicity around the success of the Fortnite World Cup has done “wonders to help open up people’s eyes and the opportunities,” Bakker explains.
In July this year, the youngest ever esports player Kyle ‘Bugha’ Giersdorf won himself $3 million from Epic Games after securing first place at the Cup final solo tournament in New York. The 16-year-old has been immortalised in the game after winning the largest pot prize for a single esports player in the history of competitive gaming.
There is great potential for broadcasters to work with the esports industry, Bakker says: “Broadcasters are becoming more receptive to the idea to show content in parallel to online distribution.
“The esports industry is now more open to putting effort into allowing and helping broadcast media to do the thing it is best at and that is telling stories, as long as those broadcasters respect the players and understand the esports dynamics,” he adds: “Mutual understanding is critical for success.”
For Pay TV operators that have yet to make a play in esports, the opportunities will come primarily through growth in casual viewing, attracted by “sanitised” esports competitions with appeal beyond enthusiasts, according to a report by Rethink Technology, which forecasts there will be scope for traditional media firms to gain media rights and sell advertising.
A key aspect of its forecast is that revenues from media rights, where broadcasters gain rights to broadcast tournaments, are set to climb more steeply increasingly more than 12 times over the next five years which is more than any other category of esports monetisation.
Today esports is vying to be the second most popular sport after football with the evolution of the gaming and production values leading the future of the industry.
Two worlds combining
The potential for traditional broadcasters to adopt the esports business model will be driven by sponsorship and investment to generate esports tournaments explains British Esports Association chief executive Chester King.
He says: “The alignment between esports and broadcasters will be even increasing - especially with esports franchised leagues starting to travel globally putting on tournaments around the world including Overwatch World League and the new Call of Duty League coming in 2020.”
“Interestingly, female esports fans are watching 15% more TV on average than their male counterparts.”
According to the Nielsen Esports fan report, The Esports Playbook which examined the esports sectors across the US, UK, Germany and France, it found: “Esports fans are avid streamers who also watch linear TV and are consuming content via all sorts of different screens.
“Interestingly, female esports fans are watching 15% more TV on average than their male counterparts.”
Across the regions analysed, esports fans spend approximately 4.3 hours per week watching TV on a TV screen via cable or satellite, 3.5 hours watching digital or streaming content through services such as Amazon Prime, Netflix and HBO Go and 4.5 hours watching internet videos through websites including Vimeo and Facebook.
Esports is a global activity with a global audience, Nielsen research points to the lack of consistent broadcasting events to ultimately improve the audience viewing experiences.
Nielsen’s Esports MD Pike adds: “Understanding the complexities and intricacies of the esports marketplace is another major challenge – there are a multitude of teams, tournaments, titles, players and commercial and broadcast models in play, as the sector develops and matures. We are already seeing examples of brands making the most of the opportunity and generating significant returns on their investments in esports.”
Esports production needs to be approached differently from traditional sports, however, according to a number of experts.
Bakker explains: “Where things are different in esports is the approach to the fully integrated parallel analysis and commentary of matches in at least four key languages and the sheer scale of computing, graphics power and connectivity needed, especially those featuring a Battle Royale game like PUBG or Fortnite, where you may have up to one hundred players involved at any one time.”
However, the rapid rise of esports has meant that traditional broadcasters are looking to collaborate and partner with the sector that has been around for more than 30 years and was once traditionally watched online via YouTube and streaming sites including Twitch and Facebook Live.
Premium live streaming and recording software solution specialist firm XSplit which is used by influencers, publishers, developers and tournament organisers, is nearly 10 years old. The company enables instant streaming on Twitch or YouTube and logistics and live streaming production manager Luis Vigil explains the production opportunities for broadcasters.
He says: “The main opportunity is making esports more interesting and easier to understand for audiences and I really believe this can be achieved by developing storylines and personalities rather than adding more production elements.”
In 2017 India launched its first major esports league, UCypher which is a bi-annual tournament featuring six teams and prize pool of approximately $80,000, which comparatively is significant less than the US market but proves the esports sector is expanding and diversifying regionally.
While the International esports Federation (IESF), a south Korea-based organisation has been tasked with promoting esports and to convince the International Olympic Committee that esports is a true sport, if successful esports could play a role in the Olympic Games programme hosted ion Paris in 2024.
According to a report by the BBC, Olympic organisers are in “deep talks” about including esports as a demonstration sport during the Games. Competitive video gaming will be a medal event at the 2022 Asian Games.
Two companies which have been at the heart of the global esports phenomenon are onling streamer Twitch and ESL.
ESL was founded in 2000 and is the world’s biggest eSports company. It launched the Intel Extreme Masters in 2006, hosts eSports tournaments all over the globe and also gets involved in technology development.
”Esports is using more and more classic broadcast environments in a very excessive way and mixing those ingredients totally differently compared to many other sports.” Simon Eicher, ESL
This year at IBC, Tuesday 17 September will host a dedicated esports day to explore the technical and commercial opportunities and challenges of the rapidly growing world of esports with an exclusive showcase.
The IBC Esports Showcase, is new for 2019 and is powered by ESL, EVS and Lagardère and sponsored by NEP, IHSE and the City of Amsterdam.
It will feature a live esports tournament in the RAI Auditorium taking advantage of a unique combination of world-class technology placing spectators at the heart of the action.
Speaking in the panel discussion, Understanding esports production ahead of the live tournament at IBC2019, ESL esports services executive producer and director of broadcast Simon Eicher told IBC365: “Esports is using more and more classic broadcast environments in a very excessive way and mixing those ingredients totally differently compared to many other sports.
“IBC2019 Esports Showcase is a great chance to get a grasp of what it means and what impact in my point of view esports will have in return to traditional sports the upcoming years.”
The broadcaster’s investment in esports has been slow, which is understandable as investments need to be future proofed, new technologies often incorporated into esports tournaments including augmented and virtual reality are expensive, while availability for scheduling is competitive.
Eicher adds: “This is quite some challenge to make that experience even better than it is today, but also pushed broadcasters beyond entertaining to evaluate and refocus what is important and beneficial to audiences for tomorrow.”
Historically many broadcasters treated esports with a point of contention to its traditional sports broadcast operations.
One exception is US entertainment broadcaster MTG, which actively shifted away from its broadcast operations in favour of investing in esports companies such as Turtle Entertainment, in which it owns a majority stake.
Ampere analyst Hazel Ford told IBC365: “While the name may suggest that esports is similar to traditional sports, many esports events are typically delivered in a very different way and will veer away from sports games such as FIFA in favour of games like League of Legends and Fortnite.
Amazon bought Twitch in August 2014 for $970 million in what BBC reported as a “surprise move,” however Amazon chief executive Jeff Bezos said in a statement: “Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month.”
Ford continues: “Distributing esports is dominated by specialised streaming services, most notably Amazon’s Twitch, and developers’ own services.
“There are many challenges and opportunities with esports for content providers, one of which may be harnessing the appropriate technology to deliver the optimum experience to consumers, particularly those who have adapted to viewing from a computer.
“Consumers’ preference for flexibility in the viewing experience makes esports tournaments more suited to streaming services. A linear broadcast would be limited in the selection of content to display, which may not be attractive to consumers who are used to a multichannel experience, while a linear TV streaming service such as Playstation Vue might be able to emulate some of this experience, already allowing users to stream four sports channels in a single screen.”
Linear TV services offer low latency and no buffering for its audiences which would be advantageous during esports tournaments.
Ford says broadcasters should address the likelihood younger audiences would favour online esports services ahead of linear channels “by creating exclusive distribution deals with some of the biggest esports players, which may draw fans to their channels.”
However, according to Nielsen Esport research, across the four markets surveyed, while 52% of esports fans consider it to be an actual sport, only 28% believe it should be an Olympic sport.
Tony Estanguet, the former canoeist-turned IOC-member who has helped lead Paris 2024’s Olympic bid, recently spoke positively about esports’ chances. He told the Associated Press: “We have to look at it because we can’t say, it’s not us, it’s not about the Olympics.”
The inclusion of esports would likely help the Olympics reach the new, younger demographic it desires and this rings true for traditional linear broadcasters.