Esports media rights could surge due to coronavirus, says GlobalData
The coronavirus (COVID-19) outbreak has had a significant impact on esports, one of the fastest-growing areas of the gaming sector. Dozens of esports tournaments have been cancelled, with many more postponed indefinitely, and events scheduled to be held in stadiums are being moved online to mitigate the spread of the disease, says GlobalData, a leading data and analytics company.
Rupantar Guha, Senior Analyst of Thematic Research at GlobalData, comments: “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 spend 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 organizers could potentially surge in the coming years, pushing streaming platforms to look for long-term, exclusive deals.”
With many cities and countries now under lockdown, the online population has risen sharply, bringing more viewers to esports competitions. 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.
Guha concludes: “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. Having acquired the exclusive streaming rights to the Call of Duty League, which is being organized online, YouTube’s market share is expected grow in 2020.
“Meanwhile, Twitch could take this opportunity to add more mobile esports content. This will allow it to attract mobile esports leagues, the majority of which are currently available on YouTube.”