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On February 15 2012 07:19 Sway.746 wrote:Show nested quote +On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people) If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money. However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT). Poor long-term decision, I think.
Yes the 3% would make money, but they loose on 97% off ad revenue, which you didn't take into consideration. It's always been a tug off war between high viewers to get ad revenue and getting paid viewers to bump the income
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On February 15 2012 07:11 00Visor wrote:Show nested quote +On February 15 2012 06:45 Adreme wrote:On February 15 2012 06:40 00Visor wrote:On February 15 2012 05:51 legaton wrote:
So, i checked all the SEC fillings and this is the money invested in MLG
2011-11-23 - debt + option -2 500 000 dollars
2011-08-12 - debt + option - 3 083 328
2010-12-30 - equity - 3 333 353 dollars
2009-08-31 - equity - 3 499 995 dollars
2008-12-31 - equity + option - 7 500 000 dollars
2007-06-18 - equity - 1 400 000 dollars
2006-11-20 - equity - 25 000 000 dollars
2006-07-31 - equity - 10 000 000 dollars
As you can see, in 6 years and a half, they have filled for a small fortune. I think this kind of numbers give a better idea on how expensive an operation like MLG is.
I'm not saying you should pay 20 dollars per event, but it is clear to me that have a desperate need to monetize the scene.
My informed point of view is you must be mentally challenged to invest any money on e-sports (except, maybe, for a small community based operation like TL, but without expecting any huge ROI). But well, good luck to MLG. If these numbers are true, than MLG fucked up before SC2 already. They had tons of money invested and 2011 was by far their most successful year (in viewers). This new business model could be an act of desperation, but it won't work. If it doestn work then I would think most tournaments are in a lot of trouble. Dreamhack is successful HSC is mildly successful and GSL is succesful and that is about it. No! Thats exactly what I wanted to deny. MLG blowed huge amounts of money before SC2. And now they try their shot with PPV. If MLG fails this means almost nothing for other tournaments who didnt came with these debts and have other business models.
ESL business model is not paying prizes to players (two years late on prize payments!) and venture capital (german investment funds and french banks)
Dreamhack had operating losses ion 2009 and 2010. When David Garpenståhl left Dreamhack, he said DH was nearing bankruptcy (source). If things don't look too bad for them, it is because they are way more than an "e-sports" event now. It's more like a PC showroom now + LAN party.
HSC got a profit for the first time, but their business model is irreproducible (more power to them).
We don't know anything about GSL, but they are catering so much to the foreigner scene, it seems foreigners are their principal source of revenue.
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On February 15 2012 07:21 zul wrote:
Sundance via twitter: "Gold members. An email is on the way tomorrow. In it will be a thing. Hopefully it helps ease the sting."
let`s see
even if they offer the arena's free for this year to gold members, I still think its complete shit out sundance/MLG has handled this situation. they basically took a shit on us, said deal with it, blamed 'some guy with bad math' and now that the outcry is bad enough they want to try and appease us? Fuck off.
(im a gold member)
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On February 15 2012 07:19 Sway.746 wrote:Show nested quote +On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people) If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money. However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT). Poor long-term decision, I think.
Also consider that the significantly larger part of the community will move on to other tournaments, increasing their prestige. Soon enough no one will care about MLG, and even those few who would pay now no longer will.
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IF MLG is losing money let us see the numbers.
IF the article on fnatic gaming's website is true and you did bring in 50 million dollars in revenue that is 50,000,000 and you're losing money, perhaps you're doing something wrong. If you have and keep consistently being in the red why is your company still alive and obtaining investors? How do you persuade people to invest in a supposed drowning company that has been drowning since their inception? And why if you are drowning are you holding an event that destorys profit because you're paying more to run it and could potentially alienate sponsors by having an extremely low amount of viewers.
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On February 15 2012 07:24 rycho wrote:
why are so many people comparing this to going to the movies? aren't "the movies" pretty much universally considered overpriced right now? thats the context i always hear movie tickets mentioned in.
if the best mlg can do is to say "hey, at least we compare favorably with the cliche overpriced entertainment favorably!" i think they're in trouble.
Movies are not going to get any cheaper either though because otherwise they will cease to be a pofitable venture. Entertainment needs money to be sustainable and MLG is trying to get enough to have that power.
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On February 15 2012 07:20 Soap wrote:Show nested quote +On February 15 2012 07:12 JJH777 wrote:
The poll has dropped to 12%. Looking worse and worse for MLG especially since TL is the community where the highest percent of people will be willing to pay. If only 12% of us are willing to pay then I wouldn't be surprised if the number is like half that in the overall community. On the contrary, TL has plenty of internet-savvy people who are notorious for not paying even when they should. Look how there was so many people buying passes just because of Gamebattles they had to revamp the system, but most TLers don't even know what that is. Seems to me the Arena model is meant to be sold as a cable package like UFC, which is a much more reliable business model than begging for contributions against LAN/tournament tie-ins which have nowhere near the same cost structure.
I guarantee people who use TL make up the large majority of people who actually pay for tournaments. You would really have to be blind not to believe that. I don't think internet-savvy is an issue anyone who is watching e-sports is most likely going to be internet-savvy.
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This is way too early to start an esports PPV. You need to build a fan base before you start hitting the pocket. Esports isn't anywhere close to the popularity it could be, start alienating your fanbase now and esports simply won't grow.
Watch "The Social Network"... it might help you understand a few things MLG.
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On February 15 2012 07:26 TechSc2 wrote:Show nested quote +On February 15 2012 07:19 Sway.746 wrote:On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people) If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money. However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT). Poor long-term decision, I think. Yes the 3% would make money, but they loose on 97% off ad revenue, which you didn't take into consideration. It's always been a tug off war between high viewers to get ad revenue and getting paid viewers to bump the income
No, he's taking that into consideration... His point is that the $20 one person pays is worth more than the advertising revenue from 50 people.... which is almost certainly true. It does make it harder for new people to get into starcraft, which makes it harder to grow, but presumably they're counting on their main events and on smaller tournaments to serve that purpose.
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United States22883 Posts
On February 15 2012 07:26 TechSc2 wrote:Show nested quote +On February 15 2012 07:19 Sway.746 wrote:On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people) If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money. However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT). Poor long-term decision, I think. Yes the 3% would make money, but they loose on 97% off ad revenue, which you didn't take into consideration. It's always been a tug off war between high viewers to get ad revenue and getting paid viewers to bump the income
Ad revenue.
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On February 15 2012 07:23 Jibba wrote:Show nested quote +On February 15 2012 07:19 Sway.746 wrote:On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people) If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money. However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT). Poor long-term decision, I think. Remember viewers also cost them money too, so less viewers reduces their bandwidth cost. It's not simply the difference in ad revenue like it would be for TV. Perhaps it's different with the Twitch.tv package they're demoing now.
Bandwidth cost is close to zero compared to their other costs. There is absolutely no way that it was a factor in this decision.
On February 15 2012 07:26 TechSc2 wrote:Show nested quote +On February 15 2012 07:19 Sway.746 wrote:On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people) If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money. However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT). Poor long-term decision, I think. Yes the 3% would make money, but they loose on 97% off ad revenue, which you didn't take into consideration. It's always been a tug off war between high viewers to get ad revenue and getting paid viewers to bump the income
What I meant to say is that 30 people paying $20 will make them more money than 1,000 people watching ads.
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On February 15 2012 07:19 JustJonny wrote:
MLGSundance
Gold members. An email is on the way tomorrow. In it will be a thing. Hopefully it helps ease the sting.
via twitter
Predicting we'll be able to buy the PPV with a 5-10 dollar discount or something which would still be 10-15 dollars more than we expected when we bought the gold pass for, but we'll see tomorrow.
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I think MLG overstated how much people value their product. I mean, the polls are a damn landslide, people don't seem to think the price is fair, and neither would most of them if the price was a half or a quarter of what it is now. The problem for MLG here is that the direct competition is the GSL, which, in comparison, offers:
-Better competition
-A LOT more games
-Lots of payment options to suit many different pockets
-A much more widespread and long lasting fun
-They offer a free live stream which makes them seem a lot less cheap
While the only selling points for MLG are:
-Presence of fan favourite foreigners
-High intensity weekend
MLG set the price tag way too high, when the competition is offering a GIGANTIC bang for your buck in comparison, in my humble opinion, this is just bad marketing, and MLG is set to lose tons of viewers here. It's a very short-sighted move.
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On February 15 2012 07:23 nachtkap wrote:
Those prices would suggest to me that a weekend of MLG is worth more than a season of GSL. That's simply not the case. Especially since the GSL now had tiered pricing.
When it was announced it sounded like winter area would be a normal MLG without spectators. I'm starting to think this was done for hype purposes.
To me it is - it's at an appropriate time, with better image quality, doesn't require download of proprietary software and I don't care about SC2 korean competition (once you follow BW it's like MLS vs La Liga)
Besides, GSL ad-free season pass is $35, $15 more expensive.
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+ Show Spoiler +On February 15 2012 07:29 Sway.746 wrote:Show nested quote +On February 15 2012 07:23 Jibba wrote:On February 15 2012 07:19 Sway.746 wrote:On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people) If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money. However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT). Poor long-term decision, I think. Remember viewers also cost them money too, so less viewers reduces their bandwidth cost. It's not simply the difference in ad revenue like it would be for TV. Perhaps it's different with the Twitch.tv package they're demoing now. Bandwidth cost is close to zero compared to their other costs. There is absolutely no way that it was a factor in this decision.
On February 15 2012 07:26 TechSc2 wrote:Show nested quote +On February 15 2012 07:19 Sway.746 wrote:On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people)
If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money.
However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT).
Poor long-term decision, I think. Yes the 3% would make money, but they loose on 97% off ad revenue, which you didn't take into consideration. It's always been a tug off war between high viewers to get ad revenue and getting paid viewers to bump the income What I meant to say is that 30 people paying $20 will make them more money than 1,000 people watching ads.
but the difference will be 30 people paying to 15000 people watching ads, not 1000
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From Twitter:
MLGSundance Sundance DiGiovanni
Gold members. An email is on the way tomorrow. In it will be a thing. Hopefully it helps ease the sting.
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United States22883 Posts
On February 15 2012 07:29 Sway.746 wrote:Show nested quote +On February 15 2012 07:23 Jibba wrote:On February 15 2012 07:19 Sway.746 wrote:On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people) If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money. However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT). Poor long-term decision, I think. Remember viewers also cost them money too, so less viewers reduces their bandwidth cost. It's not simply the difference in ad revenue like it would be for TV. Perhaps it's different with the Twitch.tv package they're demoing now. Bandwidth cost is close to zero compared to their other costs. There is absolutely no way that it was a factor in this decision. I don't know what their deal with Akamai was, but I think you're underestimating bandwidth. It's not an unsubstantial amount.
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On February 15 2012 07:32 TechSc2 wrote:+ Show Spoiler +On February 15 2012 07:29 Sway.746 wrote:Show nested quote +On February 15 2012 07:23 Jibba wrote:On February 15 2012 07:19 Sway.746 wrote:On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people) If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money. However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT). Poor long-term decision, I think. Remember viewers also cost them money too, so less viewers reduces their bandwidth cost. It's not simply the difference in ad revenue like it would be for TV. Perhaps it's different with the Twitch.tv package they're demoing now. Bandwidth cost is close to zero compared to their other costs. There is absolutely no way that it was a factor in this decision. Show nested quote +On February 15 2012 07:26 TechSc2 wrote:On February 15 2012 07:19 Sway.746 wrote:On February 15 2012 07:14 Mithriel wrote:
Im really curious about difference in revenue between a free stream with quite a lot of ads and the 20$ no free stream variant. See what the best business decision would be. Though we could get the perfect numbers only in a perfect world to calculate which would be best ( or what price would draw most people)
If they only get 3% of the viewership, but are making $20 per person instead of purely the ad revenue, then they're making substantially more money.
However, now their customer base has shrunk thirty-fold, and they're almost certainly still not profitable. If they ever want to be profitable, they will have to lower their cost structure or have more viewers (and charging for, and thereby alienating a large percentage of your potential and current audience hinders that a LOT).
Poor long-term decision, I think. Yes the 3% would make money, but they loose on 97% off ad revenue, which you didn't take into consideration. It's always been a tug off war between high viewers to get ad revenue and getting paid viewers to bump the income What I meant to say is that 30 people paying $20 will make them more money than 1,000 people watching ads. but the difference will be 30 people paying to 15000 people watching ads, not 1000
The poll currently says 12% which I think is a little high for what the actual number will be. If MLG gets 5% of there viewers to pay for it then thats 5000 people and thats a profit for them. The 100k might be enough for them to break even though I think they might need more like 6-8% of there viewership to break even its still a realistic possiblity that this event prooves to be a sucess.
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On February 15 2012 07:31 Soap wrote:Show nested quote +On February 15 2012 07:23 nachtkap wrote:
Those prices would suggest to me that a weekend of MLG is worth more than a season of GSL. That's simply not the case. Especially since the GSL now had tiered pricing.
When it was announced it sounded like winter area would be a normal MLG without spectators. I'm starting to think this was done for hype purposes. To me it is - it's at an appropriate time, with better image quality, doesn't require download of proprietary software and I don't care about SC2 korean competition (once you follow BW it's like MLS vs La Liga) Besides, GSL ad-free season pass is $35, $15 more expensive.
If you think that Korean BW vs Korean WoL is like MLS vs La Liga then what is Korean BW vs "Drewbie vs Ddoro"? Maybe the weirdest statement I've heard all day...
You also compared payments for an ad-free service to one with ads :/ GSL is then 5 dollars more for infinity more hours of starcraft and to be frank, do they even have ads..? :S
I only get ads sometimes and when I do, it's not even comparable to the amount of hot pockets and Nos shit I have to watch every time their stream dies.
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On February 15 2012 07:31 Soap wrote:Show nested quote +On February 15 2012 07:23 nachtkap wrote:
Those prices would suggest to me that a weekend of MLG is worth more than a season of GSL. That's simply not the case. Especially since the GSL now had tiered pricing.
When it was announced it sounded like winter area would be a normal MLG without spectators. I'm starting to think this was done for hype purposes. To me it is - it's at an appropriate time, with better image quality, doesn't require download of proprietary software and I don't care about SC2 korean competition (once you follow BW it's like MLS vs La Liga) Besides, GSL ad-free season pass is $35, $15 more expensive.
yes. it is 15$ more, but it is not for 3 days but for over a month. 
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EPT
