Amazon + Ticketing + eSports = Opportunity

AMAZON + TICKETING + ESPORTS = OPPORTUNITY

Amazon + Ticketing + eSports = The Opportunity (Photo: Benjamin Faust)

Amazon + Ticketing + eSports = The Opportunity (Photo: Benjamin Faust)

Amazon + Ticketing + eSports = The Opportunity (Photo: Twitter)

Amazon + Ticketing + eSports = The Opportunity (Photo: Twitter)

There's definitely a huge opportunity in taking on Ticketmaster alone, which generated $1.6B in revenue in 2016 per BTIG's estimates.

But let's look at how Amazon can turn this into an eSports opportunity.

 

WHO WOULD THEY BUY?

The Ticket Fairy's Investor List (Photo: Crunchbase)

The Ticket Fairy's Investor List (Photo: Crunchbase)

There are plenty of ticketing startups that Amazon could look at. After I sent that tweet, a former MLG colleague of mine alerted me to the The Ticket Fairy.

Just Twitch COO Kevin Lin, Justin Kan and Emmett shear - the co-founders of Twitch - and Y Combinator, which invested in Twitch and gave the incubator a massive return.

This isn't a guarantee that Amazon/Twitch will choose The Ticket Fairy but the investor list overlap is pretty amazing.

 

WHAT COULD THEY DO?

TwitchCon 2016 (Photo: Twitch)

TwitchCon 2016 (Photo: Twitch)

TWITCHCON

TwitchCon is the easy first option, the massive event that Twitch has held for the past few years celebrating their influencers, fans and platform.

 

TWITCH PRIME

Amazon's Twitch Prime Move Is Genius (Photo: Twitch)

Amazon's Twitch Prime Move Is Genius (Photo: Twitch)

Now let's go deeper and what I consider one of the most brilliant moves that Amazon has done with Twitch:  Twitch Prime

Remember, Twitch Prime is all about driving Amazon Prime memberships overall, as the latter automatically gives you access to the former and increased value to the Prime platform - I don't even want to know how much I've spent using Amazon Prime Now with 2-hour delivery in NYC.

 

EVENTS

In March, Twitch announced that streamers would get a cut of any game sold through their channel. 

Now imagine this scenario.

Any developer based event that Twitch drives the ticketing platform can be further deeply integrated with both Twitch Prime and Game Sales. 

It can go even deeper than that.

What if you got an Exclusive item via Twitch for attending that event that Amazon just sold you a ticket for?

Overwatch Loot Box Via Twitch Prime (Photo: Twitch)

Overwatch Loot Box Via Twitch Prime (Photo: Twitch)

 

EVENT PLATFORM

Matcherino's Events (Photo: Matcherino)

Matcherino's Events (Photo: Matcherino)

Last month, I analyzed Matcherino's $1.5M round and how that platform helps event organizers crowdfund prize pools and help distribute the winnings.

How does Matcherino work?

Matcherino With Twitch Login (Photo: Matcherino)

Matcherino With Twitch Login (Photo: Matcherino)

Oh you just use your Twitch login and connect your PayPal account.

See it now.

 

THE ESPORTS TICKETING OPPORTUNITY

Amazon's potential move into ticketing is them disrupting another industry - when will the first Amazon health care facility open?

What's the accretive value to Amazon overall to get into ticketing? Ill let the Wall Street analysts do the math on that one.

 

But there's a huge play between Amazon, Twitch, eSports and ticketing.

eSports Week In Review | Franchising: Riot vs. Activision, Disney's eSports Opportunity, Versus Sports Acquires TTG eSports

ESPORTS WEEK IN REVIEW | FRANCHISING: RIOT VS. ACTIVISION, DISNEY'S ESPORTS OPPORTUNITY, VERSUS SPORTS ACQUIRES TTG ESPORTS, 7 TOTAL MADDEN ATHLETES

The International 2016 Finals. TI 2017 Prize Pool Is $24M (Photo: Valve)

The International 2016 Finals. TI 2017 Prize Pool Is $24M (Photo: Valve)

Overwatch League Twitter Poll (Photo: Twitter)

Overwatch League Twitter Poll (Photo: Twitter)

Franchising: Riot Games vs. Activision Blizzard (Graphic: The Next Level)

Franchising: Riot Games vs. Activision Blizzard (Graphic: The Next Level)

TNL Infographic 053: Franchising: Riot Games vs. Activision Blizzard (Infographic: Jordan Fragen)

TNL Infographic 053: Franchising: Riot Games vs. Activision Blizzard (Infographic: Jordan Fragen)

Disney's eSports Opportunity: 1 Year Later (Photo: Time)

Disney's eSports Opportunity: 1 Year Later (Photo: Time)

 

WEDNESDAY 08/09

The Next Level was off

 

THURSDAY 08/10

Versus Sports Acquires TTG eSports, Signs 2 More Madden Athletes For 7 Total

Sports Business Journal (Photo: SBJ)

Sports Business Journal (Photo: SBJ)

Versus Sports (Graphic: Jordan Fragen)

Versus Sports (Graphic: Jordan Fragen)

 

HAVE A GREAT WEEKEND!

Disney's eSports Opportunity: 1 Year Later

DISNEY'S ESPORTS OPPORTUNITY: 1 YEAR LATER

Disney's eSports Opportunity: 1 Year Later (Photo: Time)

Disney's eSports Opportunity: 1 Year Later (Photo: Time)

TNL Take: Yesterday alone, there was an eSports news flurry:

And we end the day with this tiny news.

August 8, 2017: Variety: ob Iger: Disney Sets ‘Extremely Important Strategic Shift’ With Movie, ESPN Streaming Launches

August 30, 2016: The Next Level: Sports Media Evolution: Disney's Opportunity

Almost 1 year ago I looked at the various opportunities that Disney had across their wide media and distribution network.

Here is last year's article unedited now updated with what Disney has done within eSports across 8 different areas:

 

 /01 ESPN ESPORTS

ESPN eSports (Photo: ESPN)

ESPN eSports (Photo: ESPN)

When it comes to Disney and eSports we have to naturally start with ESPN.  When ESPN and eSports gets mentioned it's usually with two quotes:

ESPN President John Skipper said in 2014 after Amazon bought Twitch for $1B what he thought of eSports:

“It’s not a sport — it’s a competition. Chess is a competition. Checkers is a competition. Mostly, I’m interested in doing real sports.”

ESPN host Colin Cowherd said in 2015 that "he would retire if was forced to cover eSports":

Both of those sound anachronistic in less than two years but the truth is ESPN has changed their messaging - and so has Colin Cowherd.

Since 2014, ESPN has aired 300+ hours of eSports programming and dedicated a whole Sunday in July airing 18 hours across ESPN2 and ESPNU.

ESPN has also run three eSports programs this year and compared against E LEAGUE has performed fairly well; with EA Madden even beating E LEAGUE's Finals in the 18-49 Demo - usual qualifying statement on what analysis of early data means.

ESPN2 vs. E LEAGUE (Infographic: The Next Level)

ESPN2 vs. E LEAGUE (Infographic: The Next Level)

That’s only on the TV side.

ESPN has also done a good job on the content side with ESPN eSports and I’d even put them ahead of Turner’s Bleacher Report.

However with Yahoo eSports recent deal with ESL, which will bring actual live content, exclusive tournaments and new integrated Brand opportunities to Verizon’s properties; ESPN eSports is behind…for now.

 

1 YEAR LATER

What's ESPN eSports done?

We know what happened with Yahoo eSports.

ESPN eSports has been the leader in reporting and especially breaking news. Definitely an uptick in amount of content as well.

Here's where it gets really interesting.

Last year, they had 3 eSports events on ESPN2. The total is now 16 to date across ESPN's flagship channel, ESPN2, ESPNU, ESPN Deportes and DisneyXD  - with a huge new Sunday programming slate.

✔️

TNL Infographic 054: eSports On ESPN Networks and DisneyXD (Infographic: The Next Level)

TNL Infographic 054: eSports On ESPN Networks and DisneyXD (Infographic: The Next Level)

 

/02 VICE

Vice Gaming (Photo: Vice)

Vice Gaming (Photo: Vice)

I’m a huge fan of Vice.

Sure I miss some of their edgier magazine content but I’m still amazed at how these guys are worth $5B after watching them party across from my Brooklyn apartment in 2002.

Vice has clearly grown up but there still isn’t one content company which nails youth programming like these guys.

That’s why I’ve said repeatedly that someone is going to create the Vice for eSports – and it may even be Vice themselves after hiring Giant Bomb Editor Austin Walker.

Vice launched their Gaming vertical over a year ago and I was shocked at how much eSports content they covered. They’ve also naturally made one of the better eSports documentaries:

When Vice's new Gaming vertical launches, I'd expect even more eSports content. 

Disney's relationship is their $400M investment in Vice.

Disney, just go ahead and buy Vice.

 

1 YEAR LATER

What's Vice done?

Just launch a dedicated Gaming/eSports website and content called Waypoint.

Waypoint: Vice's Gaming and eSports Site (Photo: Vice)

Waypoint: Vice's Gaming and eSports Site (Photo: Vice)

Oh that last line about "Disney just go ahead and buy Vice".

Vice Valued At $5.7B (Photo: Hollywood Reporter/Getty/Bobby Bank)

Vice Valued At $5.7B (Photo: Hollywood Reporter/Getty/Bobby Bank)

$SNAP Snapping (Photo: Google Finance)

$SNAP Snapping (Photo: Google Finance)

Dear Bob Iger, as a world leader in content, Vice is the world leader in millennial focused content. You're launching an OTT network, Vice is perfect for digital. 

Assuming current valuation, Vice for 1/3 of Snapchat? That's an easy decision.

✔️

 

/03 BAMTech

MLBAM (Photo: MLB)

MLBAM (Photo: MLB)

Amazon has Twitch.

Activision-Blizzard has MLG.

Turner has NBATV.

Microsoft has Beam.

Owning both distribution and content is the quest everyone is after.

Now Disney has the same with their recent $1B investment into BAMTech, a tech company spun off from MLB Advanced Media - also huge kudos to the platform they've built.

Disney will use this BAMtech to create a standalone, cable-free digital streaming service without current linear ESPN content.

Now what type of content grew up on and is perfectly suited for this new platform?

 

1 YEAR LATER

What's BAMTech done?

An Exclusive $300M deal with Riot Games for League of Legends.

Disney now also has majority ownership of BAMTech, which will be the core driver for the future OTT/Digital platform.

✔️

 

/04 Disney Kids

Disney XD (Photo: Disney)

Disney XD (Photo: Disney)

I've spoken about my son's obsession with Minecraft and where Gaming and eSports will play a greater role in our education system.

There's a ripe opportunity to produce content at this early age. That may sound crazy but Disney actually did it already.

Twice.

Disney XD teamed with Nintendo last year to produce Clash of Karts: Mario Kart 8, one-hour show that put four teams of kids coached by YouTube influencers in a Mario Kart tournament.

YouTube influencers and kids....

Previously, Disney XD aired a one-hour special based on the Nintendo World Championships 2015, based of the earliest eSports events - when it wasn't even called eSports - back in 1990.

Nintendo, absolutely bring Nintendo World Championships back bigger.

 

1 YEAR LATER

What's DisneyXD done?

Launch a Sunday Gaming/eSports programming slate starting with the 2017 EVO Finals featuring Street Fighter.

The Next Level is working on something special on DisneyXD and will dive deeper into that.

You can also hear ESL North American CEO, Craig Levine talk about the partnership on The Next Level eSports Guest Podcast

✔️

 

/05 DISNEY PARKS

Disney's Upcoming Star Wars Theme Park (Photo: Disney)

Disney's Upcoming Star Wars Theme Park (Photo: Disney)

There have already been many eSports events in both California and Orlando, with Activision's huge Call of Duty XP event happening this weekend. 

Disney launched a program called Early Magic which lets guests into the Parks earlier with breakfast and other goodies. 

Just replicate the same type of thing for eSports.

 

1 YEAR LATER

What's Disney Parks done?

Considering holding eSports events at their 8,000 seat venue.

There's also a massive opportunity with EA's next Star Wars title.

✔️

 

/06 CHINA

Disney Shanghai (Photo: Disney)

Disney Shanghai (Photo: Disney)

Out of all the potential upside, this maybe the most difficult.

I've had an unabashed love of China and eSports over the past year and believe there's a huge market there.

While there's Disney Shanghai I'm not sure if they have deeper Chinese investment.

And there's that thing of China's richest man saying "I'll see your $5B bet and raise you another $5B".

 

1 YEAR LATER

What's Disney done in China?

As I mentioned, this would be the hardest one. The Next Level will also have some special news on China tomorrow.

 

/07 DISNEY GAMING

It's a shame that Disney shut down their Gaming division earlier this year. I felt that the Disney Infinity hardware/software bundle that Activision's Skylanders pulled off was a good product.

There's an obvious eSports connection here if Disney still had their old studio. I won't go deeper into why they shuttered that division as Jess Conduit already did a great overview

 

1 YEAR LATER

What's Disney Gaming done?

While not specific to Disney Gaming, Disney launched an accelerator program that includes axiomatic and Epic Games, publisher of Lawbreakers and one of the first to integrate with Discord.

✔️

 

/08 LUCASFILM AND MARVEL

Marvel and Lucasfilm (Photo: WDParkhoppers)

Marvel and Lucasfilm (Photo: WDParkhoppers)

Disney's purchase of both Marvel and Lucasfilm for a combined $8B is going to go down as one of the smartest bets on content ever.

Spotify is valued at $8B - which would you rather have?

Disney has the license to two solid eSports titles: EA's Stars Wars Battlefront and Marvel's Contest of Champions Mobile game.

Again the notion of calling something "eSports" is still debatable but in this case it's pure revenue sourced from internal sources or licenses.

 

1 YEAR LATER

What's Disney done with Lucasfilm and Marvel?

Take back the content from Netflix of which will definitely be included in the OTT/Digital service.  While nothing specific on the eSports side, the potential for both titles and content is endless.

✔️

 

CONTENT IS KING

I can't stop focusing on the whole idea of IP, Brand and Content. Not only from a Media perspective but from just a personal/business perspective as well.

Everyone today is - or should be - a Media Brand.

While Disney has a lot of core assets where eSports can provide accretive value, it's missing one huge piece:

Content.

There was that ridiculous previous rumor of Disney spending $500M to license Riot's League of Legends. - which I think is crazy.

Anyone want to buy some Olympics TV content?

While that price tag is high, Ill go ahead and say this:

Disney is going to make a large eSports content deal in the next 6 months.

 

1 YEAR LATER

So what's Disney done?

They signed the $300M BAMTech deal 4 months after the article. Content continues to remain king. Now Disney adds their own distribution. Increase and investment in 7 out of 8 is pretty good.

 

Well done Disney and ESPN team. 

Franchising: Riot Games vs. Activision Blizzard

FRANCHISING: RIOT GAMES VS. ACTIVISION-BLIZZARD

Franchising: Riot Games vs. Activision Blizzard (Graphic: The Next Level)

Franchising: Riot Games vs. Activision Blizzard (Graphic: The Next Level)

By Feature Writer James Kozachuk and Manny Anekal

 

Back on November 4, 2016, Activision Blizzard made a huge splash by announcing a massive upcoming league around their latest hit, Overwatch.

It drew considerable press and excitement with a flurry of consistent of rumors around price points, endemic vs. non-endemic teams and cities. 

And we continued to wait.

Then last month, like Prometheus gifting mankind fire, Blizzard released details on the initial 7 cities and teams that would take place in the Overwatch League.

For those keeping score at home, that's 250 days. What's happened in the world since then? Trump became President....I guess we can stop right there.

In that time, the NBA not only announced their NBA2K ELEAGUE and 17 teams would be participating. Riot Games announced details around their North American league.

After Blizzard's city announcement, more details emerged around revenue sharing and SuperData created a great chart the same day comparing both franchises.

Since then even more insight has been revealed into both Riot Games NA LCS and Activision Blizzard's Overwatch League.

In conjunction with SuperData, The Next Level wanted to take a deeper look at how both franchise options stack up.

 

NA LCS VS. OVERWATCH LEAGUE

 

New York Yankees, Dallas Cowboys, Toronto Maple Leafs collectively have been in operation for 273 years. How have they lasted this long?

In eSports many teams rarely last a year; for example, only four teams from the first North American League of Legends Championship Series (NA LCS) are still placed in the league.

How is this solved in traditional sports? Franchising.

The Maple Leafs were a founding member of the NHL, the Cowboys were the first expansion team of the NFL, and the Yankees spent a lot of money and got lucky or something [Edit: Sorry, Mets fan]

Now both Riot Games and Activision Blizzard want to bring this concept to their two flagship competitions: the NA LCS and the Overwatch League (OWL). While each league concept is similar, there are a few fundamental differences between their approaches.

Here's a side by side comparison of both franchises with further analysis:

LCS OWL Franchising Riot Blizzard

 

TEAM PLACEMENT COST

 

NA LCS: $5M due up-front, $5M paid over time.

OWL: $10M due up-front, $10M paid over time.

With a high buy-in cost for OWL, Activision Blizzard seem to be focusing entirely on bringing in big-name brands, specifically traditional sports teams, which provide a large amount of legitimacy for their league to outside viewers - along with the accretive value that eSports brings to pro sports teams.

With this in mind the best case scenario for Activision Blizzard is the one they've created: endemic eSports teams will need to raise additional outside capital to even consider OWL.

7 of the confirmed Overwatch League Locations (Photo: Youtube)

7 of the confirmed Overwatch League Locations (Photo: Youtube)

 

LEAGUE GEOGRAPHY

 

NA LCS: While focused primarily on the North American audience, 2 of the 7 teams are located in Asia and expect more teams to be confirmed soon.

Friday Aug 4: Activision Blizzard to Confirm Additional Cities (Photo: Twitter)

Friday Aug 4: Activision Blizzard to Confirm Additional Cities (Photo: Twitter)

Sunday AM Aug7: Activision Blizzard to Confirm Additional Cities (Photo: Twitter)

Sunday AM Aug7: Activision Blizzard to Confirm Additional Cities (Photo: Twitter)

Assuming the audience is primarily North American but with Global reach, this makes sense for brands looking for both, like Coca-Cola, which has partnered with Riot Games before.

Sound familiar? Hello FIFA.

OWL: Hyperlocal with Global audience potential as well. US focused brands will see a lot of benefit in OWL, especially since they can get involved in the amateur initiatives that each team is required - or allowed?-  to put on. We'll see brands with a unified global strategy getting involved in OWL as well.

City based leagues are all the rage from Super League Gaming, to Australia's recently announced league and definitely more on the way.

Is this the right approach and the right time? For another The Next Level article.

The Championship Zed Skin/Ward Sales Totaled $11.76M USD. 25% of this ($2.94M) was Added to the League of Legends Worlds Prize Pool (Photo: Riot Games)

The Championship Zed Skin/Ward Sales Totaled $11.76M USD. 25% of this ($2.94M) was Added to the League of Legends Worlds Prize Pool (Photo: Riot Games)

 

TITLE MAU/MTX REVENUE

 

NA LCS: League of Legends is a game with a mature audience and after almost five years of competition; the style, format, and idea of what to expect has been solidified.

OWL: With Overwatch, there's no guarantee on what will happen five years from now - hence that's the bet.  During year one we believe that most of the matches will be played out of a studio in LA - we've tried to confirm this 100% - so when will we see Home/Away games and what will that look like?

An apt analogy is that investors are basically buying Ethereum (OWL) versus investing into a 401K (NA LCS). We just don’t know what the competitive Overwatch community will look like, it could be a huge flop or a massive success.

That being said, Activision Blizzard has been notoriously strict on allowing organizers the license to run Overwatch tournaments this year and the metrics might pick up once a stable competitive scene is created.

Riot Games Announced a Player Association for NA LCS (Photo: Youtube)

Riot Games Announced a Player Association for NA LCS (Photo: Youtube)

 

TEAM REVENUE

 

NA LCS: Riot has already locked in a media rights deal worth $300M over 5 years with MLB/Disney's BAMTech. With the platform being specifically developed with LCS eSports in mind, I'm sure they'll have access to data and analytics we just haven't had before in eSports- data and analytics that are heavily sought after by more traditional brand advertisers.

OWL: OWL is still a big bet.  On the media front, Blizzard has a broadcast integration with Facebook, a 2 year deal with Twitch and you can almost guarantee will be shown on MLG.tv's platform as well.

Oh and FYI, if you want to make an exit and sell your OWL team, you owe Activision Blizzard 25% of your sale price.

With ESPN being owned by Disney, who invest in both BAMTech and axiomatic, we don't foresee them making many further media rights deals in the US; but the rest of the world is potentially open.

Timeline for NA LCS Franchising (Photo: Riot Games)

Timeline for NA LCS Franchising (Photo: Riot Games)

 

PLAYER BENEFITS

 

NA LCS: $75K Minimum Salary + Full benefits + Housing + Player Union + Salary floor at 35% of league revenues

OWL: $50K Minimum Salary + Full benefits + Housing + 50% of team performance bonuses

Blizzard needs to make it easy for OWL franchisees to find talent, because there's a very limited base of established talent. This includes scouting reports, plans for a combine, and an entire PR campaign based around "Every Overwatch player is potentially a professional!"

At the same time, Blizzard has year over year cost that each of their franchisees pay, in addition to their huge placement cost, cost of developing local infrastructure - hopefully Blizzard helps with this - and especially given that Overwatch teams comprise at least six athletes to League of Legends' five athletes.

5 Year Bitcoin Growth (Left) and the S&P500 (Right). Huge Potential for Growth with the Volatility Risk (Photo: Coindesk and Yahoo Finance)

5 Year Bitcoin Growth (Left) and the S&P500 (Right). Huge Potential for Growth with the Volatility Risk (Photo: Coindesk and Yahoo Finance)

 

Will the future of franchising take the form of Activision Blizzard’s strategy or will Riot’s safe and steady LCS model provide greater returns? 

Place your chips.