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ottersareneat
Profile Joined November 2010
United States55 Posts
Last Edited: 2012-02-14 07:23:30
February 14 2012 06:07 GMT
#1
So, the upcoming MLG Arena event is going to be PPV-only, priced at $20 for the entire weekend, and there are many within the community who aren’t too happy about it. A recent TL poll shows that only 15% of respondents intend to purchase a weekend pass. Many have vowed to instead turn their attention to Assembly, which runs on the same weekend as MLG Arena, and offers a free stream.

EG’s been getting a lot of questions about the situation, and I’d like to clarify our stance on some of the issues.

Why isn’t EG part of the MLG referral program for the Winter Arena?
MLG offered us the opportunity to participate in their referral program for the upcoming event, but we declined, for several reasons. Before going into why we declined, I’d actually like to applaud Sundance, Lee, and everyone at MLG for a moment, because they took action and proactively composed a revenue-sharing program of sorts, which is the kind of thing that we desperately need to exist between teams and tournaments in this industry. It’s a notable first step, and I think they deserve credit for being willing to go there.

With that being said, allow me to elaborate on why EG declined to participate in the program. Our overarching reason ties directly into another common question we’ve been getting:

What do you think of the $20 price point?
I think it’s too high - especially within the context of how other SC2 content providers’ packages are priced. I think that the weekend should cost $10. I think MLG would actually make more money with a $10 price tag for the weekend pass, because I think they’d get more than twice the subscribers at $10 than they’ll get at $20. But that may be just me.

Anyway, that’s the primary, overarching reason why EG is not participating in the referral program. As a pro team, in participating in any referral program like this, you’re essentially agreeing to try and convince your fans and community to buy a particular product. You’re basically saying, “Hey, we think this product’s pretty cool, we think it’s worth your money, and ohbytheway, if you enter this code when you’re buying it, you’ll help us earn a commission on the sale.” In that sense, participating in a program like this inherently involves some kind of product endorsement (y’know, the whole “we think it’s worth your money” part), and we at EG just don’t think the weekend pass is priced correctly.

Bottom line: we weren’t willing to ask our loyal fans to spend money on a $20 dollar product that we think should’ve cost $10, while also ourselves profiting in the process. And that’s the main reason why we’re not in the referral program. To be honest, we weren’t really thrilled with the details of the program itself either, but that reasoning was secondary to the aforementioned.

But with all of that being said, and after spending three paragraphs explaining why EG declined to participate in the referral program and why I don’t think the Winter Arena pass is priced correctly, I’m now going to try and warm you guys up to buying it anyway (and, remember, as someone who declined to be a referrer, I’m not making money on this). My reasoning ties into another common question we’ve been getting from the community:

Why PPV-only in the first place? Why no free stream?
Look, I mean, I’ll be the first one to say that I’m not thrilled - at all - with any event being PPV-only. Every pro team, as a business, acts as a reseller of advertising services. Team A essentially purchases advertising space from Player X (via a contract that requires the player to, for example, wear a particular shirt), and then resells it to Sponsor Y (via, for example, placing the sponsor’s logo on said shirt).

This is what pro teams have to do in order to stay viable as businesses. And, inherent in this model is a huge reliance on tournaments (third-party businesses that teams usually don’t have any kind of formal relationship with) to do their part, construct the virtual (or real-life) stadium, and bring the virtual (or real-life) spectators. Because, if there are only ten people watching an event, it doesn’t matter how many logos are on my team shirt, or how big those logos are, they're still only going to be seen by ten people.

So, as someone who’s relying on MLG to bring in big viewership numbers in order to maximize the value which I can correspondingly report to my sponsors, the prospect of a PPV-only event (which, it seems, will result in an 80-90% decrease in spectatorship overall) isn’t something I’m happy about.

...But at the same time, I absolutely get why MLG wants to/has to give it a shot.

We’re at (and when I say “we,” I mean, teams, tournaments, content providers, everyone) an incredibly crucial moment in the lifespan of this industry. We’re at a point at which we, as an industry, need to become less reliant on third-party, outsider revenue (like corporate sponsors), and increase the percentage of our revenue that’s generated within the eSports ecosystem (direct-to-consumer revenue like subscriptions and merchandise).

The reason for this is that it’s actually still way too hard for teams and tournaments (including those you guys view as the most prestigious and the richest in all of eSports) to make things work financially. Trying to remain viable as a business based on sponsorships and non-industry revenue alone is an unbelievably dangerous path to walk, and it’s just not sustainable in the long term. And I say this as the mind behind what is commonly viewed as the richest pro team in the industry right now.

eSports companies, whether you’re talking about EG, or MLG, need to increase their direct-to-consumer revenue in order to survive long-term. For EG, that means selling more merchandise in our store, and offering a monthly EG subscription package for our fans (which you’ll see later this year, with the release of our new website). For MLG, that means - very similarly - selling more merchandise in their store, and, you guessed it, offering more subscription-based stuff (such as the Winter Arena weekend pass).

Now, does this mean that it’s okay for entities like EG or MLG to force subscription packages down your throats this year? No, of course not. I’m a huge proponent of freemium business models, and I plan on structuring EG’s upcoming subscription stuff accordingly. I wish (for a variety of reasons) that MLG would take a freemium approach (i.e., free low-quality stream, PPV high-quality stream) to their Arena events, just as they’ll do for their Championship events.

But, the bottom line is that they’ve decided that, in order to be viable as a business in the long-term, this is where they need to draw the line in terms of where to generate more direct-to-consumer revenue. It’s not that Sundance is trying to Scrooge McDuck it up and swim freestyle through Olympic-sized pools of money. He’s just trying to make his business sustainable in the long run - and that’s something I can absolutely empathize with.

You guys, as a community, talk a lot about “supporting eSports,” and really do a great job of it. I think that the StarCraft community, in particular, is better at doing so, and overall more generous, than any other professional gaming community. You guys support your pro teams (to those who’ve bought EG merchandise: thank you very, very much), and you’ve also spent a lot of money on premium content (like the GSL, and, ahem, MLG). And I hope - I truly, sincerely hope - that after reading this very long blog, you’re more open to spending $20 on a weekend pass for MLG’s upcoming event (yes, even though I don't think it's priced correctly).

For those of you who came into reading this ready to spend the $20 because you thought it was the right price for MLG’s product, I hope you still spend the $20. But, for those of you like me, who want to support eSports, and want to see prominent eSports companies like MLG stay sustainable long-term by increasing their direct-to-consumer revenue, but at the same time still think that $20 is too high of a price point (and/or think that the Arena broadcasts should be free/discounted for those who previously purchased Gold packages), please do one of the following:

A) Purchase the $20 pass for this upcoming event, but make it abundantly clear to MLG (either via emailing them, or posting on this TL thread, or Tweeting Sundance) that you will not be purchasing a pass for the next Arena event unless the price point is reduced.

B) Don’t purchase the $20 pass for this upcoming event, but make it abundantly clear to MLG (through the same avenues of communication as above) that you would have bought a pass if the price were lower and more reasonable.

C) If you’re a Gold member, whether you purchase the $20 pass or not, make it abundantly clear to MLG that you feel you deserve, at the very least, a discount on the Arena events.

or D) If you don't like any of the above, reach out to MLG in some kind of meaningful way, and tell them what they need to do in order to take your money. They'll listen.

Just, whatever you do, don't decide to punish MLG by giving them no feedback at all. It won't help them, and it certainly won't help you get what you want.

As for myself, I've selected option A. Sundance has my twenty bucks this time, and there's already an email in his inbox right now stating that, if he decreases the price for the next Arena event, he'll be able to take more of my money.

Thanks for your time.

-Alexander (CEO, Evil Geniuses)
@ottersareneat on Twitter

Edit: Added the polls.

Poll: Which option will you pursue?

Option B (1191)
 
67%

Option A (235)
 
13%

Option C (172)
 
10%

Other (108)
 
6%

Option D (75)
 
4%

1781 total votes

Your vote: Which option will you pursue?

(Vote): Option A
(Vote): Option B
(Vote): Option C
(Vote): Option D
(Vote): Other



Poll: How much would you pay for MLG PPV?

I wouldn't even buy it for $10 or less. (959)
 
39%

I'd pay $10, but not $20. (945)
 
38%

I'm fine with the $20 price point, but I'd gladly pay $10. (205)
 
8%

I bought Gold, and I think I should receive the Arena passes at no extra charge. (169)
 
7%

I bought Gold, and I'd pay $5 if the regular price were $10. (111)
 
5%

I bought Gold, and I'd pay $10 if the regular price were $20. (67)
 
3%

2456 total votes

Your vote: How much would you pay for MLG PPV?

(Vote): I'm fine with the $20 price point, but I'd gladly pay $10.
(Vote): I'd pay $10, but not $20.
(Vote): I wouldn't even buy it for $10 or less.
(Vote): I bought Gold, and I'd pay $10 if the regular price were $20.
(Vote): I bought Gold, and I'd pay $5 if the regular price were $10.
(Vote): I bought Gold, and I think I should receive the Arena passes at no extra charge.







i like otters because they're neat and they hold hands while swimming backward.
Bowzer
Profile Joined May 2010
Canada214 Posts
Last Edited: 2012-02-14 06:21:59
February 14 2012 06:10 GMT
#2
As a disgruntled gold member, I will be doing option C.

For me it isn't about the 20 dollars, I spent 20 dollars on supper tonight. It's the principle of how Sundance convinced us that buying gold memberships was helping pro players and e-sports, and that we'd see big things this year depending on the amount of gold subscribers they got.

Also, I don't see how going PPV at this juncture is going to grow the sport.

Thanks for the support Alex!
A drinking community with a gaming problem.
quantumslip
Profile Joined May 2010
United States188 Posts
February 14 2012 06:17 GMT
#3
Alex, thanks for posting this! You have an unique view and insight into how things really go, instead of baseless speculation as to the nature of the business. I'm glad that you have posted a good medium/compromise as to how things should be done in your opinion. And your ideas certainly has more weight than most people here in this community.
rawr!
pieisamazing
Profile Joined May 2009
United States1234 Posts
February 14 2012 06:18 GMT
#4
I always enjoy hearing your perspective. Thanks very much for the post.
connoisseur
Proko
Profile Joined February 2011
United States1022 Posts
February 14 2012 06:18 GMT
#5
I think 2012 is the year where we see big SC2 cutbacks, growth and revenue are not keeping up with spending.

I would love to pay for MLG's arena, but 20$ is just too high.
Caster duos should compliment each others' strengths. "You look very handsome today, Tasteless."
Sixen
Profile Joined April 2010
United States126 Posts
February 14 2012 06:19 GMT
#6
Interesting read, Alex.
SC2Mapster Community Manager & Battle.net Forum MVP
Jisall
Profile Blog Joined January 2011
United States2054 Posts
February 14 2012 06:19 GMT
#7
Shouldn't this be in the MLG thread?
Monk: Because being a badass is more fun then playing a dude wearing a scarf.. ... Ite fuck it, Witch Doctor cuz I like killing stuff in a timely mannor.
MarkyO
Profile Joined October 2010
United States20 Posts
February 14 2012 06:19 GMT
#8
I support everything and anything Alex says.
shindigs
Profile Blog Joined May 2009
United States4795 Posts
February 14 2012 06:20 GMT
#9
Repeating what I posted in the other thread:

I agree that the $20 is too high, but is the perfect event for MLG to experiment with an extreme PPV model to gauge the reception.

I'm assuming that this studio event will be way cheaper than any live event they've put on, and it will be interesting to see how much they make for it. IMO, they have enough "goodie" points to throw this sort of pricing experiment out there and just see how much people pay. Also, if their event is super solid, people may just spread the good word. If they make enough even with the $20 price point deterring most viewers away, more power to them. That might even encourage them to drop the price and make even more if they see a $20 price point does good for them.

They're not tampering with the live event, and the pricing for studio events can easily be changed. I don't blame MLG for doing this and I actually think it's a bit smart to stir up the community a bit over the issue. Interested to see how the weekend will go.
Photographer@shindags || twitch.tv/shindigs
JordanPoC
Profile Joined March 2011
United States5 Posts
February 14 2012 06:20 GMT
#10
Great set of points Alex. You've made it clear and concise in what you see as an attempt to grow e-sports, and still promote viewership and overall revenue for everyone. I'll do option A. You've convinced me. I'll get to emailing MLG, or Sundance or someone as soon as I find that address.

Go EG!
¯\_(ツ)_/¯
StarStruck
Profile Blog Joined April 2010
25339 Posts
Last Edited: 2012-02-14 06:24:47
February 14 2012 06:21 GMT
#11
I think it's way too early to be trying to sell PPVs as well. From their charts they believe they'll make more at the $20 price point.

Other thing that puzzles me is the fact they're flying all of the players down for what exactly? I want to know what promotional materials they have lined up. I don't see the marketing strategy and this announcement was incredibly late.

This is way too short-term.

Buying the ticket and voicing your concerns isn't productive either. You would still be supporting it.

Take the money and run.

Good song.
NoctemSC
Profile Blog Joined November 2011
United States771 Posts
February 14 2012 06:22 GMT
#12
Very well written, you do make quite a convincing argument.
A lot of people don't understand the major events and teams can't surivive long term soley off add and sponsorship revenue.
Why do you guys think almost every pro team has a store on their website? Because that is the most direct way for them to profit.
The professional scene is a business and it needs to be treated as such. Hand out are great and all but every once in a while we need to cough up a little extra.

(Note: I'm not agreeing with the $20 charge they're proposing, I think $10 is much more reasonable but I've opted for option A. simply because It's going to be an awesome event and I'm splitting it with 5 friends.)
http://www.twitch.tv/noctemsc <--Most epic fun times
Otolia
Profile Blog Joined July 2011
France5805 Posts
February 14 2012 06:23 GMT
#13
Once again EG is leading us the good way ... Well written. I agree.

I wonder if I should mail MLG about not updating the LP but if we don't their admin won't be able to organize a correct tournament. (sarcasm)

PS : Shoutout to blazh0r, you know why.
ETisME
Profile Blog Joined April 2011
12476 Posts
February 14 2012 06:24 GMT
#14
Thanks Alex, hope they can figure another way instead of PPV, glad to hear your opinion on this.
It's not TOO expensive but it is still some 20 bucks for the matches that I will be able to watch
其疾如风,其徐如林,侵掠如火,不动如山,难知如阴,动如雷震。
Immaterial
Profile Blog Joined September 2010
Canada510 Posts
February 14 2012 06:25 GMT
#15
Great post, thank you. I think that the PPV model is perfectly fine and is useful in injecting some more money into our favorite eSports organizations. I do, however, agree that the $20 pricetag is quite steep considering the length of the event and the amount of content that you get for buying the package. In the future I think the fans as well as MLG would benefit much more from a $10 pricetag, as you suggest.
It is the mark of an educated mind to be able to entertain a thought without accepting it.
Audi309
Profile Blog Joined October 2010
United States90 Posts
February 14 2012 06:25 GMT
#16
On February 14 2012 15:19 MarkyO wrote:
I support everything and anything Alex says.


And I agree with MarkyO, soooo. :D

Very thoughtful post - I really appreciate it!

It is a bold move for MLG to try to sell this to the community, and I think it's worth noting that how people respond will not just be seen and felt by MLG, but all the other tournaments as well. If this is industry is going to grow over time, something needs to change - and this may be a good step in the right direction - even if it's painful for the various parties involved.
Mr. Nefarious
Profile Joined December 2010
United States515 Posts
February 14 2012 06:26 GMT
#17
Thank you for some real world insight on a difficult issue. I'm really, really happy to see MLG move towards a more self sustained future, it can only be better for all of us and will actually produce better content in the end. For those of you hating, take a minute to think. If MLG can grow, expand their business and revenue and then reinvest a bit of that into production, it will benefit all of us. I do think that $20 is a bit steep for just a weekend... I guess if it's literally better then GSL Code S "For $20 you get a full weekend of nothing but the absolute best StarCraft 2 in the world." then for $20 it will be completely worth it. At $10 I wouldn't have even given a second thought... instant purchase, I love MLG. $15 I would've had to think for a bit about it and at $20... I'll do it this time and see what I get. I'm more than happy to give Sundance a chance for all he's done for the community. If it sucks well then, I'll know better for the future.
저그 화이팅
cristo1122
Profile Blog Joined November 2010
Australia505 Posts
February 14 2012 06:26 GMT
#18
constructive post + good logic = epic conclusions

i will be taking option A as i agree with ur argument ^^
ZvP imbalanced blizzards solution nerf terran
drgonzhere
Profile Joined November 2010
United States447 Posts
February 14 2012 06:27 GMT
#19
real talk, thank you alex.
Dictator for Life of the PuMa Fanclub/ DRG, PuMA, Sage, Puzzle, MMA Fighting!
Balgrog
Profile Blog Joined March 2011
United States1221 Posts
February 14 2012 06:27 GMT
#20
Great post Alex! I do feel that the gold members are getting screwed hard, and that the price should be lowered, but I totally see why MLG has it has PPV. People should expect this to be a common thing for all high quality tournaments in the future. I imagine this tournament is costing MLG 75k+ with prize pool, staff, flying out and housing the players, venue, streaming, equipment and all of that.
The only way to attack structure is with chaos.
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