On February 14 2012 19:10 Vanimar wrote:On February 14 2012 15:07 ottersareneat wrote:
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).
There's something I don't quite get (actually at this point don't agree upon, but maybe just lack the insight), so I will just ask and hope for an answer.
Q: Why does the Industry need to become less reliant on third-party, outsider revenue (like corporate sponsors)?
The way I see it, any sport utterly depends on those. Even if you take a soccer club with 80000 seats in their stadium and 20$ (dollar just chosen as example currency for sake of the argument and calculation purposes) per ticket, that's 1,6 Million $ per home game (which is 50% of games, reducing the income to 800k per game). This is an optimistic approach, for in this scenario every game is sold out and every seat is worth 20$. For a stadium with 80k seats however you have to be a top notch team, so player expenses far exceed those 800k per game. This is just the players, adding travel, Hotels, coaches, cooks and whatnot, soccer could never survive without MASSIVE sponsoring.
As I perceive the situation (again, correct me in case I am terribly wrong) there are two ways to handle the situation:
A) Take money for events, This will limit your viewers in any scenario, because even if everybody watching E-Sports right now would agree to pay the 10$ you deem appropriate, new people would not. Yes the events would probably grow, while price pools would increase and income for teams would increase. As this happened I imagine salaries for players would also skyrocket. Meaning expenses would rise as well while travel costs would not be a problem anymore, for those, of yourse, would stay the same. Making it possible for Players to attend more events around the world.
The danger I see in this is simply, that over time, viewers will stop watching (peoples interests change) while not many new people come to watch.
And if you argue that "well player streams and some events are still free", then events charging money would benefit from smaller events which build the community paying events can live of. This might be a realistic, but in no way fair, scenario.
B) Make everything free of charge and live off of sponsoring. I have no idea how hard it is to get sponsoring these days, but I imagine it's not easy. And this is actually a good thing, for it might facilitate competition among events. Maybe do some fun 4v4 pro games, play against viewers etc to keep people entertained. Think of new ways to sell the product, rather then just charge money for the same.
This scenario actually has the heavy possibility of increasing the number of total E-Sport viewers, as everybody likes fun stuff, it's fun right? This would make the scene as a total grow, increasing the number of regular viewers and thus making it interesting for advertisement.
I liked for example what you did with the "gracken" theme (although due to his latest showmatch I'hm rather inclined to it). I tink generating new ideas and fun stuff, interactive and not, will raise viewers and therefore increase sponsoring.
Yes, increasing the direct-to-consumer revenue is great, and having your players live in a team house should make specials kind of easy. I kind of miss events of that kind, where teams just set up a stream and do stuff (for instance "win a mouse from our sponsor for showing us some amazing strat/ beat our team in 4v4.. etc etc).
While I do want E-Sports to grow and am willing to buy my gaming gear exklusively from the sponsors of my favourite team /LAN I enjoyed and such, I am not willing to pay for a stream, for I feel it limits the amount of people watching, reduces the amount of new /entertaining ideas events bring to get more viewers, and ultimatively decreases the amount of people watching E-Sports, thus hurting it. If there is one thing I have gathered from most internet phenomena like Athene and such, it's that what it all comes down to is the amount of people watching. I feel any PPV model is a fast way to get more money into one's own pocket while decreasing the money going into the sport. This, of course, is a business model many businesses use, yes it ultimatively hurts everybody, doesn't it?
Vanimar (concerned Starcraft fan)
EPT
