Media rights, driven by ad revenue, are becoming a vital part of the esports industry, and the prime example is YouTube's massive investment.
YouTube Steals Call of Duty League and Overwatch League From Twitch
It’s official – YouTube acquired exclusive rights to broadcast some of the world’s most prominent esports leagues. This means Google got a massive push in the right direction in the gaming sphere and is looking set to return to the livestreaming and esports broadcasting battle with Amazon’s Twitch. Yes, there are other players in the game too, such as Mixer and Caffeine, but they are more oriented towards individual gamers/brands than towards esports events.
Franchised Systems Gaining Importance
YouTube, one of Google’s biggest subsidiaries, recently acquired exclusive rights to upcoming seasons of Call of Duty League (CDL), Overwatch League (OWL), and the entirety of Hearthstone esports. We’re talking about a multi-year partnership deal here, ensuring the long-term stability of all three esports titles in question.
The two aforementioned leagues, CDL and OWL, bear quite the significance due to the nature of their ecosystems. You see, both leagues feature closed-off, franchised systems with esports organizations buying long-term spots, thus becoming direct partners with the competition itself. It’s sort of like the esports version of major league sports in the US. Organizations had to pay hefty sums for a spot in the competition, all for the sake of long-term stability, better sponsorship deals, and superior brand exposure.
How much importance can CDL and OWL gain from YouTube buying exclusive media rights? Well, to understand that, we must understand the role of media rights in esports!
Media Rights in Esports
Media rights are often intertwined with regular sports and television. This time around, we’re referring to media rights that reflect on esports and the most popular gaming/streaming platforms such as Twitch and YouTube.
The numbers are quite impressive. In 2018, total revenues (from media rights, ads, sponsors, merch, tickets, and game publisher fees) amounted to $906 million. Media rights revenues amounted to 18% of that amount. $161 million, to be more precise. Projections suggest media rights revenues will come close to $400 million by 2021, which would put them at 24% of the total amount.
Looking at the numbers, we can see an almost 50% increase in media rights revenue CAGR from 2016 to 2021. The numbers will keep on growing, that’s for sure, further fueled by the recent CDL and OWL deals.
Could CDL Endanger the Project?
Everyone seems to believe Call of Duty league is doomed to fail, so it’s only logical to ask the following question – could CDL endanger Youtube’s project?
After all, there’s a ton of money involved in the Activision Blizzard plus YouTube media rights partnership, so such questions are only logical.
Judging by the longevity of the deal (we’re talking about a multi-year partnership here), both parties seem to believe the inaugural CDL franchised season will be a real hit. Even though community interest doesn’t back such claims, knowing the experience of both organizations, they definitely have a plan B ready in case of a CDL flop.
What Does All This Mean for OWL, CDL, and YouTube?
For starters, YouTube going out of its way to acquire media rights for CDL and OWL further increases the value of franchised leagues. After all, Call of Duty League and Overwatch League both feature franchised systems and could be paving the way for a new era in the esports industry.
Furthermore, YouTube’s acquisition of CDL and OWL media rights means the folks over at Google still haven’t given up on esports opportunities. Yes, YouTube Gaming was a massive failure, but YouTube definitely is coming back to the gaming/livestreaming game…
In other words, the fight between Twitch and Mixer for gaming/livestreaming supremacy just got another wicked player. A player that’s not focused on creating and maintaining business relationships with individual streamers, but on developing a community dedicated to specific franchised events.
That seems to be YouTube’s esports strategy going forward, whereas Twitch is still trying to figure out a proper response to Google’s Stadia, let alone dedicate more attention to acquiring exclusive rights for upcoming esports competitions.
Activision has no doubts – franchised leagues are the way to go in the esports sphere. Their Call of Duty League and Overwatch League are basically the esports equivalents of conventional sports leagues such as NFL and NBA. Needless to say, media rights and ad revenue are the key money-making figures for such leagues and systems, and Activision’s partnership with YouTube ought to mean a great deal in the long run.
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