Jonathan Pan CEO of Elemental & VP at DOJO Madness talks with Mark Register about
Mark Register – What’s happening and what’s going to happen with broadcast rights for Esports?
Jonathan Pan – That is a very fascinating question.
I think what we have to look at is what has happened with broadcast rights for professional sports being broadcast digitally. For example the NFL game on October 25, the Bills v Jaguars game. I don’t have the stats off my mind but basically Yahoo was able to sell the full inventory for that game however at a discounted price as compared to what they would sell a TV spot.
The reason why I was really excited about that game is because now we have, once again we have transparency, we have one number. For a televised competition this is what some companies pay for ads. If game developers wanted to sell broadcast rights now they have a starting point. It’s such a fascinating problem because game developers don’t need to sell broadcast rights, they don’t need the money from broadcast rights.
It’s actually minuscule in the grand scheme of how they make money. In my opinion, for game developers, Esports is just marketing. Generally speaking if you don’t consider it performance marketing and just about building your brand, you don’t have to necessarily measure the ROI on Esports you just know it’s pretty huge.
For them spending double digit, triple digit millions even, actually let’s just go with double digit millions I don’t know of any company that’s spent triple digit annual yet, it’s a pretty decent marketing cost if you’re making billions of a specific game.
On the flip side they do want to promote the…they want to make the Esports ecosystem healthier and in that sense, they do want to get broadcast rights only in my opinion to provide a source of revenue for the teams.
For example I hope and I believe LCS will franchise one day, and when that happens obviously it will be great for the league to provide some revenue beyond what they provide right now directly to the teams.
From their individual business perspective broadcast rights are not necessarily for survival of certain Esports teams kind of like a lot of the old school Esports teams that started from grassroots efforts and they start from scratch, they are going to lack the capital necessary with a lot of the emerging teams.