Streaming Esports A new wave of media rights - JULIANA KORANTENG Editor-in-Chief/Founder MediaTainment Finance (UK)
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Streaming Esports
A new wave of
media rights
JULIANA KORANTENG
Editor-in-Chief/Founder
MediaTainment Finance (UK)
TABLE OF CONTENT
CHAPTERS
1. INTRODUCTION - page 3
2. GLOBAL PLATFORMS (Charts) - page 6
Twitch; YouTube Gaming; Fb.gg; Mixer; Huya; Douyu TV
3. ANALYSIS: The global players - page 9
The chase after exclusive rights
4. ANALYSIS: Other streaming
platforms - page 12
5. STREAMING ESPORTS:
The challenges - page 14
6. INTERVIEW: Gfinity - page 15
Bryan Healy, Chief Strategy Officer
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a new wave of media rights
STREAMING ESPORTS: A new wave of media rights
1. INTRODUCTION
You know technology has genuinely created a new entertainment format when demand for the media rights to the related
content reaches fever pitch.
That is precisely what has started to happen in esports and related competitive-gaming businesses.
In media and entertainment, streaming technology has been revolutionary. It breathed life into the once almost-moribund global
music industry. Today, streaming-music platform Spotify boasts 157 million monthly active users, more than 70 million paying
subscribers and a reported market valuation of US$30bn-plus.
Netflix used streaming to bulldoze the once sleeping international TV-broadcast sector; today, it reports more than 125 million
paying subscribers internationally and has an enterprise value of about US$182bn.
But while the way music and TV are delivered has changed, how they are produced and consumed has not. In the video-games
sector, on the other hand, streaming has helped create a brand new beast: professional esports.
It made the once underground activity of watching your friends play video games against each other accessible to millions of
viewers globally.
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STREAMING ESPORTS: A new wave of media rights
It opened up a new way of watching competitive gaming in arenas and stadiums because streaming statistics proved there was a
demand.
Furthermore, millions of fans can watch the streamed competitions live or pre-recorded and interact with them by joining in,
commenting, sharing content and even making donations via micropayments online in real time.
‘Professionalisation’
Esports has gone professional with players able to make it a full-time career supported by experienced talent managers, legal
advisers and sponsors, in the same way as professional musicians, actors and athletes are able to.
On streaming platforms, however, esports players can also become streamers by setting up channels that broadcast competitions
they have entered or organised. This takes the concept of user-generated content (UGC) to a new level. In fact, some professional
players quit the live circuit of venue tournaments to continue their careers as professional streamers.
Streamers monetise their channels not only by relying on potential sponsors and advertisers targeting their Millennial and GenZ
fans, but also by inviting fans and followers to subscribe, donate or tip cash to show their commitment. Some can earn as much as
six figures in US dollars a year.
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Rights fever
The leading streaming platforms include the Amazon-owned pioneer Twitch, which joins YouTube Gaming, Microsoft’s
Mixer, Facebook’s Fb.gg, China-based Huya and South Korea’s AfreecaTV to target international streamers and
audiences. They have started competing for the exclusive rights to host the major esports events to draw the most viewers
to their platforms as that means big sponsorship and advertising revenues.
This, in turn, is hiking the value of the professional esports tournaments being hosted by various organisers, like ESL,
DreamHack, MLG (Major League Gaming), Activision Blizzard’s Overwatch League, Hi-Rez Studios, and China’s Versus
Programming Network. Dutch research firm Newzoo predicts the number of esports enthusiast and casual viewers will
reach an estimated 557 million globally by 2021 (from 335 million in 2017). UK-based Juniper Research reports that the
number of viewers of esports and related content will reach 858 million by 2022. Whatever the actual outcome, the
demand is there.
This exclusive Esports BAR White Paper will show how streaming technology is adding value to esports for
investors and brand owners, and why it has become a gateway for the growing number of fans as it goes
mainstream.
Although the sector is still developing, this report will highlight the content-rights activities of the leading streaming-only
players, examine the emergence of a new generation of platform operators, and outline the challenges the platform
companies face as they chase after more esports rights.
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2. CHARTS: The Global Platforms
Streaming platform: Twitch Streaming platform: YouTube Gaming
Owner: Twitch Interactive, Inc. (an Amazon.com, Inc. subsidiary) Owner: Google, Inc. (an Alphabet Inc. subsidiary)
Region: North America Country: US Region: North America Country: US
Estimated reach: 2.2 million broadcasters; 15 million daily active visitors; Estimated reach: YouTube has over one billion registered users; 30 million
140 million unique monthly viewers; 788,000 concurrent viewers per quarter active daily users; 1.6 billion monthly active viewers; YouTube Gaming has
308,000-plus concurrent viewers per quarter
Rights to which esports content: Fortnite Battle Royale; League of
Legends (LoL); PlayerUnknown’s Battlegrounds (PUBG); Dota 2; Rights to which esports content: Fortnite; Counter:Strike Global Offensive
Hearthstone; exclusive global rights to Blizzard Entertainment tournaments (CSGO); Minecraft; PlayerUnknown’s Battlegrounds (PUBG); League of
such as the Overwatch League events (except China), Hearthstone Legends (LoL); exclusive broadcasting rights to tournaments such as CS:GO
Championship Tour, Hearthstone Global Games, StarCraft II World Esports Championship Series (ECS) and ESL Pro League
Championship Series, World of Warcraft Arena Championship, Heroes of the
Storm Global Championship; plus the NBA 2K League 2018 season games;
and Gfinity Elite Series Australia
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Streaming platform: Facebook Gaming Live/Fb.gg Streaming platform: Mixer
Owner: Facebook, Inc. Owner: Microsoft Corporation
Region: North America Country: US Region: North America Country: US
Estimated reach: Facebook has 2.19 billion monthly active users; 800 million Estimated reach: More than 10 million monthly active users
people play Facebook-connected games each month
Rights to which esports content: Fortnite Battle Royale; PlayerUnknown’s
Rights to which esports content: Fortnite; PlayerUnknown’s Battlegrounds Battlegrounds (PUBG); ESL One Cologne and ESL National Championships;
(PUBG); Counter-Strike: Global Offensive (CS:GO); League of Legends (LoL); exclusive broadcasting rights to tournaments, including Hi-Rez’s SMITE Pro
Dota 2; exclusive broadcasting rights to CS:GO Pro League, the ESL One (in League and SMITE Console Series
English and Portuguese), Dota 2 and CS:GO tournaments; live streaming rights
to ESL Pro League, H1Z1 Pro League; Paladins Global Series; Paladins Premier
League; Gfinity Elite Series in 2018 in the UK
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Streaming platform: Huya Streaming platform: Douyu TV
Owner: YY.com; Tencent Holdings; NYSE-listed Owner: Independent (Wuhan Douyu Network Technology Co); investors include
Tencent Holdings and Sequoia Capital
Region: Asia Country: China
Region: Asia Country: China
Estimated reach: 92.9 million monthly active users; 3.4 million paying users;
41.5 million monthly active users on mobile Estimated reach: 30 million daily active users; almost 200 million monthly active
users
Rights to which esports content: League of Legends (LoL); PlayerUnknown’s
Battlegrounds (PUBG); exclusive broadcasting rights in China to 2018 League of Rights to which esports content: Dota 2; Fortnite; PlayerUnknown’s
Legends Korea Champions Battlegrounds (PUBG); League of Legends (LoL)
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3. ANALYSIS: The Global Players
Twitch.tv, a start-up Amazon.com paid almost US$1bn for in 2014, is the In addition to giving streamers a share of the advertising income on its
market leader among the streaming-esports operators. platform, Twitch offers free content, including games, to gamers who
subscribe to the Amazon Prime e-commerce membership services.
It set up the Twitch Partner Programme to enable the most popular
streamers, players, leagues, teams and organisations hosting gaming events YouTube Gaming, part of Google’s pioneering video-sharing platform, is
on the platform to share advertising revenues and set up a subscription considered Twitch’s biggest rival. This is mainly due to the fact that its parent
scheme. company is one of the world’s richest tech conglomerates.
Twitch recently introduced Extensions to its services, enabling the more than YouTube Gaming started by offering mostly pre-recorded competitive gaming
2 million super fans who broadcast their own channels on the platform to add and ended up playing second fiddle to the live entertainment offered by
more personalised visuals and interactivity. Twitch.
When a major brand owner like Vodafone, the international telecoms giant, This year, YouTube Gaming is hiking its live offering and, with that, a growing
wanted to tap into the esports market and broadcast its own channel, it chose number of the streamers broadcasting their own channels are participating in
Twitch. the YouTube Gaming Sponsorship scheme.
When superstar rapper Drake played the game Fornite against star Twitch This enables followers to pay a monthly fee (US$4.99/€4.99/£4.99) each in
player Tyler ‘Ninja’ Blevins in March, 628,000 viewers were watching exchange for exclusive content and emoji symbols from the streamers plus
concurrently at one point. That kind of audience pull brings in advertisers. exclusive live-chats.
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YouTube has been so happy with the initial responses, it is extending the It enables gamers to have their own landing page on Facebook and for
gaming-sponsorship format to standard channels hosted by YouTubers with esports players to discover games to play.
at least 100,000 followers each.
It allows gamers to monetise their activities, and offers an API and a software
Before launching YouTube Gaming in 2015, YouTube enabled individuals and development kit for game developers who want to integrate Fb.gg. Its
companies to operate multi-channel networks (MCN). Several MCNs have Gaming Creator Pilot Programme is similar to the Twitch Partner Programme.
been hosted by gamer celebrities reviewing new releases, commenting on
gameplays, exchanging best-game tactics with other players, or producing As the owner of the Xbox brand, PC goliath Microsoft is arguably the US’
original content. So, it already had games-related credibility. biggest games developer in a sector dominated by Asian corporations like
Sony (PlayStation), Nintendo and Sega.
Facebook, the leading social media network with more than 2 billion
registered users, initially did not seem to be a contender in the streaming- But it made its first serious move into esports streaming in 2016, when it
esports race. acquired start-up Beam. Beam was renamed Mixer in 2017 and was
integrated into Microsoft’s Xbox division.
Then, it discovered that more than 800 million users played games or
accessed games-related content on Facebook’s main sections, including the In May, Mixer announced deals to transmit 15,000 hours of content from
areas for the News Feed and the video area Watch. The Facebook Gaming major esports competitions, including those based on Valve’s Counter Strike:
page alone has almost 10 million followers. Global Offensive (CS:GO) and Dota 2, plus ESL-organised events. They are
not expected to be streamed live as those rights have gone elsewhere, but it
In June, Mark Zuckerberg’s empire confirmed its commitment to esports by is a significant start.
launching Fb.gg, the closest it has come to competing directly against Twitch
and YouTube Gaming
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Meanwhile, it has nabbed the exclusive live rights to Hi-Rez Studios’ SMITE This followed a US$462m funder raiser in March, a Series B round that was
games. And Microsoft’s Xbox division has opened the Mixer NYC Studio to led by Tencent Holdings, the Chinese Internet conglomerate and one of the
host esports events in New York. world’s biggest investors in video games.
China is also becoming home to some of the most driven esports- Huya, which recently clinched China’s exclusive streaming rights to the 2018
streaming platforms. League of Legends Korea Champions tournament, plans to use the new cash
to expand internationally and acquire more streaming rights.
According to the government’s China Internet Network Information Centre,
the country’s live-streaming sector counted 422 million users by the end of Tencent has also injected US$630m-plus into Huya rival Douyu TV, another
2017. Live-streaming of video content was watched by 224 million, a 50% Chinese streaming platform.
jump from the previous year.
This has contributed to Douyu TV’s reported valuation of US$1.5bn. But
Other data cites that China has an estimated 408 million online gamers, plans for a Hong Kong stock-exchange listing indicate the valuation is more
including esports fans. Major streaming platforms Huya and Douyu TV are likely to be US$700m
known as the Twitch of China.
Douyu’s other major investor is US venture-capital firm Sequoia Capital,
Huya, a subsidiary of leading Chinese social-media network YY.com, has whose portfolio has included Apple, Google, YouTube, PayPal, Instagram and
raised US$180m via a listing on the US stock exchange NASDAQ in May. By Yahoo.
June, it had an enterprise value of almost US$3bn.
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4. ANALYSIS: Other Platforms
The key streaming platforms battling for the rights to live professional and Twitter live streamed its first esports event, a CS:GO competition by Eleague
amateur esports look as if they will dominate the field for some time, but we (a Turner Broadcasting and WME-IMG joint venture), in 2016. It formed
should keep an eye out for smaller but emerging players. similar agreements with ESL and DreamHack in 2017.
In the US, there are other international streaming platforms entrenched in Although no major rights deals have been announced recently, Twitter
esports. There is Smashcast, a subsidiary of Azubu North America Inc. that recently blogged: “Twitter has made it a point to bring more great gaming
was formed in 2017 after the merger of rivals Hitbox and Azubu. content to the platform in 2018.”
The move of Steam, a subsidiary of tech group Valve Corporation, into In China, considered the world’s biggest single games market by the number
esports makes sense as it is one of the inventors of international online of players and revenue, look out for Panda TV. After raising more than
multiplayer gaming. It has 125 million registered users. US$250m in funding, Panda TV is expected to give Huya and Douyu TV a
real run for their money for live-esports rights.
Despite being a sister company (via Activision Blizzard) to the popular
Overwatch League tournaments, MLG.tv has not been as aggressive as It belongs to Wang Sicong, whose mogul father Wang Jianlin almost ended
expected in chasing streaming rights. However, having once declared plans up ruling the international media and entertainment space with is Wanda
to be the “ESPN of esports”, that goal must still be in the pipeline. Group empire.
The live version of micro-blogging platform Twitter and its subsidiary live- The international ambitions of Panda TV, which has a reported 80 million
streaming platform Periscope are being positioned as ideal for competitive monthly active users, might be curtailed after Chinese regulators forced
gamers who want to entertain followers in real time. companies like Wanda Group to limit the amount they invest overseas.
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Also vying for the attention of esports fans in China are Zhanqi TV, a As Japanese regulators open up more to competitive gaming as a legal
subsidiary of games company Hangzhou Bianfeng Network Technology; pastime, streaming platforms AbemaTV and Openrec TV are expected to
Longzhu TV, part of Shanghai PPlive Media Tech Co.; and Huomao TV, exploit the situation. And Singapore-based Garena Live (a subsidiary of Sea
which belongs to Wuxi Qiaoxi Culture Media Co., is an aggressive chaser of Ltd) is targeting the fast growing Southeast Asian esports market with events
the best rights and also an investor in professional streaming players. and tournaments held in the region.
Other Asian stalwarts include AfreecaTV, a South Korean operation with an Also hitting the headlines are Australia-originated Esports Mogul, which is
estimated 25 million users in Korea, Japan, Taiwan and North America. extending the reach of its Mogul Arena, a streaming platform for gaming
enthusiasts to play against each other, globally. China-based Chushou, a
Also hoping to make waves in the competitive-gaming space in Korea is platform targeting mobile esports players, has raised US$120m in funding
KakaoTV, a subsidiary of Internet conglomerate Kakao Corp, which is from investors that include search-engine market leader Google.
famous for its instant-messaging app KakaoTalk.
Caffeine.tv, a “social broadcasting” platform launched by former Apple
KakaoTV’s sister company is games developer Kakao Games, which is the executives for live streaming gaming events on the Internet and on apps, has
local distributor of PUBG, one of the most popular titles internationally and announced an ESL partnership to broadcast live events, tournament
developed via Korean company Bluehole Studio. highlights, replays and produce an original talk show.
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5. Streaming Esports: The Challenges
A costly affair: Both Douyu TV and Huya are just about profitable, while Amazon, Facebook, Microsoft and YouTube do not break down their revenue
figures to reveal the financial health of their gaming-centric streaming platforms. But the investments do not come cheap. Maintaining the required
servers, storage capacity, bandwidth, upgrading the tech, and marketing the platform can eat up a lot of cash before you see any returns.
A lack of structure: The copyright infrastructure for esports media and entertainment remains opaque. Exclusive deals to stream the most exciting
and in-demand events are all well and good. But the marketing strategies behind them have not reached the sophistication of TV networks with the
sole rights to Game of Thrones or the English Premier League football, for example, or the first cinema chains to screen Marvel’s hot Black Panther
blockbuster movie.
Demand exceeds supply: a popular console or multi-player online video game will not necessarily translate easily into an esports competition fans
will want to watch. Blizzard Entertainment’s Overwatch game is a global hit. It is also an esports sensation. Yet, despite the outstanding sales of
PUBG, industry observers note that the title might not necessarily become as popular in esports as the entrenched League of Legends and Dota 2.
Fortnite Battle Royale has continued to break revenue-generating records every month since its release in 2017. But publisher Epic Games has had to
come up with a staggering US$100m in prize money to raise awareness for its esports-competition ambitions.
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6. The Interview: Gfinity
Bryan Healy
Chief Strategy Officer
Gfinity (UK)
Gfinity has singlehandedly raised the UK’s profile on the international esports scene. It is listed on the country’s AIM stock
exchange. It has championed teams and players by hosting tournaments at the dedicated London-based Gfinity Arena.
It is the first venue of its kind devoted to professional competitive gaming in the country, and the competitions at the venue are
streamed on Gfinity’s own platform. Some of its events, like the Gfinity Elite Series, have become so popular, other streaming
platforms have licensed the international live-streaming rights.
Its credentials took further steps up the fast-rising esports ladder when it clinched the partnership to organize the Formula 1
Esports Series for the world’s biggest motor-racing event in 2017. Gfinity’s Bryan Healy explains why both streaming and linear
TV are essential to its long-term growth.
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Esports Bar: What, in your opinion, are the unique qualities about streaming technology that have made esports
accessible to gamers globally?
Healy: today’s gamers are digital-first, at home with navigating the broad spectrum of direct content websites that exist in the
ecosystem. The choice of platforms, engaging technologies and wealth of content freely available to viewers make for a
compelling viewership proposition.
Esports Bar: Does Gfinity plan to invest in traditional broadcast media to reach a more mainstream audience as well?
Healy: The Gfinity Elite Series has been broadcast on BBC Three, BT Sport and Eleven Sports. Our Formula 1 Esports
broadcasts were live on Sky Sports F1. Linear broadcasters offer a varied and diverse audience outside the traditional esports
demographic and increased reach for commercial partners, so it’s definitely something we’re considering with our productions
moving forwards. The key is always to tailor content to the different audiences on different platforms and, at Gfinity, we have an
incredibly strong production team that has worked across both traditional linear-TV sports programming and digital platforms.
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ABOUT THE AUTHOR
Juliana Koranteng is the founder/editor-in-chief of MediaTainment Finance (MTF) and TechMutiny, the business journals that cover investments in international
media, entertainment and creative sectors, and the impact of related digital technologies. Koranteng, a London-based international journalist, has been a contributing
editor at Billboard magazine, the Hollywood Reporter, Advertising Age, and a correspondent for TIME magazine, the Washington Post, The Economist, UK national
newspapers and the author of several Financial Times books and reports. She is a reporter on the daily magazines published by Boutique Editions at the annual
MIPTV, MIPCOM and Cannes Lions events in Cannes. MediaTainment Finance and TechMutiny are published by JayKay Media Inc, which also includes an editorial
consultancy, speech-writing, ghost-writing and photography-design among its activities.
Follow @MediatainmentMT Follow @TechMutiny
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