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Volume 21 No. 31
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Managing e-xpectations

Demographic, not ratings, drives e-sports rush

Not even the biggest e-sports proponents believe that their games will bring big TV audiences, at least not this year.

But the fact that e-sports are supported by the same young male audiences that have been so elusive to TV executives has caused media companies to take a leap of faith.

The networks’ executives who have taken the lead on getting into the new space are doing their best to manage expectations about audience size. Turner Sports is guaranteeing advertisers just a 0.3 rating for the launch of its e-sports league on TBS this May — a rating that’s comparable to some of the smallest midweek college basketball audiences on cable, which most likely would mean less than 500,000 viewers.

These estimates come after the “Heroes of the Dorm” e-sports competition that ESPN2 carried in prime time last spring drew less than 100,000 viewers, an anemic audience for the network.

The lack of TV viewers, though, has not stopped media companies and advertisers from rushing headfirst into e-sports, which has become the hottest property in sports TV this year. ESPN, Fox Sports and Turner Sports already have e-sports competitions scheduled for this spring, and CBS and NBC both are monitoring the space.

The reasons for TV network interest are simple. Advertisers are falling over each other to reach e-sports’ young audience that is largely not watching television.

“This is not about doing a 10 rating,” said Turner Broadcasting System President David Levy. “But I bet our audience is highly concentrated in young males, 18 to 24 and 18 to 34 years old.”

Here’s the catch: E-sports wants networks to reconsider the concept of exclusive rights. E-sports games grew up online, and game publishers and tournament organizers are not inclined to give up streaming to get on television.

David Rosenberg, GMR Marketing chief strategic officer, pointed to exclusivity as a significant roadblock for television networks. He advises networks to think differently about e-sports. Even if TV networks share rights with a streaming platform, like Twitch for example, they still will be able to reach the coveted millennial males who typically aren’t watching television.

GMR counts NBC Sports parent Comcast as one of its clients.

“The target is an over-the-top consumer anyway,” Rosenberg said. “The consumer everyone is targeting is the same one who gets their content anywhere they can. It’s going to come down to where am I going to get the best experience as a viewer.”

Currently, there’s no agreement among TV network executives on the best way to move forward with exclusivity. Turner, for example, believes an association with a streaming company like Twitch adds a level of authenticity to its offering that old-school television executives don’t have.

Turner will not discuss Eleague’s startup costs, other than pointing out that it is creating a league, not just a TV show, from scratch. Revenue will come from advertising, sponsorship and events.

“You don’t want to have big media companies come in and take over something that is actually working,” Levy said. “What you want to do is give it more framework and more exposure. You want to make sure that you do it in an authentic way. This has to stay a digital product.”

ESPN and Fox, on the other hand, have demanded exclusivity on their e-sports offerings.

ESPN, which will carry the “Heroes of the Dorm” event again this spring, will show the semis and finals on ESPN2 exclusively. Earlier rounds will appear on both ESPN3 and Twitch.

“We’re balancing both ends of that,” said John Lasker, ESPN’s vice president of programming. “In order to get a true understanding of e-sports on television, there’s some level of exclusivity that has to apply.”

Similarly, Fox Sports’ FIFA deal (see related story) gives the media company exclusive rights to the championship round of the FIFA Interactive World Cup 2016, which FS1 will carry live from New York’s Apollo Theater next week. Fox will control all linear and TV rights to the event’s final round. Twitch and YouTube will carry the earlier rounds.

“I don’t think the viewing audience will be astronomically high,” said Bill Wanger, Fox Sports’ executive vice president of programming research and content. “But I think we’ll have a really strong concentration of young men.”

Likewise, CBS and NBC have been averse to sharing their rights on any of their program deals. But some industry watchers say that mindset needs to change with e-sports.

“Exclusivity has always been a key premise in virtually all these deals, and if in the eyes of e-sports decision-makers, whoever they may be — the publishers, the e-sports companies, the athletes — if they have trouble with the concept of exclusivity, then you’re right, there is going to be this clash of clans,” said Tom Richardson, a former vice president of AOL Sports and founder of Convergence Sports & Media.

And for the networks, the question still is how many viewers can it bring in to taste that experience.

“We have not looked at it all that seriously, but we are monitoring it,” CBS Sports Chairman Sean McManus said. “Even though the amount of gamers has exploded in this country, it still remains to be seen how much interest there will be in watching that on television.”