Yahoo eSports Shuts Down

YAHOO ESPORTS SHUTS DOWN

Yahoo eSports Shuts Down (Photo: Oath)

Yahoo eSports Shuts Down (Photo: Oath)

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.

ESL's 2 Year Deal with Yahoo eSports Is Done (Photo: The Next Level)

ESL's 2 Year Deal with Yahoo eSports Is Done (Photo: The Next Level)

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

 

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:

There are a lot of reasons why this is happening but here's 1 very simple chart to illustrate a major point:

There's Google and Facebook and then Everyone Else (Photo: Poynter.org)

There's Google and Facebook and then Everyone Else (Photo: Poynter.org)

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.

How You'll Watch eSports Soon

HOW YOU'LL WATCH ESPORTS SOON

How You'll Watch eSports Soon (Photo: The Next Level)

TNL Take: Date: Soon

Even with all the self-driving DidiUber's around, my trip back from LaGuardia took forever because the renovation that started in 2016 is still going on.

My door unlocks as I approach my house and I feel the cool A/C that switched on when I was 15 minutes away.

Siri: Welcome home. I hope you had a great trip.  Can I do anything for you?

Me: When's the next Overwatch tournament?

Siri: The Champions Ladder in 17 minutes on Facebook.

Me: Notify me when that starts and put on the last Still Shaqtin' A Fool in the meantime.

Siri: You've got 10 minutes remaining of yesterday's show, would you like me to start there and continue with the latest show?

Me: Cool.

Siri: There's also an Indian documentary on a rising star from the slums of Mumbai. I've translated and placed in your Recommendations.

Me: Thank you.

 


In part one of eSports Media Evolution, we looked at Verizon/Yahoo's entrance with the 2-year ESL partnership.

In part two, it was the various ways that Disney's eSports investment could be used across it's various platforms and consumer touch points.

in today's final and part three of eSports Media Evolution, Ill look at where I believe eSports heading from an overall consumption perspective.

 

If you're going to start with Consumption, I think you have to start with Disruption.

 

Disruption and eSports come together for me based on two authors:

 

/01 THE FUTURE IS ALREADY HERE — IT'S JUST NOT VERY EVENLY DISTRIBUTED

Potentially my favorite quote of all time, from one of my favorite writers, William Gibson. Gibson wrote the seminal book Neuromancer in 1984 in which he coined the phrase "cyberspace"

What he's saying is that you don't need to wait for the future - it's already here.

Live Streamed Virtual Reality Surgery? Yes.

Want to send something to space on a re-usable rocket? Yup.

While great advancements are already here, it's how to make them more accessible to everyone on the planet vs. the minority.

Just like eSports needs to do.

 

/02 THE INNOVATOR'S DILEMMA

I read this book the same year that Netscape Navigator 4.0 came out - 1997 - which I still remember as changing the browser game.

Written by Harvard professor Clay Christensen, the main theory that emerged was that large companies focus too much on current customer needs, fail to adopt new technology and will ultimately fall behind - essentially the definition of disruption.

You clearly see this in Media today.

I made it a point to avoid as much "Live TV" coverage of the Olympics this year as a test. I was completely fine "watching" the Olympics on Twitter.

Here's some viewer data for this Sunday's MTV Video Music Awards:

TV Ratings: -34%

Facebook Streams: +938%

 

So what's this all mean for eSports?

How You'll Watch eSports Soon (Photo: The Next Level)

Very simply, in 2014 there was basically one place to watch eSports content: Twitch.

In just two years, you can now watch live content across:

 

Twitch. TBS. Twitter. YouTube Gaming. Facebook. ESPN. Verizon. VR. Mobcrush. 

 

And that's just in the US and not counting 24/7 satellite channels like Ginx or the gazillion Chinese live streaming sites.

So not only is Twitch being disrupted, but so is the whole space as Publishers begin acquiring their own means of distribution. 

Let's end with a look at one potential scenario for content similar to what you see in current Pro Sports and Broadcast deals:

 

Channels and Content

MLG.tv = Call of Duty and Destiny

Facebook = Blizzard

NBA.tv = Counter-Strike/E LEAGUE

ESPN = EVO Championship

Xbox = Minecraft

EA = You name a game of theirs

Twitch = Rocket League Championship Series

Verizon = ESL One Cologne

 

Now replace Facebook for NBC and Blizzard for Baseball and you can see the potential future.

 

It's already happening. It's just not everywhere yet.


If you're interested in The Innovator's Dilemma, here's a talk with co-founder of VC firm Andreessen Horowitz and coincidentally also co-founder of Netscape, talking with author Clay Christensen earlier this year:

eSports Media Evolution: Yahoo and ESL

ESPORTS MEDIA EVOLUTION: Yahoo and ESL

TNL Take: How you'll watch eSports is rapidly changing.

This is happening so quickly that today kicks off the first of three parts this week on the eSports Media Evolution.

 

eSports Media Evolution: Part 1 (Infographic: The Next Level)

 

YAHOO AND ESL

 

This Friday ended with news of a two year partnership between ESL and Yahoo eSports - or to view it from a pure monetization perspective; ESL and Verizon/AOL/Yahoo/Xbox.

Yahoo Esports is starting this relationship with ESL to distribute their content across Yahoo's platform; although it will go definitely go much deeper than that.

The key tidbit was this part of the press release:

 

"Yahoo and ESL will collaborate on the development of new tournaments to be covered and distributed by Yahoo, with new exciting integrated sponsorship opportunities for advertisers"

 

Whether Yahoo was the right partner for ESL is a fair question.

I think more importantly this shows how badly ESL needed Yahoo - rarely has anyone said recently how important Yahoo could be to someone else.

Here's why.

 

/01 The Dumbbell Theory of Media

I'd like to go deeper on this at some point but basically it's what I refer to as The Dumbbell Theory Of Media. Put it simply, over the past few years we've seen the Media landscape evolve into two power centers:

 

Distribution and Content

 

The Kings of Media may have always been this way but new companies have tried to play in the middle; be both Distribution and Content.  

This doesn't really work - although Vice maybe an exception.

 

As companies no longer can survive in the middle, the power shifts to either side of Distribution or Content or what looks like a dumbbell.

The Dumbbell Theory Of Media (Graphic: The Next Level)

One of the biggest things missing for ESL was their own distribution. I've mentioned before the challenges of being mainly a league/event company.

While Twitch was ESL's primary distribution vehicle for a while you could start to see that relationship fraying this year.

Back in March, Twitch announced a partnership with Psyonix to develop a Rocket League Championship Series. This was something that ESL previously handled.

Now with the Yahoo deal and tournament partnerships, you can easily see Exclusive ESL content on Yahoo's platforms in the future.

 

/02 Ad Sales

This was ESL's second big challenge.

While the company is over a decade old and well established in Europe, it doesn't have the Brand recognition of Twitch or MLG here in the US.

Further they have a relatively small US based Sales team. 

Now couple that with potential marketplace confusion - "Do I buy from Twitch or ESL?" - and this hinders large Ad revenue generation.

This deal instantly eliminates all three issues.

If you don't think that's important, the words "advertiser" or "sponsorship" were used 5 times in the press release.

Now while the release and subsequent press coverage focused on Yahoo eSports moving into original video content and live tournament coverage - which is important - more importantly this provides a huge multi-platform sales opportunity.

OK, sorry for using "multi-platform sales opportunity" because everyone says it but in this case it's fairly vast:

 

  • Yahoo: Branded content opportunity directly within the eSports section with distribution across the platform

 

  • AOL: While AOL did shutter gaming site Joystiq, there's further content/distribution opportunity across Engadget, Huffington Post, and Techcrunch

 

 

  • Verizon: The biggest one of all. Outside of the obvious Mobile potential, the bigger selling point is a one, unified Sales team

 

My understanding is that the various Sales teams from the recent acquisitions aren't combined under one "Gaming/eSports" group but that's a fairly easy operational fix.

 

Ultimately all of the recent large Platform and Media companies entering eSports is good for one thing:

 

Brands, Agencies and Media Buyers.

 

Any familiarity with teams, processes and where checks have already been written eases the eSports education that's needed to drive the industry further.


Tomorrow we continue with eSports Media Evolution: Disney