YAHOO ESPORTS SHUTS DOWN
TNL Take: One of the sadder eSports stories to emerge from E3 last week was that Yahoo eSports would be shuttered.
Anyone losing their job is bad news and having spent over a decade in the gaming space, I've seen plenty of friends laid off after putting blood, sweat and tears to ship a title on time.
This is unfortunate but not a surprise however: it had been talked about that the site was struggling overall - ESPN eSports has ~10X Twitter followers - and a week prior, it was confirmed that Verizon was laying off as many as 2,100 people of AOL-Yahoo's staff after the merger closed.
This obviously also kills the 2-year deal that ESL signed with Yahoo eSports last August to produce tournaments together as well as brand deals like this one with Reese's Puffs.
A few days prior to the Yahoo news, another eSports site Gamurs, announced the closure of one of the leading eSports wiki sites. Gamurs themselves merged with Dot eSports just 3 months ago.
Gamurs CEO Riad Chikhani wrote an excellent Medium post that outlines the reality of digital media today especially for those in gaming and eSports. Here are a few key points:
- One of their sites was averaging around 1.85M page views per month with 5 ads on the page, generating ~9M+ "ad impressions" per month. The CPM - Cost Per 1,000 Impressions aka How Sites Make Money - averaged just under $3 last year. So in an absolute perfect world scenario, the site would generate about $300,000+ a year which isn't bad. However, perfect worlds don't exist, especially not in media
- Generally ad block is anywhere from 25%-50% depending on content. However, gaming/eSports has the highest ad block rate of any type of media content. Riad confirmed that ~80% of site users were using ad block which is absolutely in line with both gaming media sites and some streaming content
- I'd also guess the site wasn't getting close to a $3 CPM, with Riad tweeting that he had invested $270,000 into the site - and got just over $5,000 in revenue in 12 months
This isn't restricted to gaming media but digital media overall. Here's what's happened in just the past 3 months outside of Verizon:
- Time Inc to lay off 300
- NY Times to offer buyouts for editors
- Conde Naste to cut 100 jobs
- NBC Universal laid off some of their SVOD staff
There are a lot of reasons why this is happening but here's 1 very simple chart to illustrate a major point:
Analysis from Pivotal Research group estimated that 71% of all digital advertising went to the two industry behemoths, Google and Facebook, while the trillion other publishers, media companies, social networks, and programmatic middlemen fight for the ever dwindling portion of the pixelated pie.
Now throw in Oath (Verizon/Yahoo/AOL), Twitter, Snapchat and 5 companies have a lock on ~80% of the digital ad market.
5 companies. 80%.
There have been many, many, many articles on the "downfall of digital media and the power of the few", however this quote from Talking New Media lays it out well:
I’ve been in publishing professionally since 1981, but anyone can write about media these days, and most of the sites that do are staffed with those whose very first job in media was to do so. Some end up doing a great job and are supported by editors and revenue producers. Others come and go so frequently that it is hard to chronicle their launch and death. But success is not merely a matter of doing one thing well: content or design or technology is not enough in isolation, nor is having one great idea.
The media business, like making a film, involves many different skills, great ideas, creativity, sufficient funding, license to experiment. Then a lot of luck.
Good luck to all of you.
Wish all the staff of both sites a safe landing.