Soaring e-sports viewership driven by online video platforms

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league of legends The most popular e-sports game in the world in 2013 was Riot Games? League of Legends. The next biggest titles are Valve’s Dota 2 and Activision Blizzard’s StarCraft II. ?E-sports videos have rapidly transformed from a niche activity into a widely-watched, global, cross-platform entertainment category,? said Dan Cryan, senior director for digital media research for IHS. ?Several factors are contributing to the surge in e-sports viewing. These include the fact that key game titles have reached maturity and game publishers are taking a major role in promoting e-sports competitions. Furthermore, e-sports viewing has been boosted by the emergence of online video platforms that are capable of handling large-scale live audiences.? Online viewership key to growth The rise of online video streaming platforms is key to allowing e-sports viewership to flourish. Before live online streaming platforms became available, e-sports programming in the Western World was largely consigned to highlight packages on major channels or live games on little-known cable networks. However, online e-sports viewership exceeded that of television for the first time in 2013, with nearly triple the number of hours of viewing. By 2018, online consumption will represent the overwhelming majority of time spent watching e-sports, accounting for nearly 90 percent of viewing hours. The rise of online video platforms like Twitch has helped the major e-sports events achieve large audiences by aggregating viewers from around the world. Individually, these regional audiences may be too small to be viable on traditional television but by aggregating e-sports viewers, platforms like Twitch and YouTube can achieve real scale. A perfect storm of opportunity The growth in e-sports video is coming from a wide variety of sources including video game specialist sites like Twitch, Azubu and MLG as well as more generalist services like YouTube, Dailymotion, and Tencent. Twitch, in particular, has seen explosive growth, going from 20 million monthly unique viewers in 2012 to 45 million in 2013, and has now become one of the few independent video services offering non-traditional video to have achieved significant, international scale since YouTube came of age. E-sports video lends itself particularly well to one of the fastest growing parts of the online advertising business: programmatic video. E-sports videos are often live, international, and the audiences are data rich. This makes for a perfect storm of opportunity for programmatic buying as audiences are difficult to predict and often located in places where traditional ad sales tactics would be inefficient. However, the data means they can be targeted effectively. The business opportunity, combined with explosive audience growth makes companies like Twitch potentially interesting acquisition targets, not only for Google, but also for companies like Yahoo, AOL and Tencent. e-sports Return on investment looks more positive By 2018 IHS expects e-sports video to be worth $300 million per year, globally. Major game publishers are diverting significant marketing budgets toward the provision and support of e-sports based on their own games. For example, Wargaming.Net confirmed it would be spending $10 million on World of Tanks e-sports alone in 2014. This burgeoning advertising opportunity gives these companies a real chance of recouping more of this investment and drives down commercial risk. At present, few game publishers are aggressively accessing the advertising value chain related to their games. But given the unstable nature of sponsorship and pay-per-view revenues, this fast-growing revenue stream could be their best chance of tipping e-sports strategies into profit. “While advertising in and around games has often proved to be a difficult proposition, advertising in online video is commonplace,? said Piers Harding-Rolls, director for games research at IHS. ?This form of advertising gives games companies a much better opportunity of accessing the advertising value chain in a successful and meaningful way and offers these companies a route to profitable return on investment from their e-sport initiatives.” ]]>

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