SORRY, ESPORTS VIEWERSHIP DOESN'T EQUAL BASEBALL OR HOCKEY...YET

League of Legends World Championship at Madison Square Garden (Photo: Riot)

TNL Take: With the recent rapid acceleration of eSports investment, I’ve been meaning to update a few of the original themes I began The Next Level with:

The Reality of eSports Revenues

eSports Viewership Against Traditional Sports

eSports on TV

A slew of recent media deals - Webedia/ESWC and Vivendi/Canal Group/ESL in France, Mediapro in Spain, ESL in Africa – bring to light the potential value of the eSports viewer.

In particular, Newzoo’s latest report titled “eSports Viewers Equal NHL and MLB Baseball Viewers” was a perfect time to address an early theme around eSports viewership.

Newzoo eSports and Sports Report (Photo: Newzoo)

Unfortunately the reality is just not true.

I’m not singling out Newzoo.

If you’re in the business of selling research reports - you’re in the business of selling research reports.

The reality is that the smart money is able to see through the headlines and realize while there is vast potential in eSports; we still have a lot of work to do to get it close to Sports viewership or revenues.

So let me show you why it’s incorrect.

/01 DATA VS. POLLING

Newzoo’s report was based on a poll using their Consumer Insights panel used in 27 countries and focused on their US audience.

Their results show that 22% of Male Millennials watch eSports; which is higher than Hockey and about equal with Baseball.

When possible, I always prefer quantitative data over qualitative data.

The results are too easily skewed; just see any recent research on election polling done via phone.

So using a poll and then saying "76% of eSports enthusiasts say eSports is taking away from hours they used to spend viewing sports" doesn't really tell the whole story.

Because in my opinion it's still way too early.

I’m sure there can be plenty of arguments from PHD’s in research but let's get to the data.

/02 ESPORTS TV VIEWERSHIP VS. BASEBALL AND HOCKEY

TNL eSports Infographic 012: eSports vs. Baseball and Hockey On TV (Graphic: The Next Level)

So here's the reality.

While we've had 18 eSports events on TV in 2016, its tough to gauge an "average" with so much varied eSports content and on different distribution channels.

So I'm going to use E LEAGUE as an eSports baseline simply because they've made the biggest bet of any media company and produced the most consistent content.

So here's how the viewership compares:

2015 MLB on Fox Saturdays was 10X eSports with 2.2M on average
2015 NHL on NBC was 6X eSports with 1.5M on average

So clearly Baseball and Hockey against eSports viewership is still doing fine.

But here's where it gets interesting.

MLB's average viewer is 55+
NHL's 18-34 audience is only 25%
eSports average viewer is 25

Wouldn't a Brand want ~30 years of potential revenue?

What happens 10 years from now?

So while Baseball is still significantly ahead of eSports, Hockey is relatively close - but both have audiences that are vastly older than those that watch eSports. And I say relatively in terms of point /04.

/03 MLG ON USA NETWORK 10 YEARS AGO

MLG's Pro Circuit on USA Network In 2006 (Photo: YouTube)

So here's another question - can we judge if the eSports viewership on TV has grown or shrunk?

Probably not as again it's so early and brings up another question - does eSports even need TV?

Short answer: No, not in TV's current form as we know it.

But here's an interesting comparison of eSports TV viewership over time. Again the usual qualifier of very limited data points, different content, audience, etc.

TNL eSports Infographic 013: eSports on TV 2006 vs. 2016 (Graphic: The Next Level)

So what's that tell us?

Not a whole lot but let's break it down.

That's 7 total data points comprised of Major League Gaming on USA Network across 6 games in 2006 and E LEAGUE's 1 opening game on TBS in 2016
A Nielsen rating is basically a % of the total Households as defined that year. For example, in 2012 a 1.0 rating was equivalent to 1% of the 114.7M Household population or 1.147M.
Both USA Network and TBS have equivalent 2016 US Coverage at 79% or 93M Homes
Assuming that both Networks had similar coverage in 2006, why is that baseline 3X higher 10 years ago?

Again I don't think you can deduce a whole lot from such minimal data but it does continue to ask the question:

In the age of Twitch and Mobile, does eSports need TV?

/04 THE CURRENT REALITY

ESL One New York at Barclays Center (Photo: ESL)

Here’s the biggest issue when comparing traditional sports to eSports, whether its TV Viewership or Events.

Quantity.

I’ve said this repeatedly. While the one-off comparisons of eSports TV Viewership against certain niche traditional Sports are looking good – I’ve done plenty of this analysis myself – the amount of eSports content vs. traditional Sports content just isn’t there yet.

Even look at Events.

ESL One at Barclays Center was great and the 2016 League of Legends Semi-Finals at Madison Square Garden this past weekend was amazing.

I mean, the wave at MSG for eSports.

But the reality is that while ESL will hold 2 days at Barclays Center in 2016, they will have 82 nights dedicated to NBA and NHL at minimum this year.

Now does eSports need 82 nights a year?

Definitely not but definitely more than 2.

Related to my previous point about eSports getting close to NHL relatively, it's a similar quantity issue currently. There were 105 NHL regular season games across NBC and NBCSN.

If eSports gets to 30 programs in 2016 we will be lucky.

/05 SO WHAT'S THIS ALL MEAN?

God AKA Faker of SK Telecom (Photo: Riot)

It's all still way too early.

The Cincinnati Red Stockings played the first professional Baseball game - 146 years ago.

The Ottawa Senators won the first NHL Stanley Cup - in 1927.

So give eSports the time it needs to build a true infrastructure over the next 5-10 years and everything will be fine.

Further, even the notion of comparing eSports to traditional Sports on TV doesn't make sense but it's unfortunate necessity for one reason alone:

Advertising.

As the Ad budgets move from TV to digital - yet TV still continues grow itself kids - there's a natural comparison against TV ratings.

Yet as more eSports programming does continue to grow on TV and traditional Sports ratings on TV are impacted - anyone want to short Olympics TV Rights? - the gap will close.

We just got a while to go.