Drilling deep on how to monetize esports

Takahashi: There are a lot of inescapable ads out there, right? And that’s the goal. We did go into this a bit already, but I’m curious how some of the conversations go with brands, about how you get into esports. Are there any technologies that can accelerate brands jumping into esports?

Singer: I’ll hop on this first, being the technology provider. We’re talking about making money and how you engage your audience. Obviously the first way, when you think about esports, is large-scale live events. Those viewing experiences need to be the highest quality viewing experiences. All of these events are driving 10 times the engagement that on-demand events do. Your long tail doesn’t match that big burst of engagement and social presence and everything that goes along with it.

I’m going to try to make this answer fairly brief, rather than a big technology pitch. But at Akamai we see three keys to making the most of that opportunity in your big event. That’s the quality and reliability and scalability of your stream. I’ll give you a quick example. Earlier this year, the India Premier League for cricket — I know we’re talking esports, but bear with me — it had the world’s biggest online viewing event to date. We had 10.3 million concurrent viewers. At Akamai we hosted 65.3 terabits per second of traffic on the network.

Why is this a big deal for esports? There are two reasons. One is, these conversations–that’s where we want esports to go. We want these huge events with everyone viewing at the same time. That’s the size you want to have. The thing about the audience, again, and I alluded to it earlier–what device are they watching on? What network are they watching on? How are they engaging with your content? There are a lot of mobile viewers. People want to watch on the train. People want to watch everywhere.

The second is that, when we’re looking at this event happening in India, we actually had folks testing the network in train stations in Mumbai and Delhi to make sure that the network was functioning. It’s going to be the same for esports. Kent is going to have viewers watching on their phones on trains in Seoul. Or maybe I want to watch his match this morning at 6AM on my commuter rail trip. For these top-quality online event experiences, you need to have a really strong CDN partner that has all of those bases covered in scalability, reliability, and quality.

That’s what we’ve done. It’s what we did with the India Premier League and with a lot of the biggest large online events in the world. That’s my pitch and what we really think, as far as technology being important. It’s to make sure the infrastructure is there to have these massive online events happening, and have people engage with them in real time.

Wakeford: Obviously what Akamai does is critical for the overall ecosystem to exist. I think as it relates specifically to sponsors and brands, what brands are going to look for as they dive into traditional esports is they’re going to look to the same way that they buy, measure, and report on all their other traditional media buys and sponsorships.

What we’ve seen is a number of companies coming in, both new companies like FanAI, which I happen to be on the board of, or GumGum, which provides media valuation, and even Nielsen, which is coming into the esports world–all of these companies are now providing a lot of the data analytics, targeting capabilities, reporting capabilities, so that these brands and sponsors can now come in, do their media buys, see the valuation, compare it to what they’re doing in traditional sports or in other traditional media.

What you’re seeing with a lot of brands is that the return on the investment in esports is greater than what they see in other types of media buying. It’s that type of measurement, that type of feedback loop that’s going to catalyze the further adoption of esports by a lot of the big brands.

Rachael Brownell: Our poll was, is your company currently doing esports? And you had a variety of options there. It’s interesting here because it’s a sort of tie between, “No we’re not currently doing esports” and “We’re interested in doing esports.” The next one is the folks who have been doing esports for more than 12 months. Basically, what it sounds like is our audience is either thinking about it and not sure where to start, or they’ve been doing it for more than a year. Robb, let’s start with you. Does anything in that surprise you? Do you feel like a lot of people aren’t quite sure where to start?

Chiarini: It’s great. I think what they’re doing is right. It’s what we keep seeing from new people entering the space. They’re doing research. They’re listening to webinars, jumping to conferences, having meetings. They’re learning and trying to understand the space. Because again, we use “esports” as this bigass title, right? [laughs] It’s a lot of micros, a lot of things. It depends on what game, what publisher, what team, what organization, what region. There are so many different layers that for someone going in they just get inundated. It’s crazy. You hit a wall and don’t know where to start.

I think that people joining these kinds of things, listening in, getting some perspective from different points — from publishers, from teams, from different partners and sponsors that are already in their space, from technology brands, all the different groups that are out there — is great. This is what we see all the time.

I can’t tell you how many times I go to a conference and I have a group of people who come up to me and say, “We don’t do anything, but we’re interested. We don’t know quite where to start. Where do we go? We’d like to talk a bit.” They’re just learning. So this is totally expected and totally appreciated. I’m glad they’re doing that. This is the group of people I want to talk to the most. How can we help them find their way in this space, create some meaningful activity, and be able to expand on that? We just want to help educate.

Brownell: Jonathan, two questions, really. It sounds like a lot of people are interested in esports, but not everyone knows how to make money doing it. Unless we’re all millionaires, we can’t usually undertake to do things unless we can fund them. Are these results surprising to you? Do you have a recommendation for folks that are just starting out?

Singer: No surprise here, but–there were some questions that popped in that I’ll tie to what you just asked me. Someone said 20 percent penetration of ad blockers for gamers seems very low. Who provided that data? That was actually the general population. We can assume that with gamers it’s going to be higher. Another question was, what can we do right now to make money?

If you’re not in the position to go out and buy a team or sponsor a team, then there are three different things that you want to be thinking about to go in and provide differentiation and make money out of esports. Those are relevance, value, and choice.

Relevance gets back to that ad blocking conversation and what Kent said. Advertisers here are relevant. They’re in the right place. They’re hitting the right people. But gamers are going to have ad blockers installed. What can you do to change their minds? How can you reach them if you know ways to make your advertising more relevant to who someone is at that point, and not the boots they bought last week that you’re going to market to them again? If you can make the ads more relevant — if you’re in that space — you’re in a good place to address the rapidly growing esports market.

The second piece, value, is what Robb alluded to earlier. We can provide people with in-game perks. We can provide people with in-game currency. There are companies like Sliver.tv that are providing similar things as perks just for viewing. If you’re in a place where you can use a new technology like blockchain to really track what people are doing and help reward viewers for consuming your advertising content, or consuming the streaming content itself–technologies and those sorts of business models are another way you can make money in esports.

The third is choice, which we haven’t gotten to, and I’m curious how Kent and Robb are going to react to this. I think I know how Robb will react. That is, are you developing a technology or looking at technologies that allow viewers to engage with the game itself? This gets to the question of, what is an esport? What are traditional gaming models versus what we can do in the future? Can I interact with your game? I said it in our interview. Can it be the Hunger Games? Can viewers pay or vote to change the map that the players are going to play on next? Can they buy bonuses for their team and throw a little silver box from a parachute? Can they do things like that? Is there technology that enables that, or a game that’s going to enable that?

That’s the last piece of what I think is an interesting place to make money. I want to leave that last one out there for Kent and Robb to respond to and say, “That’s a terrible idea” or “That’s interesting.