Will you subscribe to the next MLG Arena? - Page 7

On February 28 2012 00:26 Big_Pete1999 wrote:
Ok ok ok, as a senior in a top 10 Business school in the USA with a 4.0 (I'm trying hard for Summa Cum Laud) in Accounting, let me say that "making a profit" is needed for GROWTH, but making a profit isn't necessarily needed in order to sustain, unless by sustaining, your product gets stale, which in turn generates less revenue, which ultimately leads to a "loss" and then going under.

The thing is that SC2 isn't exactly a television company still not offering a widescreen, high definition TV, or a computer company refusing to put a decent product together. SC2 has a format and casters. If there isn't a live venue/audience, then besides a latency annoyance, there really isn't much reason to fly everyone into the MLG office, but hey, that's their call.

In my previous posts, I've used NFL as a model. I've gotten a bit of flack from it because it is USA's #1 sports league/revenue generating league/etc... Well, the NFL didn't start that way. NFL was a nothing league paying their players next to nothing, and their owners routinely lost money and had to sell teams or go bankrupt.

Let me tell you though, by NOT charging money for people to watch their product on television (in our case, SC2 steaming online), they started building their fan base. Once a fan base shows constant growth for years, and once that fan base gets so large that they actually start making an impact on other sports/activities because they would rather watch SC2 (or the NFL/AFL back in the 50's-60's), sponsors notice! Once sponsors notice, you better believe they will start throwing money at that sport/e-sport. Once money starts flowing, then growth can occur and a continuously better product is out on display.

This is the model for success. Not only in the USA, but other countries as well. History shows that the "league" shouldn't charge fans to watch their product via television or in our case, online streaming. Money is only paid by the fans to attend the event live. This is the fastest way to build a fan base. Again, once that fan base is large enough, sponsors will kick in the money to improve and more easily distribute that product.

Here in America, television networks pay the league for the "rights" to televise the sport. But where does that network get the money to pay for the rights? They get it from SPONSORS through commercials or other big conglomerates that they are a sister company to. When they get enough money from these sources, they can pay for more and more rights to broadcast the games that they know their fans want to watch. The more games they broadcast, the more people will tune into their station to watch, and the more the sponsors will pay them in return because they know that more and more eyes are watching their commercials/ads. Rinse and repeat. Before you know it, the sports league that DIDN'T charge its fans to watch is a multi million/billion dollar per year league.

I understand why MLG did this PPV, however, they missed their target because of faulty financial advise. Sometimes people let the short term fix destroy a long term solution. I HOPE MLG didn't just do this, because while they might have made some money in the short term because of this PPV event, they might have shot themselves in the foot long term because people might be apprehensive to even click on a link for MLG because the seed has just been planted in their head that they will have to pay in order to watch. Even if that event that people are apprehensive to click on is a free stream, the mere fact that in their head they said "I hope I don't have to pay for this" is a NEGATIVE impact on the fan and fan base. Negative impacts on a fan base is not part of the "recipe for success". You want to shield the negative while pumping the fans full of the positive. This event was mostly negative because fans thought something negative at least once. Whether they paid for it or not, they initially said "what? I need to pay? Ok, that's fair"... but still, they said "what? I need to pay?" before they paid. That was a negative, and negativity is a recipe for failure, not success and growth.

On February 28 2012 12:52 denzelz wrote:


First off, I don't see how your school ranking and your GPA matters in this discussion at all. Fact is, Arenas is likely going to be a one-time experiment to determine if a pay-wall model will work for SC2. It's very very difficult to compare something like SC2 to something like the NFL. For starters, the barrier to entry for a company who wants to broadcast SC2 is very low compared to someone trying to start a new professional league for football. As such, there's PLENTY of other organizations that offer free streams. This weekend, you saw the success of Assembly, and on an almost daily basis, the success of GOMTV, which also offers free content. I would contend that these sources are sufficient for promoting Starcraft. I know that I personally spend a good amount of time watching SC2 and I can't even exhaust all of the VODs by GOM, MLG, Assembly, NASL, and YouTube casters.

MLG tried to determine the valuation of esports with Arenas this weekend (or in Econ terms for you: WTB). I would say that the event had either a net positive or a neutral effect on the growth of Starcraft. Those who couldn't pay could still enjoy the other sources that are available EVERY SINGLE DAY. I really don't think anyone is going to associate MLG with a paywall from just this event.

Also, as an aside, please stop comparing SC2 to any other sporting broadcast/event. They depend on two very different fundamental business models and only appear similar on the surface.