On Monday, eSports operator Gfinity announced a media rights deal with OTT broadcaster Eleven Sports, securing exclusive distribution for their Elite Series across all seven of the broadcaster’s markets – Belgium, Italy, Luxembourg, Poland, Singapore, Taiwan and the USA. The Elite Series will see the UK’s top Rocket League players compete for a share in the £225,000 prize pool and is the latest media rights deal to be announced in the eSports space.
Advertising and sponsorship revenues are still the overwhelming primary revenue driver for eSports but there seems to be a media rights announcement every couple of days which demonstrates the growing competition to reach the highly sought after fickle millennial audience. Online platforms such as Amazon’s Twitch and YouTube are still considered to be the primary outlets for the consumption of eSports with viewing figures in the UK of “traditional” broadcast channel, GINX, languishing in comparison. An OTT operator such as Eleven Sports should be ideally placed to straddle the online model and potentially offer other engaging ancillary content to build an eSports community in each of its territories. Depending upon the commercial deal struck with Gfinity, a further strategy may be to syndicate key rounds of the competition to a Twitch or Azubu perhaps in return for a further share of advertising revenues.
This then begs the age old strategic question of seeking eyeballs and distribution vs the exclusivity of your content offering. Broadcasters such as Sky have built their empire by offering the best content exclusively but in an industry where widespread internet streaming of competitive gaming is the norm, until the market becomes less fragmented, perhaps the strategy for eSports licensees is to balance out the exclusivity shout with exposure to drive advertising and sponsorship revenues, retaining a share of such revenues under its sublicensing arrangements.
On that note, we wait eagerly this year to discover BamTech’s plans for monetising the exclusive 7 year League of Legends rights which they reportedly paid Riot Games a minimum of $300m for in December 2016. This was very much a landmark long-term deal for the eSports industry which has not yet been matched – at the time of the deal it was speculated that the model would be a combination of a dedicated app (driven by advertising and sponsorship sales) with potentially premium bolt-on subscription offerings combined with some distribution to Twitch and YouTube. This would represent a further step closer to the traditional sports distribution model.