Viewing of eSports rose by 19% to account for six billion hours of viewing across the globe last year, and the eSports video market is expected to deliver US$1 billion (€900 million) in advertising revenues by 2020, according to IHS Markit.
According to the research outfit’s eSports and the Future of TV report, online video remains the key driver of the eSports video market.
China is the largest market for eSports video, accounting for 57% of all viewing last year. The number of video streams delivered in China totalled 11.1 billion in 2016, compared with North America, the second-largest market, with 2.7 billion video streams.
Esports advertising revenue was about US$280 million globally in 2016, but eSports is expected to become a US$1 billion industry by 2021. The growth will be primarily driven by video, influencer marketing and sponsorship, according to IHS Markit.
“The rapid growth of eSports audiences has attracted some of the industry’s largest media and technology companies to the genre, with the likes of Amazon and MTG acquiring key assets,” said Ted Hall, research director for IHS Markit and the report’s lead author. “Some of these acquisitions are initiating shifts in eSports business dynamics, with players such as China’s Tencent seeking to control assets across the value chain, and publishers moving into league operation. Investment in eSports will pay off for its big-name backers, as the genre expands both within its target demographic and outside it, with increasing exposure on linear TV set to bring in casual and new fans.”
While online still accounts for the majority of eSports video viewing, the global reach of the activity and the fact that publishers of eSports content are using video to drive other businesses holds important lessons for TV companies, according to the research group.
“The rise of esports provides some valuable lessons for channels and programmers more broadly. In particular, it demonstrates the value of aggregating audiences globally, rather than the more country-specific approach that defined much of the traditional TV business,” said Dan Cryan, senior director, IHS Markit and a co-author of the report.
He said that “an emerging class of new entrants [is competing] for audiences driven by objectives and business models that are orthogonal to traditional TV”, with publishers delivering eSports video “because it helps their other commercial interests rather than having content monetisation as their primary focus. This sort of competitive diversification is set to become more common and spread to other genres with time.”
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