While a boom in media rights for eSports was expected, the coronavirus outbreak may see the value of these rights jump significantly, the analyst said.
Following the cancellation of sporting events around the globe in light of the Coronavirus outbreak, the online population has risen sharply, bringing more viewers to esports competitions, according to GlobalData. As a result, esports media rights could see a significant surge.
Gen.G claims to have seen an 18% increase in the audience for its PlayerUnknown’s Battlegrounds (PUBG) and League of Legends teams on Chinese streaming platforms DouYu and Huya between January and March 2020.
Due to Covid-19, revenue from sales of tickets and merchandise will drop significantly, while in-app purchases on streaming platforms will go up.
The result is that even though organisers will see their ad revenues fall significantly, streaming platforms stand to benefit, said GlobalData. It noted that streaming platforms Twitch, with a 73% share of total viewing hours in 2019, and YouTube, with 21%, are seeing viewing numbers increase due to the global lockdown.
According to GlobalData’s Sportcal Intelligence Centre, Intel is spending over $10m annually to sponsor the Overwatch League and Nike is spending $8m a year to supply kit to the teams competing in the League of Legends Pro League. This may insulate these brands from the turmoil currently facing the wider sports market through their partnerships with a widely digital medium.
Commenting on the report, Rupantar Guha, Senior Analyst of Thematic Research at GlobalData, said: “With the industry’s shift to online formats, brands are expected to allocate spending on both online and out-of-home ads, with the former being the primary channel because of its greater security in times of uncertainty. Out-of-home ad spends will decrease in 2020. Streaming platforms stand to benefit from this, while organizers will see their ad revenues fall significantly. As a result, the value of media rights that streaming platforms buy from organisers could potentially surge in the coming years, pushing streaming platforms to look for long-term, exclusive deals.”
