![]() ![]() ![]() “Whereas Twitch by its nature is global and free. “The Premier League in soccer, for example, will sell hundreds of media rights deals in geographies all over the world,” says Jakob Lund Kristensen, founder of Astralis Gaming. Their 2020 forecast, however, predicted media rights revenue would be just $185.4 million (17 percent) in 2020, under half of previous estimates. In 2018 Newzoo predicted that revenue from media rights would amount to nearly $400 million (24 percent of all revenue) by 2021. Media rights deals have long been touted as a sign of maturity for esports, but their emergence has been slower than anticipated. In esports, most revenue comes from sponsorship deals developing media rights deals would enable teams, leagues, and tournament organizers to diversify their revenue streams and reduce the industry’s financial precarity. Fans tend to be upset at the increased costs for a couple of years but participating teams see the benefit (albeit to differing extents) of the profits downstream. The paths that many traditional sports have pursued in order to become financially independent have often included lucrative, exclusive rights deals. ![]() “It’s very under-monetized at the moment, compared to where it could be.” “Everyone in the industry is, to a degree, betting on media rights maturing as a revenue source,” says Luke Cotton, an esports consultant at Code Red Esports. While the esports industry has mostly matured alongside it, it remains venture capitalist-led rather than self-sustaining. Amazon's takeover in 2014 cost the retail giant $970 million, but that investment paid off, as Twitch currently boasts over 50 million monthly visitors. Nearly a decade has passed since and Twitch has grown alongside the burgeoning industry. “So organizers could go to sponsors and list off data that they would be looking for, instead of just giving the peak number of viewers and a couple of photos.” “Twitch not only massively reduced the costs of being able to distribute video worldwide, it also gave tournament organizers and streamers a robust set of analytics that they didn't have access to before,” explains Will Partin, an esports researcher and consultant. While Twitch solved that problem, its sheer dominance in the space is giving rise to a new one - profitability. Prior to its incarnation in 2011, esports comprised a decentralized and confusing ecosystem without a streaming hub for fans and gaming enthusiasts. Twitch has become synonymous with competitive esports. ![]()
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