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Broadcast Rights and the Issue of Making Money in Esports

Bleda 2018-02-19 07:35:25

Many esports fans are unaware of what broadcast rights truly are, which is perfectly understandable. But when combined with the entitlement and fickle nature of the esports community as well as the added assertiveness and callousness that the online medium entails, esports fans come off as if they think themselves veteran TV executives. These issues crop up fairly frequently, and they often mirror changes in broadcasting. Gamers complain about how a departure from Twitch will ruin ESL and FACEIT and thereby the esport they broadcast, but these fans are neglectful when considering their authority on the subject. Due to the persistence and especially heinous nature of the latest backlash against ESL’s choices in broadcasting platform, I feel obliged to address the topic of broadcasting in esports.

 

The Criticism

 

In the past week, there have been numerous posts with titles such as “ESL On Facebook is literally unwatchable.”, “Shoutout to y'all for not watching facebook streams”, “4k viewers on the English stream of EPL 15 rounds into FaZe-G2...”, and “Watching ESL Pro League on Facebook sucks rn.” Global Offensive moderators have yet to take these posts down even though they have become spam and are incredibly unreasonable. It’s not that the criticism itself is unreasonable, but the way in which the mob has voiced their criticism is.

 

It is as if those posting these threads are ring-leaders attempting to rabble-rouse the masses of CS:GO fans to attack ESL. And for what? This same madness, although not quite as bad, occurred over ESL’s switch to YouTube one year ago. YouTube has higher video quality, an interactive chat system, greater control over the streaming experience, and has the best VOD system in the world. The only possible reason for a viewer to hate YouTube is tribalism. People are so engrossed in “Twitch culture” that they are turned off to other possibilities and people that aren’t part of their group.

 

While Facebook as a gaming streaming platform definitely deserves some criticism, YouTube most certainly does not. One’s favorite streamers may not be on there, but esports fans are just going to YouTube to watch the event. It’s not like people wanting to watch a sports documentary that they would typically view on the ESPN Classic channel will get angry about watching it on NBC. There is no additional cost. There is no inconvenience. There is no real problem, but people make it a problem. Facebook does have problems, but due to the backlash seen with YouTube, it is not all due to those problems.

 

A recurring line among fans during this Facebook controversy is that they have chosen foreign language streams that they do not understand over the ESL main broadcast on Facebook. In a thread attempting to make the Facebook situation seem worse due to seemingly large viewership for the foreign language streams, /u/Potato71, a verified RuHub & Epic Events employee, was able to verify that the “large” Russian stream numbers were not due to an influx of new viewers, that they were normal, and that the number of viewers from non-Russian language regions were normal. In another thread, people were saying they’d rather watch foreign language streams on Twitch than watch an English stream that they could understand on Facebook. The comments were filled with people extolling great praise. The insight from /u/Potato71 and just how vocal Facebook-haters were on reddit just goes to show how vocal a vocal minority can be or just how fake they can be.

 

The Need to Profit Off Broadcasting Rights

Tournament organizers are starving for cash while esports fans greedily lap up validation because esports “has finally hit the mainstream.” Much of the criticism from fans is based on a lack of knowledge and an undying need for validation. When told that the Season 4 World Championships had larger viewing numbers than the World Series and NBA Finals, fans couldn’t get enough of it. Few of them stopped to consider how weak of a comparison between a month long international tournament and a national final is. Without an understanding of what it took to get numbers that initially appear to trump the biggest sporting events, fans would expect that TO’s are raking in tons of cash.

 

Few people are really making money in esports, and when they do make money, it is to cash out to large non-endemic companies. Everyone in esports is here today so that they can be here tomorrow when their investment materializes. The tricky part is staying afloat till that day comes. Everyone is spending beyond their means with the influx of venture capital money in esports. For example, esports news sites have not found a way to actually make money. This is part of a larger issue with media as a whole not being able to monetize content correctly, but it is no secret that many esports news firms come and go with the changing of the seasons.

 

ESL is already owned by a large holding company, Modern Times Group. While they do have access to large amounts of money, those in charge of funds at ESL have greater accountability than do team owners with access to VC money. In short, ESL, while being owned by a big company, does not have free reign to spend money like there is no tomorrow, and with that in mind, decision-makers at ESL are under pressure to keep losses low while putting on the best show. After partnering with numerous companies and venues, merchandising, and selling tickets, ESL has no other option than to sell their broadcasting rights or go pay-per-view.

 

As I mentioned before, the esports community is incredibly entitled and fickle. They want the best viewing experience for free. They want bigger prize pools and bigger explosions. Fans will even get upset when they don’t get paid for watching tournaments, which has been shown by the reaction to not getting souvenir drops during the Major. Fans will absolutely not being willing to shell out money in order to enjoy their favorite pastime, and in choosing the lesser of two evils, ESL has chosen to sell the broadcasting rights to Facebook.

 

This is not a move done out of greed but one out of a need to survive. One does not blame a wolf for killing a deer, so how can esports fans be justified in blaming managers at ESL for trying to minimize losses in order to keep their bosses happy and to continue putting food on the table? The answer is — they can’t. If ESL didn’t have to worry about money, they’d be on Twitch, and if you didn’t have to worry about money, you’d be playing video games all day instead of going to work or school. The simple fact of the matter is that we all need to make money, and that often means making a sacrifice in order to get it. It is not wrong or greedy of ESL to want to be a sustainable company; it’s just common sense.

 

Speaking of common sense, many fans have quipped that ESL will lose money on this deal because they are only getting 4,000 viewers. The people at ESL are not idiots. There is a reason why the people working at ESL are the real esports experts and are not stuck being Reddit experts. They knew full well that they would get a much lower viewer count, but they made the decision anyway. Economists assume that people make decisions in their best interests, but as humans well-acquainted with the real world, we know very well that’s not the case. However, we are not looking at teenagers who use Reddit when analyzing this move; we are looking at businessmen with college degrees and experience in the field. If ESL made a deal knowing that they would have fewer viewers, then that means it was made in their self-interest and that Facebook was willing to pay a lot more money for broadcasting rights than were Twitch and YouTube.

 

Sharing Revenue

 

Team owners aspire to one day share in the profits from broadcasting deals. This was attempted not too long ago by a conglomerate of North American team owners in a group known as the PEA. PEA’s attempt at revenue sharing began in CS:GO and replacing EPL in NA. Their goal specifically was to form their own exclusive, franchised league and sell broadcasting rights to a third-party. ESL was going to lose a major source of their revenue if this were to happen, and it almost did. The only thing standing in the way of PEA’s NA CS:GO league was a player union led by SirScoots and, in part, seangares.

 

As you can see, ESL was given a harsh reminder that they weren’t the only ones wanting money from selling broadcasting rights and that this goal needed to become a reality very quickly. The blame doesn’t start and stop with ESL. It starts with them, and it continues down to the teams who wanted revenue sharing from broadcasting rights; players who want bigger prize pools, bigger salaries, and better support staff; and fans who also want bigger prize pools and the best events. If the fans aren’t willing to pay, if the players aren’t willing to take a salary cut, and if the orgs won’t settle down, then ESL has no choice but to pursue selling broadcasting rights.

 

Just because ESL isn’t being run like a charity doesn’t mean that they’re greedy, and if you must blame ESL for trying to keep their share of the pie, then that blame ought to extend to everyone else in esports, including yourself. The issue of correctly monetizing esports and media in general is a very complex issue. Instead of beginning the discussion with attacks on other groups, we should determine the context of the situation and our biases.

Image credit: ESL - Helena Kristiansson and Carlton Beener

Follow the author for more on Twitter at @Bleda412.

 

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