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On February 10 2012 04:07 Dantelew wrote:Show nested quote +On February 10 2012 03:59 jinixxx123 wrote:
Big sponsors are advertising to get their name out there. All that a sponsor should really care about is how large are the viewing numbers regardless if the viewers pay for the stream or not. Look at american football, who the hell pays for that? do you fork out money to watch the superbowl? noooooo.. All you pay is for your cable subscription.
You pay for your cable subscription, the cable company pays the station for the rights to air their channel on their cable, the production company pays the NFL lisencing fees for distribution rights, so that they can air the game, so that you pay for cable to watch the superbowl. Stating you don't pay for the superbowl is a naive comment. This is how cable companies make thier money, the channels make their money by paying for licensing rights and then running advertisements during these programs that they run, and the NFL makes their money through selling these licenses to the production companies (as well as ticket sales).
Actually the Superbowl is on free through an antenna in HD all the time(you do not need cable/satellite). Rotating with CBS/FOX/NBC/ABC yearly. You don't have to spend one cent for the Superbowl in the US. Also if you live locally to your team you get all their games again for FREE on antenna. If you live in California and your team is New York then yes you need DirecTV and the NFL Sunday Ticket to catch all the games.
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On February 10 2012 04:20 UndoneJin wrote:3. How many tournaments could really do a premium model? GSL gets a lucky break because the time difference is so bad for America and they just happen to have the best players in the world constantly competing in their studio. MLG and IPL could pull this off, but what about the NASLs, Dreamhacks, IEMs, etc. etc. etc. .
GSL is the ultimate league. MLG, IPL, NASL, IEM seems like the minor leagues to me.
I go to minor league and college baseball, hockey, american football, and basketball games often for the price of free to $5. That shit is live and in person though. I have a hard time paying for what is essentially minor league SC when I can only watch it over the internet.
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On February 10 2012 04:23 Chill wrote:Show nested quote +On February 10 2012 04:14 SupLilSon wrote:On February 10 2012 04:09 Chill wrote:On February 10 2012 04:04 SupLilSon wrote:On February 10 2012 03:56 Canucklehead wrote:On February 10 2012 03:53 Chill wrote:On February 10 2012 03:48 SupLilSon wrote:On February 10 2012 03:32 KingOfAmerica wrote:On February 10 2012 03:21 1sz2sz3sz wrote:On February 10 2012 03:18 Klipsys wrote:
I find it hysterical how many people are quick to claim eSports is their passion/hobby or whatever, but balk at the idea of *GASP* Spending money on it!?
I spent money on it, I paid for my copy of Starcraft 2. Im not paying to watch other people play it, just like how I dont give my money to the NBA to watch their players play basketball Except you do pay money for that. The cable / satellite provider pays hundreds of millions to the NBA for the right to broadcast their games, and that cost is passed on to you as part of your monthly subscription. If these organizations really loved E-sports then they wouldn't be so hung up on the money. This stupid comment is the crux of the problem. "Spend your money to give me free content or don't bother." Ridiculous. It's ESPORTS, not C(harity)SPORTS Haha, that is a pretty silly comment. Conversely, if players really loved e-sports then they would accept love as salaries and prize money, then the entire e-sports industry could run on love for e-sports!  Honestly maybe they should. People have all these delusions of grandeur of SC2 and E-sports being the next NFL or NBA when in reality SC2 is just a video game. People see HuK, IdrA, etc getting large figure contracts and think that is supposed to be the norm. Even in Korea, the MECHA OF ESPORTS, Starcraft is in reality just a small niche of entertainment. Like I said, it sounds harsh but if half the pros out there right now had to go back to school and get a real job to make money, I wouldn't shed a tear. What's your point? I'm honestly struggling to find it. My point is that SC2 is a hobby for most of us, not a necessity. If I have excess money to donate, it will be to a charity that benefits people in need, not a bunch of people who are disappointed because SC2 wasn't the cash cow they thought it would be. Why would you even post in this thread then? It's like going into a car thread and demanding people ride bicycles and give the extra money to people in need.
I think his point is that there would be no "community" if it were PPV, or a lot smaller, since one of the major reasons most people are interested in competitive gaming is because is free. Maybe i'm wrong though.
I agree of course that tournaments should be profitable, but i think some people overestimate the "commitment" the general community has.
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On February 10 2012 04:14 aLt)nirvana wrote:
Here is my idea which I feel is quite radical, so keep the pitch forks at bay please, just trying to offer an alternative viewpoint.
First of all, I feel in order for any industry to be sustainable, it will have to function as a true free market system which works by letting supply / demand naturally balance itself out, and where players/casters/sponsors are driven naturally by incentives. Like all industries, there needs to be competition/rewards, this improves the overall quality of viewer/player and the industry itself. At the moment all the major events are regulated with very specific criteria that limits the competition / market, with rules in place such as complicated qualification rounds, geographical distances and obligations to their sponsors. The alternative I'm suggesting is the sponsorship dollars get spread across through natural supply / demand instead in the form of a large international site with a free market system.
IMO this could work with a massive website where people can sign up and play and win money in tournaments. This would provide a living for both the players and the casters, and provide an even better option for viewers which in turn attract sponsors - basically aiming to become a sustainable industry in itself. ATM playhem is closest to this model.
So on this site there are MANY various tournaments held DAILY with various prizes and as the entrance fees go up so do the prizes. The tournament entrance fees range from $0.01 for the lower levels to $50 entrance fees for the big leagues where you see $1,500 first prizes for say, 32 player tournaments. All the money goes to the players after minusing transaction costs.
Smurfing: Naturally lower league players won't want to waste time earning less when they can be earning more at their skill level at a higher league. So although they can play in the $0.01 cent games it doesn't make sense.. they end up winning $0.5 or something when they could be winning $5 with the skill level they have. So the tournaments will end up evening itself out naturally..
Casters: Everyone can stream, just like the playhem tournaments. People will naturally decide themselves who are the best and then watch them. Website is able to track viewers and over time these casters earn better priority and can stream the big events. Casters who are good are supported and get money from donations / adverts. This way it weeds out the bad casters and overall viewing quality is improved.
Players: The many daily tournaments provide a proper daily income for players and encourages skilled players who wanna go pro to try harder. You win what you earn. The best players will earn alot, and invest more in playing. The good but not great players still have a chance by practicing hard in their respective league levels and can get encouraged to play more after winning the smaller prizes. Best of all those players who aren't good enough won't have to risk going pro or moving to another country, they will just stop playing because they can't make enough to support themselves.
Sponsors: They pay for the entrance fees of their players. They get certain exposure on the website deliberately such as in the match preview / brackets it has their team logo / and sponsors are shown on the team pages in the website. This has to be set up very carefully so sponsors have the incentive to support their players and get more exposure. Perhaps all streamers will be require to download an overlay that is scripted from the brackets that display the sponsors of both teams, player profile details and stats etc. Money is not wasted on fat salaries for non-performing players and naturally the players who win the most end up getting sponsored, giving the sponsors a return they can "measure".
Site: Doesn't take rake or make a commission. Pretty sure has to be this way or Blizzard will shut it down or want to be involved. They earn revenue from advertisements from gaming companies like Roccat, Razer, Steelseries etc and google ads. They will do okay because if it takes off ALOT of people will be visiting the site. And perhaps they have the money to pay the admins who run the site / tournaments so its self-sustaining.
Admins: Everything is automated as much as possible on the site. One admin per tournament for disputes. Players awarded karma points after disputes to discourage BM / cheating and to make the lives of admins easier.
Live Events: Not sure how this will be done. I honestly think live events are a huge waste of money for everyone involved, from the sponsors who pay the air tickets to the tournament organizers who have to hire a venue. Alot of sponsorship money is being lost there on expensive air tickets / venues which could be better used elsewhere. TSL3 for example was carried out online (except the finals) and it was fantastic and there isn't LAN anymore so game quality doesn't improve live, in fact it inconveniences players who must adjust to jetlag and a new playing envrionment. Sponsors are given adequate coverage online already, for every event there are so many more viewers online watching then those in attendance at the live event.
IMO if a site like this exists the eSports industry will be able to grow faster and further, it will be self-sustaining and able to support the livelihood for many players and casters. For recreational players there will be games to watch everyday, or tournaments that cost almost nothing $0.01-$0.25 to play in. Our player database is there already in terms of size, we need to get all of them playing on one site and yea playhem is closest to this I don't think they have any plans to start charging though I could be wrong.
Anyway those are my thoughts for a sustainable model, and it has to use a free market system.
Someone get this man a medal, this is genius.
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8748 Posts
On February 09 2012 15:03 ThaZenith wrote:
SC2 is doing fine right now. Almost everything is free, with maybe higher quality streams for a few bucks, supported mostly through ads. No one could start trying to force people to pay either, because there's so many other options people could turn to.
SC2 isn't doing fine right now in the sense that there isn't much sustainability. What you've just described is a situation where competitors are gonna undercut each other so much that everyone fails. If there's always someone out there willing to carry out a "loss leader" strategy that is going to attract all the fans, then no "loss leader" strategy ever succeeds.
Things are free to consumers because the producers are using investment money and/or because the producers are using a lot of free labor that oughtn't be free forever. If there isn't a shift to more monetizing, then a lot of things are just gonna fizzle out.
Almost nothing in esports starts with a sustainable model. Almost everything hopes to become sustainable after attracting a lot of positive attention from the community. Becoming sustainable means attracting more sponsors and more potent sponsors and charging money for content. There's only so much ad space. And it seems the demographic that esports attracts isn't one that has a bunch of spending money to use willy nilly on every sponsor that comes along. So get what you can out of sponsors, but mainly just have people pay directly for what they want: esports content.
I'll be damned if most esports fans don't have $30/month to spend for the many hours of entertainment they get from esports. They just feel entitled (not entirely their fault) and they feel some irrational hatred for anyone who is trying to turn a profit, pay their employees and guarantee that the content that everyone loves continues to be produced.
Esports fans aren't dying out there. They aren't grievously wounded. They aren't cut and they don't even have the tiniest scratch. Esports fans aren't bleeding. The only loss of blood that occurs is when the noble ones donate it to the content producers who are on their deathbeds and would otherwise die.
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On February 09 2012 15:36 Blackfoger wrote:
Jerry honestly has no idea what it means to be a successful organization to start, yes I am going there.... His team vVv has not produced results nor are they salaried. When you have very successful business models such as EG that work hard to advertise.
As far as PPV can also take any other sports like football baseball basketball they do successful due to advertising. There are many other avenue's of monetization. SC2 community is small already don't need to alienate more people because the current market of viewers are mostly lower income college males.
Even if this was true; and I don't think it is..you are the LAST person to be making comments like this. Do something even remotely worth-while and then comment on others.
The facts are just like I said on the podcast. I am completely for MLG taking the chance to monetize it's success. However, a few things will change once they do that. Their content needs to be top-notch, if that's what people are paying for..and don't expect to get passed off like you have in the past because you say, "Well, it's not like you pay for it." Because now; people would be paying for it. As long as you are confident in the content you are making..go for it. But put a lot of thought into it first.
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1. Point:
In my Opinion Esport is a sport *sigh* :D
2.Point
I'm passionate about sports.
Conclussion:
I love doing sports be it e or regular. I love watching sports.
Based on this I'm 100% ok with paying for a service, thats gives me a certain Return on Investment, i.e. GSL premium.
The problem I see with making money in Esport is that the broad majority of consumer does not have enough to spend freely.
For example GSL: the yearly pass is what? 100 dollar? For a working single thats not a lot, for a young schoolboy or a student thats a shitload.
And to make money you have to invest money. Who would pay for another IPL/NASL/IEM ? It's all been there, we have all seen that.
But who wouldnt pay for an truely international GSTL? Bring in the big teams, make them establish Teamhouses in Korea, present the teams as a whole, and let them battle it out in several formats, invent something new etc etc.Let everyone see the training matches. Maybe run the first season for free AND THEN you can charge a fee.
Thats basically what the GSL does best, and as far as I know they are doing ok, ofcourse they are not making trillions but that seem to be market leader in a niche market, thats fine for a start i guess.
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On February 10 2012 03:44 Kfcnoob wrote:
eSports is 'cool' and people are giant fans from it being so; charging for a necessary subscription service will drastically lower this.
the community exists because of the cool - just use ads.
'just use ads'. I hear this phrase so often. Well they use ads and then what? Tons of money is magically going to appear? Ads in Esports aren't even remotely comparable to TV ads. The amount of people watching is incredibly small (compared to TV numbers) and the main demographic does not spend very much. You can't run a big league/tournament simply off ads. MLG/ESL/GSL all have subscriptions. Events that do not (IPL, Dreamhack) run at a loss and get financed by other parts of the company.
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On February 10 2012 04:39 Liquid`NonY wrote:I'll be damned if most esports fans don't have $30/month to spend for the many hours of entertainment they get from esports. They just feel entitled (not entirely their fault) and they feel some irrational hatred for anyone who is trying to turn a profit, pay their employees and guarantee that the content that everyone loves continues to be produced.
I don't have $30/month to spend on Starcraft! I bought that GSL lite ticket, but that's all I can justify spending. All my other spending is for Netflix streaming and for things like cheap sporting events, bars, and dating. My 'entertainment' budget is super tight as a college student and I can't blow everything on Starcraft. I could cut out the GSL ticket, but why? It's like skipping the major leagues and paying for the minors.
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On February 10 2012 04:39 Liquid`NonY wrote:Show nested quote +On February 09 2012 15:03 ThaZenith wrote:
SC2 is doing fine right now. Almost everything is free, with maybe higher quality streams for a few bucks, supported mostly through ads. No one could start trying to force people to pay either, because there's so many other options people could turn to. SC2 isn't doing fine right now in the sense that there isn't much sustainability. What you've just described is a situation where competitors are gonna undercut each other so much that everyone fails. If there's always someone out there willing to carry out a "loss leader" strategy that is going to attract all the fans, then no "loss leader" strategy ever succeeds. Things are free to consumers because the producers are using investment money and/or because the producers are using a lot of free labor that oughtn't be free forever. If there isn't a shift to more monetizing, then a lot of things are just gonna fizzle out. Almost nothing in esports starts with a sustainable model. Almost everything hopes to become sustainable after attracting a lot of positive attention from the community. Becoming sustainable means attracting more sponsors and more potent sponsors and charging money for content. There's only so much ad space. And it seems the demographic that esports attracts isn't one that has a bunch of spending money to use willy nilly on every sponsor that comes along. So get what you can out of sponsors, but mainly just have people pay directly for what they want: esports content. I'll be damned if most esports fans don't have $30/month to spend for the many hours of entertainment they get from esports. They just feel entitled (not entirely their fault) and they feel some irrational hatred for anyone who is trying to turn a profit, pay their employees and guarantee that the content that everyone loves continues to be produced. Esports fans aren't dying out there. They aren't grievously wounded. They aren't cut and they don't even have the tiniest scratch. Esports fans aren't bleeding. The only loss of blood that occurs is when the noble ones donate it to the content producers who are on their deathbeds and will die unless they get that blood.
I think the main problem here is not that epsorts fans don't have $30/month, it's just that there are substitute products (e.g. TV, other internet activates, etc.) that draw their attention, and that ultimately SC2 isn't that much better than the easily available, cheaper, and high value-per-dollar substitutes to plop money down on at the end of the day. You really have to love competitive SC2 to be spending money on it, and it will remain a niche market because only a handful of people are really willing to do that. Those few people will sustain a small industry.
The best thing that can happen for this industry right now is for the SC2 bubble to burst. Once the scene has consolidated, things should be more stable, although I do expect it to slowly die over the years and eventually fade away. The run may last 5-15 years, depending on how re-invigorating the expansion packs are, but I don't think there's a true end-game model here.
Maybe if games are accepted as a bigger part of mainstream culture (as a type of spectator entertainment) in the 1st world countries that have disposable income, it may change. 1st world countries are just coming to terms with games as mainstream, and games as a potential art form. The step needed to make any game a true 'spectator sport' won't happen for another good 30-50 years, if it ever happens at all.
If you want an end-game, or at least a lasting/sustainable model, I think you have to look at e-sports as a whole, rather than SC2. When I say it as a whole, I don't mean as a whole community, like most people do, but from a more pragmatic view. New games come out to replace old games, viewers, sponsors, money and professionals have to jump from game to game to keep on going, generating interest and attracting new money. E-sports as a whole will live on, in new games, likely in the same demographic, but SC2 will follow the fate of many 'esports' games before it and die a slow death until someone pulls the plug. It is the nature of being one of the games in the 'esports' environment, and will likely continue to be so in the foreseeable future. This larger 'esports' model may be able to ride the culture wave I mentioned in the last paragraph, and may find a foothold with enough money to be sustainable outside of pure sponsorships... eventually.
If you look at western E-sports, in reality E-sports isn't one community, it's a competition, and newer games will continue to displace older ones, and the scene will continue to move on. I think perhaps that is the business reality you have to understand, that money will flow from one game to another, and you have to capitalize on the 'hottest stuff' at the moment to draw viewers, sponsorship dollars, and paid-for content. MLG seems to be doing ok at this, as they've gone from game to game to game, and try to catch the next big game as it comes up. In the longer term, the SC2 community is just one cog in the e-sports wheel, and eventually it too will be supplanted. The likely candidates right now are the MOBA (or ARTS) games.
I see it as sad but inevitable.
In summary:
-The SC2 scene in the short term is probably sustainable, if the bubble is popped before it deals too much damage.
-In the long term, SC2 itself is probably not sustainable under any model
-E-sports at as whole is likely sustainable, but it runs under a model where 'esports' moves from game to game to game as technology progresses and new games are developed. We see this in action somewhat today, and if there is any future in an ongoing 'for life' job, it would likely be here.
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On February 10 2012 04:55 Raygun wrote:Show nested quote +On February 10 2012 04:39 Liquid`NonY wrote:I'll be damned if most esports fans don't have $30/month to spend for the many hours of entertainment they get from esports. I don't. I bought that GSL lite ticket, but that's all I can justify spending. All my other spending is for Netflix streaming and for things like cheap sporting events, bars, and dating. My 'entertainment' budget is super tight as a college student and I can't blow everything on Starcraft.
Bars and dating are expensive. Even drinking the cheapest beer at the divey-est of dive bars, you're still gonna blow $30 in a night or two and that's if you're only paying for yourself.
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On February 10 2012 04:55 Raygun wrote:Show nested quote +On February 10 2012 04:39 Liquid`NonY wrote:I'll be damned if most esports fans don't have $30/month to spend for the many hours of entertainment they get from esports. They just feel entitled (not entirely their fault) and they feel some irrational hatred for anyone who is trying to turn a profit, pay their employees and guarantee that the content that everyone loves continues to be produced. I don't. I bought that GSL lite ticket, but that's all I can justify spending. All my other spending is for Netflix streaming and for things like cheap sporting events, bars, and dating. My 'entertainment' budget is super tight as a college student and I can't blow everything on Starcraft. I could cut out the GSL ticket, but why? It's like skipping the major leagues and paying for the minors.
No one is telling you how to spend your money. What people like Tyler are sick of reading, is all of the pretenders who claim they support e-sports, but will never spend a dime on it, and then have the audacity to ask for free streams, more/better content, better casters etc. It's the sense of entitlement that's disturbing, and disheartening. The fact is, the money you spend at the bar, could be spent on SC2. Weather or not you do that is your prerogative
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Forcing people to PAY for content as far as tournament coverage goes (whether it is audio/video, articles, behind the scenes, whatever) would rapidly decline the amount of viewers, that much I am sure of. But, in my opinion, it would actually lessen the interest in esports in general.
If I was ever forced to pay to watch MLG, I would just simply stop watching it. Sure, I enjoy and like it, but I wouldnt pay for it. It's the same with UFC, I dont pay to watch it. If I want to see a UFC event on TV, I will go to a bar/friends house to watch it and my money would go into buying food instead.
You have to ask yourself this:
If you are watching MLG, but not paying for it, are you HURTING MLG? Absolutely not. Having viewers is better than NOT having viewers right?
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On February 10 2012 04:26 Doodsmack wrote:Show nested quote +On February 10 2012 04:14 SupLilSon wrote:On February 10 2012 04:09 Chill wrote:On February 10 2012 04:04 SupLilSon wrote:On February 10 2012 03:56 Canucklehead wrote:On February 10 2012 03:53 Chill wrote:On February 10 2012 03:48 SupLilSon wrote:On February 10 2012 03:32 KingOfAmerica wrote:On February 10 2012 03:21 1sz2sz3sz wrote:On February 10 2012 03:18 Klipsys wrote:
I find it hysterical how many people are quick to claim eSports is their passion/hobby or whatever, but balk at the idea of *GASP* Spending money on it!?
I spent money on it, I paid for my copy of Starcraft 2. Im not paying to watch other people play it, just like how I dont give my money to the NBA to watch their players play basketball Except you do pay money for that. The cable / satellite provider pays hundreds of millions to the NBA for the right to broadcast their games, and that cost is passed on to you as part of your monthly subscription. If these organizations really loved E-sports then they wouldn't be so hung up on the money. This stupid comment is the crux of the problem. "Spend your money to give me free content or don't bother." Ridiculous. It's ESPORTS, not C(harity)SPORTS Haha, that is a pretty silly comment. Conversely, if players really loved e-sports then they would accept love as salaries and prize money, then the entire e-sports industry could run on love for e-sports! Honestly maybe they should. People have all these delusions of grandeur of SC2 and E-sports being the next NFL or NBA when in reality SC2 is just a video game. People see HuK, IdrA, etc getting large figure contracts and think that is supposed to be the norm. Even in Korea, the MECHA OF ESPORTS, Starcraft is in reality just a small niche of entertainment. Like I said, it sounds harsh but if half the pros out there right now had to go back to school and get a real job to make money, I wouldn't shed a tear. What's your point? I'm honestly struggling to find it. My point is that SC2 is a hobby for most of us, not a necessity. If I have excess money to donate, it will be to a charity that benefits people in need, not a bunch of people who are disappointed because SC2 wasn't the cash cow they thought it would be. We get it, you are completely fine with, and are on the verge of encouraging, the death of western pro SC2. However this thread is concerned with ways to help it survive. Since you don't care about that discussion, it's a bit confusing why you would repeatedly post in this thread.
Ok, maybe I was being way too critical and not constructive at all. You mistake me, I am not in any way "enouraging the death of western pro SC2", but I can see how my cynicism can be misconstrued that way. I just completely disagree with the method of PPV for SC2. The point I was trying to make was that for many people SC2 is a hobby and having to pay to watch these tournaments, with so many going on, is going to decrease viewership immensely. This is just my speculation and could be completely off, maybe 90% of people who watch streams now would continue to pay with a PPV system, but I guess surveys would need to be done to determine that. I think maybe more local events with admission fee would be a better system and maybe find a less direct method of making money from streams. I know a number of my friends and CSL teammates would love to go to MLG like events and pay to go but they rarely come around. I also realize that these live events are really expensive, but what about smaller events at like colleges? I know if MLG threw an event at my school tons of people would come out to check it out. I'd just be willing to bet that a lot of the current viewers only watch because they can for free.
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How many people would have paid for SC2 if you could play on Battle.Net with a pirated copy? That's the problem, the culture of gaming isn't used to spending money for things that they can get for free. If I go to demonid right now, and cross check the IP's of the people who have torrented the GSL, and the people who post on TL calming to support e-sports, what's that going to look like?
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On February 10 2012 05:06 Klipsys wrote:
How many people would have paid for SC2 if you could play on Battle.Net with a pirated copy? That's the problem, the culture of gaming isn't used to spending money for things that they can get for free. If I go to demonid right now, and cross check the IP's of the people who have torrented the GSL, and the people who post on TL calming to support e-sports, what's that going to look like?
if you can't even play on bnet 1.0 with a pirated copy and can only play on priv servers your argument is invalid. If there was an alternative server your argument would be valid.
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On February 10 2012 04:38 Shawp wrote:Show nested quote +On February 10 2012 04:14 aLt)nirvana wrote:
Here is my idea which I feel is quite radical, so keep the pitch forks at bay please, just trying to offer an alternative viewpoint.
First of all, I feel in order for any industry to be sustainable, it will have to function as a true free market system which works by letting supply / demand naturally balance itself out, and where players/casters/sponsors are driven naturally by incentives. Like all industries, there needs to be competition/rewards, this improves the overall quality of viewer/player and the industry itself. At the moment all the major events are regulated with very specific criteria that limits the competition / market, with rules in place such as complicated qualification rounds, geographical distances and obligations to their sponsors. The alternative I'm suggesting is the sponsorship dollars get spread across through natural supply / demand instead in the form of a large international site with a free market system.
IMO this could work with a massive website where people can sign up and play and win money in tournaments. This would provide a living for both the players and the casters, and provide an even better option for viewers which in turn attract sponsors - basically aiming to become a sustainable industry in itself. ATM playhem is closest to this model.
So on this site there are MANY various tournaments held DAILY with various prizes and as the entrance fees go up so do the prizes. The tournament entrance fees range from $0.01 for the lower levels to $50 entrance fees for the big leagues where you see $1,500 first prizes for say, 32 player tournaments. All the money goes to the players after minusing transaction costs.
Smurfing: Naturally lower league players won't want to waste time earning less when they can be earning more at their skill level at a higher league. So although they can play in the $0.01 cent games it doesn't make sense.. they end up winning $0.5 or something when they could be winning $5 with the skill level they have. So the tournaments will end up evening itself out naturally..
Casters: Everyone can stream, just like the playhem tournaments. People will naturally decide themselves who are the best and then watch them. Website is able to track viewers and over time these casters earn better priority and can stream the big events. Casters who are good are supported and get money from donations / adverts. This way it weeds out the bad casters and overall viewing quality is improved.
Players: The many daily tournaments provide a proper daily income for players and encourages skilled players who wanna go pro to try harder. You win what you earn. The best players will earn alot, and invest more in playing. The good but not great players still have a chance by practicing hard in their respective league levels and can get encouraged to play more after winning the smaller prizes. Best of all those players who aren't good enough won't have to risk going pro or moving to another country, they will just stop playing because they can't make enough to support themselves.
Sponsors: They pay for the entrance fees of their players. They get certain exposure on the website deliberately such as in the match preview / brackets it has their team logo / and sponsors are shown on the team pages in the website. This has to be set up very carefully so sponsors have the incentive to support their players and get more exposure. Perhaps all streamers will be require to download an overlay that is scripted from the brackets that display the sponsors of both teams, player profile details and stats etc. Money is not wasted on fat salaries for non-performing players and naturally the players who win the most end up getting sponsored, giving the sponsors a return they can "measure".
Site: Doesn't take rake or make a commission. Pretty sure has to be this way or Blizzard will shut it down or want to be involved. They earn revenue from advertisements from gaming companies like Roccat, Razer, Steelseries etc and google ads. They will do okay because if it takes off ALOT of people will be visiting the site. And perhaps they have the money to pay the admins who run the site / tournaments so its self-sustaining.
Admins: Everything is automated as much as possible on the site. One admin per tournament for disputes. Players awarded karma points after disputes to discourage BM / cheating and to make the lives of admins easier.
Live Events: Not sure how this will be done. I honestly think live events are a huge waste of money for everyone involved, from the sponsors who pay the air tickets to the tournament organizers who have to hire a venue. Alot of sponsorship money is being lost there on expensive air tickets / venues which could be better used elsewhere. TSL3 for example was carried out online (except the finals) and it was fantastic and there isn't LAN anymore so game quality doesn't improve live, in fact it inconveniences players who must adjust to jetlag and a new playing envrionment. Sponsors are given adequate coverage online already, for every event there are so many more viewers online watching then those in attendance at the live event.
IMO if a site like this exists the eSports industry will be able to grow faster and further, it will be self-sustaining and able to support the livelihood for many players and casters. For recreational players there will be games to watch everyday, or tournaments that cost almost nothing $0.01-$0.25 to play in. Our player database is there already in terms of size, we need to get all of them playing on one site and yea playhem is closest to this I don't think they have any plans to start charging though I could be wrong.
Anyway those are my thoughts for a sustainable model, and it has to use a free market system. Someone get this man a medal, this is genius.
Reading that model... it sounds like the same format as internet poker sites (which, admittedly, have been working just fine for them). I'd support this kind of model. PPV is not the way to go. PPP (Pay per play) sounds more reasonable.
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As a consumer and SC2 fan, I'd rank the value of an MLG tournament above that of most movies. I'd rather pay $8 for 3 days of MLG than the $8 I paid for Captain America (and that movie was ok). I have a real job now, but I'd like to say this would be true back when I was a broke-ass college student, too. I certainly paid $8 for 2 hours of mediocre movies back then.
However, when I hear PPV for SC2, I feel like that implies bigger dollar figures. I'm skeptical that people would pay $20-$30 for one tournament. Obviously, there's a sweet spot and I hope that organizers figure out what that is. I definitely believe that sc2 tournaments and leagues provide a service with real value and I hope they find the business model that sustains it.
I wonder what would happen if MLG charged $8 to watch all games for a tournament, but gave the first game of each match away for free (similar to GSL). How many subscribers would it take to make that worthwhile?
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Also, does anyone know how Broodwar viewing is done in Korea? Would it be possible to emulate whatever system they use? It is successful, no?
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Just have to add something that a marketing professor once told me, "If they tell you they want it for free, never forget that they WANT it."
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EPT
