Industry Voices—Sappington: Do TV and esports need each other?

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By late March, they’d already had enough. Only a few weeks into the COVID-19 pandemic, sports fans were flipping among channels, hoping to find something besides re-broadcasts of older games. TV executives were doing much the same, trying to find something that would sate viewer appetite for fresh sports competition.

Esports had made inroads into television over the past few years, particularly with ESPN, TBS, DisneyXD, and FOX. Yet, it was largely seen by the industry as fringe content for niche viewers. So, in late March, with few better options, esports was given a chance to shine…and viewers watched.

The eNASCAR iRacing Pro Invitational Series on Fox Sports 1 didn’t produce Super Bowl numbers by any stretch. It did draw 1.6 million unique viewers and an average of 903 million watching for almost 60 minutes (according to Nielsen), which is certainly respectable, particularly for cable TV on a Sunday afternoon. It also helped many in the television industry begin to see potential in esports as a type of content that could draw meaningful numbers.

Key stakeholders in both the TV and esports industries are now better able to envision the power of their combined strengths. Ultimately, television and esports need each other. Both are better together than they would be apart.

Why esports needs TV

This side of the equation is easy. As an industry, esports would love to play a larger role in the TV world, as would any type of emerging video content. Esports evolved within the gaming world and has only established initial ties into the television world over the past few years, at least in North America. A greater role in TV translates into more money, which helps everyone. However, TV provides esports with more than just direct revenues.

  • Advertisers. Esports relies on advertising and sponsorships for most of its revenues. An increasing number of big brands such as Levi’s, Nestlé, and Proctor & Gamble are allocating portions of their ad budgets to esports. Yet, esports advertising is a minnow compared to TV’s advertising whale. Television can bring new advertisers to esports who can then be drawn into esports streaming ads and sponsorship programs.
  • Stability. Along with driving advertising, television rights provide sports leagues with stability in revenues, allowing better planning for growth. Publishers, investors, teams, players, tournament organizers, and sponsors have greater confidence in the ongoing viability of their leagues, encouraging them to invest in their esport for the long term. Television relationships have contributed to the long-term stability and growth of sports leagues including professional football, basketball, and baseball. They would do the same for esports.
  • Continued maturity. Esports has evolved quickly over the past few years as viewership and engagement have grown. With investment from professional sports franchises and sports groups with expertise in traditional sports, esports has matured significantly. Leagues and teams have added levels of professionalism and infrastructure necessary to support its growth so far. However, for esports to take the next step, it needs the additional distribution and mass-market awareness that television can provide.

Why TV needs esports

Importantly, esports is not a fad. Online viewing of esports on platforms such as Twitch or Facebook has grown consistently over the past several years. Television viewership, though small, was growing prior to the pandemic. So, while the iRacing ratings in March were higher than expected by many, they were not a complete surprise. While esports can potentially tide networks over for a live entertainment fix in the short-term, there are long-term reasons why television may want to stay involved in esports.

  • Attract younger audiences. Broadcast TV, and cable TV in particular, desperately needs to capture the attention of the newest generation of viewers. Many of these viewers are turning to online sources rather than TV, including sources for gaming content. Esports viewers, who skew young, average 16 hours of live and on-demand viewing of game content per week, with almost seven of those hours being professional esports. Only 16% of esports viewers watch esports on TV, primarily because the majority of esports content is only available online. 
  • A place in the online world. Networks and pay TV providers continue to carve out their place in the new world of online video services. While many are launching their own OTT video services, they are competing with non-traditional alternatives like Twitch (owned by Amazon) or YouTube (owned by Google). These native online platforms understand the potential of esports and are working to lock in exclusive rights to top esports leagues. Having esports content available via broadcast and online will equip networks and pay TV providers to compete on more equal footing with online alternatives.
  • Evolution to an interactive environment. Television networks and pay TV providers have experimented with interactive content for many years. Some have used live voting or social media interaction to more deeply involve viewers in live content experiences. Esports viewers, accustomed to watching and interacting online, are often highly engaged. This type of live content can help television take interactivity to the next level.

A match between esports and television isn’t necessarily an easy one. Esports is still an emerging, evolving area. While promising, esports will continue to change over the next few, or several, years in terms of leading companies and teams. Television, while eager to play online and capture the young, cord-cutting generation, still has growing of its own to do to adapt to the new world of video and content. However, the best partnerships are those where both sides bring something uniquely valuable to the relationship. Esports and television can genuinely help each other, and that’s always a good start.

Interested in more data on this subject, as well as more research and consumer insights on the broader streaming television industry? Please register for our virtual StreamTV Summer Research Summit on 6/29-6/30 here, where a collection of top industry analysts will be releasing a treasure trove of exclusive data and forecasts across a wide variety of leading trends in OTT. It's a one of a kind event you won't want to miss. We hope to see you there.

As vice president, Brett Sappington leads Interpret’s video and esports entertainment research practice. With more than 20 years of experience in cloud technologies, he has spent more than a decade as a senior analyst in video and digital entertainment. Brett is a recognized thought leader in OTT and pay TV market trends and consumer insights and works with leading content producers, service providers, technology innovators and device makers around the world. Brett can be reached at [email protected].

Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceVideo staff. They do not represent the opinions of FierceVideo.

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