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Esports: why TV entertainment ventures and other media groups are investing

GAMES/SPORTS/TV: It must be official: the audio-visual entertainment business, from linear-TV broadcasters to live streaming platforms, has fallen in love with competitive esports as a new source of original content.

From Brazil via China to the US and United Kingdom, esports (competitive video gaming) could be coming to a TV channel near you.

As a sporting activity, it started just over a decade ago as an organised pastime among video gamers happy to watch their peers compete against each other on the Internet. It is now being marketed as a professional sport thanks to the accelerating demand for large-scale, stadium-based versions.

Analysts like Amsterdam-headquartered Newzoo predict esports will generate US$1bn-plus by 2019.

Its growing audience comprises a global community of fanatical young (still mostly male) fans who watch all things gaming on dedicated streaming platforms like Twitch and Azubu.

But as it develops compelling narratives among its own trade organisations and leagues while inspiring teams and celebrity players to compete for millions of dollars in cash prizes, esports is winning over followers among ordinary consumers as well. That could make it TV-friendly.

TV networks (via terrestrial, satellite, cable, IPTV, streaming signals) are beamed into an estimated 1.6 billion homes worldwide. However, marketers and media owners know the number of traditional-TV viewers among Millennials and Generation Z consumers (35 years old and younger) is declining.

Esports on TV just might spread the word and win over this hard-to-please demographic. And as long as TV remains the most influential media platform for entertaining people, brand owners will pay to be a part of the esports content.

The year 2016 saw the first serious but limited TV coverage of esports. It is expected to grow in 2017 as the number of media corporations with interests in TV and other audio-visual entertainment cement their commitment with hard cash.

Whether esports’ media rights and entertainment formats will be structured and promoted the same way as the traditional marketing of football, rugby, tennis and other sports on TV remains to be seen.

Below is a round-up of international media companies, from movie studios, broadcasters and TV producers to digital conglomerates, delving into the world of competitive esports. From e-commerce giant to Google’s YouTube and the broadcast divisions of Time Warner, Vivendi and The Walt Disney Company, TV is getting closer to esports.

Alibaba Sports Group HQ: China Ownership status: NYSE **Parent company Alibaba Group Holding owns Alibaba Pictures Group (Chinese movie studio and Hollywood investor), Youku Tudou (China’s answer to YouTube), and the US$1.5bn entertainment investment fund Alibaba Digital Media and Entertainment Group Esports interest: It joined forces with Singapore-based e-commerce, social media and gaming company YuuZoo Corporation in March 2016 to launch a China-focused esports tournament (World Electronic Sports Games); its first series of competitions offers a total cash prize of US$5.5m, which is said to be world’s highest so far.

Activision Blizzard HQ: US Ownership status: NASDAQ ** It took on Hollywood in 2015 by unveiling its own TV and movie production house Activision Blizzard Studios to develop content based on its games brands Esports interest: The games publishing giant famous for the Call of Duty, World of Warcraft and the new Overwatch franchises set up Activision Blizzard Media Networks, an in-house esports division, in 2015; in January 2016, it bought Major League Gaming (MLG), the US-based esports online broadcaster and event organiser, for a reported US$46m to build the “ESPN of esports”; it has created a new professional esports league centred on Overwatch, the first-person shooter game. HQ: US Ownership status: NASDAQ ** One of the biggest investors in TV content and movies, and owner of Amazon Prime Video, the international streaming TV platform Esports interest: Amazon triggered the current esports fever among media owners when it acquired Twitch, still the biggest live-streaming esports platform, for US$970m in August 2014. Since then, it has built its own games-development division called Amazon Games Studio; introduced a loyalty programme called Twitch Prime that offers members special discounts on games; co-created a new league called Esports Championship Series with gaming platform FACEIT; launched its first esports tournament, Champions of Fire Invitation, which came with US$100,000 in total cash prizes and had highlights on CBS Sports Network and YouTube; bought US start-up Curse Inc., a gaming and esports-content creator, for an undisclosed sum; and after acquiring games developer Double Helix in 2014, it released Breakaway, the first top-tier multiplayer game from Amazon Games Studio, in December 2016.

beActive Entertainment HQ: Portugal Ownership status: independent producer **Pioneering and award-winning international multi-platform transmedia content production house Esports interest: Last summer, it completed the production of The Players, which is described as the first ever scripted TV series set in the esports world; it is co-funded by RTP, the Portuguese public service broadcaster.

Endemol Shine Group HQ: Netherlands Ownership status: 21st Century Fox and Apollo Global Management joint venture **The highly prolific international TV production conglomerate Esports interest: The UK and US divisions of Endemol Beyond, Endemol Shine’s digital-content studio, have produced Legends of Gaming, an online reality esports-competition show; the series has been transmitted globally on Endemol’s online gaming channel Smasher Network; experts believe this could be the testing ground before Endemol Shine tries to find a broadcaster for the series.

ESPN HQ: US Ownership status: a subsidiary **The world’s most famous sports TV channel is part of The Walt Disney Company empire, which operates mammoth interests in TV, movies and digital entertainment Esports interest: the US-originated international TV network had already tapped into the youth audience with its coverage of extreme sports (via its X Games events) and mixed martial arts; it hopes its commitment to esports will also help revive the dwindling number of viewers; in January 2016, it launched its esports website; the ESPN 2 channel has transmitted esports contests among US colleges; esports competitions are held during the X Games, with highlights broadcast during coverage of the X Games on ESPN and another Disney-owned TV network ABC.

Fetch TV HQ: Australia Ownership status: a subsidiary **A division of the South East Asian media-and-entertainment conglomerate Astro Malaysia Holdings Esports interest: The Australian version of eGG Network, the round-the-clock esports channel originating from Malaysia, launched in December 2016 in Australia on the pay-TV platform Fetch TV.

ITV plc HQ: UK Ownership status: London Stock Exchange **The UK’s largest commercial linear-TV public service broadcaster Esports interest: It hooked up with its satellite-delivered rival Sky to invest an equal amount in GINX Esports TV, the London-headquartered international streaming esports channel transmitted to 23 million UK and Irish TV homes, and to 37 million households globally.

Lionsgate HQ: US Ownership status: New York Stock Exchange **It acquired a 50%-plus stake in Pilgrim Studios, the in-demand US-based independent production company, for a reported US$200m in 2015 Esports interest: Lionsgate, Pilgrim Studios and Germany-based esports tournament organiser ESL (Electronic Sports League) formed a partnership in 2016 to produce and sell esports content to TV and digital platforms; the first project from this agreement is a reality esports-competition series based on Halo 5: Guardians, the Microsoft Studios/343 Industries first-person shooter game.

Mediapro Group HQ: Spain Ownership status: a subsidiary **It is part of Imagina Group, an international production/distribution powerhouse (movies, TV, advertising, digital content, sports events) partly owned by WPP Group, the world’s biggest advertising conglomerate Esports interest: Mediapro acquired a majority stake in Fandroid Entertainment, the company behind LVP (Liga De Videojuegos Profesional), Spain’s largest esports league, in October 2016; as Spain’s biggest sports-rights management firm, Mediapro will be able to bring its TV-broadcast expertise to LVP’s esports events.

MTG (Modern Times Group) HQ: Sweden Ownership status: NASDAQ Stockholm **The Nordic region’s biggest international free-to-air and pay-TV broadcaster, as well as an investor in streaming TV platforms and online multi-platform channels Esports interest: After, MTG must be among the boldest media investors in esports; in 2015, it snapped up a majority stake in Germany-based Turtle Entertainment, the international esports giant that operates the popular ESL tournaments; it also fully owns Sweden-originated DreamHack, Scandinavia’s leading esports events organiser.

Sky plc HQ: UK Ownership status: London Stock Exchange **Europe’s largest satellite TV conglomerate, majority owned by News Corporation. Esports interest: See ITV plc entry above

SporTV HQ: Brazil Ownership status: a subsidiary **Cable, satellite and IPTV-delivered network belonging to Latin American media conglomerate Grupo Globo Esports interest: The pay-TV network transmitted the final for the Brazilian League of Legends tournament to 1.4 million subscribers last summer, compared to the 700,000 who watched online; it was the first time the event had been transmitted live on TV and confirmed there might be space on traditional TV for esports entertainment.

Turner Broadcasting System (TBS) HQ: US Ownership status: a subsidiary **Part of the Time Warner empire that includes TV networks CNN, Cartoon Network and TBS among its divisions Esports interest: Turner Sports, which handles sports rights for the TBS networks, linked up with WME/IMG, the behemoth entertainment talent agency, to form Eleague, a tournament dedicated to Counter Strike: Global Offensive (CS:GO) competitions; the contests take place at the Turner Studios in the US city of Atlanta and are broadcast live on Friday nights; last year, Eleague partnered with FACEIT to produce the Overwatch Open tournament based on Activision Blizzard’s newest multiplayer blockbuster, the final of which was also broadcast on TBS; the partnership’s most ambitious broadcast project is the Eleague Major 2017, which will air on TBS late January for eight consecutive days as participants compete for a US$1m cash prize pool.

Vivendi HQ: France Ownership status: Euronext **Owns Canal+ Group, France’s largest pay-TV and film studio owner, and Universal Music Group, the world’s biggest recorded-music company; has significant stakes in YouTube rival Dailymotion; Canal+ Group has major interests in several international TV production firms like the Banijay Group, Tandem, Bambu Producciones and RED Production Company Esports interest: Vivendi used to own the venture that became video-games behemoth Activision Blizzard; it has a controlling stake in Paris-based stock exchange-listed games developers Ubisoft Entertainment and Gameloft; its TV and film division Canal+ has formed a strategic partnership with ESL to develop France’s first professional esports league; Vivendi is expected to use its resources in TV, the music industry and live entertainment (it owns the legendary Paris venue Olympia) to promote the esports tournaments; Canal+ and Dailymotion are sponsors of French esports squad Team Vitality; Canal+, which is known for covering major traditional sports in France, has started airing Canal Esport Club, a TV series devoted to competitive gaming; it recently commissioned and co-produced Game Fever, the €1.2m (US$1.3m) documentary on esports made by renowned director Hervé Martin-Delpierre.

Warner Bros. Entertainment Inc. HQ: US Ownership status: a subsidiary **Like Turner Broadcasting System (above), the legendary Hollywood studio Warner Bros. is a subsidiary of Time Warner Esports interest: It owns 50% of The CW, the US-based TV network that joined forces with another Warner Bros. subsidiary, the games-focused online multi-channel network Machinima, to bring documentaries about esports to primetime TV.

Yahoo HQ: US Ownership status: NASDAQ **The financially beleaguered tech conglomerate, which pioneered the use of search engines and web portals in the 1990s, also offers TV and movie videos on online channels to its 1 billion active monthly users Esports interest: Yahoo Esports, a website dedicated to covering esports news and all things related, was unveiled in March 2016; it took matters to a new level in August 2016 by forming a joint venture with ESL to develop new tournaments and original content to broadcast on the website.

YouTube HQ: US Ownership status: a subsidiary **The Google-owned video-sharing giant has more than 1 billion registered users and works with in excess of 8,000 different creative partners, including movie studios, TV broadcasters and digital content producers Esports interest: It launched YouTube Gaming in August 2015 to offer an alternative live esports platform to Amazon’s Twitch; it was already known for creating YouTube stars among popular gamers like PewDiePie with his 52 million-plus YouTube subscribers; it was the start-up base for the now established multi-platform gaming channels like Machinima with its 12.7 million YouTube subscribers.

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