eSports are attracting a huge following in the demographics broadcasters and advertisers love. But the TV business seems unsure how to tap its success, according to execs in the sector.
The numbers involved in eSports speak for themselves. Depending on which analyst you follow, the global eSports market was worth anywhere from $493m (according to Newzoo) to $892m (Superdata) in 2016 and is on track to pass the $1bn mark as early as 2019.
Nielsen says 75% of viewers who watch it are aged 18 to 34 – precisely the audience said to be turning off the traditional linear television in droves. There were more than 36 million viewers last year for the final of eSports’ biggest tournament, The League of Legends World Championship, according to organizer Riot Games.
Over the course of the week, 334 million people tuned in – the opening ceremony at the Rio Olympics got 342 million.
Deloitte claims eSports have a global audience of 150 million at present. Newzoo puts the figure even higher, at 226 million, while Juniper Research predicts it will eclipse worldwide National Football League viewership and approach that of Formula 1 by 2020.
Little wonder, then, that executives in traditional television are starting to sit up and take note of the potential. Blaine Graboyes, CEO of The Gamer Agency, will told delegates at NATPE Miami that over the past year, in particular, the attitude towards him in pitch meetings has changed markedly. “When I used to show up at a meeting, the exec would often ask incredulously why they were there to talk about video games,” he says. “It’s something they thought was just for their 16-year-old son. You had to walk the executive or funder through a wider discussion about outdated stereotypes.
“Gamers are the largest underserved audience, and that’s because of those stereotypes. People still think they’re teenagers in the basement, nerds. The reality is the average gamer is 35 years old, well-educated, with a good job and a love of video games. It’s a huge market; more than half of U.S. households are gamer households.
“It’s changed dramatically in the past year. Now execs want to understand the opportunity and how they should go after it. There is huge demand from advertisers to be in this space so there’s a lot of behind-the-scenes discussion happening between advertisers, media buying agencies, networks, and digital broadcasters, saying they want to be in eSports and gaming, and looking for content they can get behind.”
Exactly how to tackle a medium that is, by its very nature, digital native – and involves an audience increasingly turned off by TV – is another challenge altogether.
Sportscaster ESPN, after initially expressing reservations, has tried its hand at screening live eSports events in the same way it does baseball or any other sport. In 2014, ESPN’s president John Skipper said: “It’s not a sport, it’s a competition. Chess is a competition. Checkers is a competition. Mostly, I’m interested in doing real sports” – a comment that seems to support Graboyes’ point.
Since then, a dedicated eSports section has been added to the ESPN website, highlights have been aired on linear channels, and the 2016 League of Legends championship was shown live on ESPN2.
John Lasker, ESPN’s VP of digital media programming and acquisitions, says: “There is plenty of crossover in what traditional sports fans are looking for from ESPN, gaming, and eSports. The data shows us there is potential to expand beyond the traditional sports fans that we reach every day and into an audience that doesn’t necessarily come to us as frequently.
“People are understanding there’s an energy at these events, passionate fans, and storylines. The folks playing these games put in a ton of work and sacrifice in order to be the best at what they do. If you line it up against anything else we do in the traditional space, it ticks all the boxes. So why not try and be part of it?”
Other companies have made their play simply by investing, sometimes very big money, in companies already operating in the space. Amazon beating YouTube to the $970m purchase of Twitch is the headline news, but European satcaster Sky and U.K. broadcaster ITV have also dipped their toes by signing a deal with Ginx to launch an eSports channel to 23 million households in the UK.
Martin Goswami, ITV’s director of pay and distribution, says: “We had been looking strategically at the areas we wanted to expand into in order to get hold of younger audiences. We had identified eSports as one of the areas over others. It’s one of the most active components of change in the TV industry.
“I wouldn’t go so far as to say we are definitely going to do more in eSports, but we are very open to it. We probably won’t look at other channels at this stage, although we wouldn’t rule it out. The eSports value chain is quite big and obviously growing, and we are definitely interested in all aspects of it.”
Joost van Dreunen, CEO of research outfit SuperData, says: “TV networks like TBS and ESPN are airing eSports in a bid to reach a valuable audience. These viewing options appeal to casual fans who are turned off by the intricacies of streaming platforms [such as Twitch’s lightning-fast chat feed].
“Initiatives from Facebook and TV networks will bring more mainstream audiences into the fold, but it is a mistake to think existing eSports viewers will move away from Twitch in favor of ESPN. Online streaming platforms offer a superior viewing experience by letting viewers chat with others easily and track competitor stats.
“Additionally, the eSports culture and core audience originated online, so long-time fans do not feel TV is necessary to legitimize eSports. Contrary to many people’s impression, eSports do not need TV. It is TV that needs eSports.”
Graboyes will tell NATPE delegates that he doesn’t necessarily agree with that prognosis, but does believe television is missing a trick by simply screening live events and expecting the audience to move across. “Live events could transfer to TV and I love everything that’s happening because it all grows the audience. But the core audience for eSports is a live-stream audience in the live-stream platform and mobile technology space,” he says.
“Some of the strengths of eSports are the great stories, the diverse range of characters and the fact it’s very visual and spans a wide age demographic, through the 20s, 30s, and 40s. That, to me, says there are a lot of opportunities for an eSports comedy series, a family drama or a reality show.”
Graboyes, whose companies work with Microsoft Stores to provide eSports venues, and with casinos on a functioning eSports gambling experience, points to another huge success in broadcast and syndication.
“Look at The Big Bang Theory,” he says. “If you could have predicted that nerd culture would be the next mainstream a decade ago, you’d have made billions. Big Bang got there and tapped into it. Gamers are the next mainstream waiting to break out and bring their stories and narratives to the forefront.
“I’m massively surprised that there has been maybe only one or two reality programs around competitive eSports and gaming because there are all the components there of the best reality shows: teams competing, visual competition, dynamic hero and underdog stories – it’s all built right in. That’s the opportunity for broadcast.”
This article was originally published in the NATPE Daily. Read more from NATPE Daily Day 2.