Competition Shift: The Live-Streaming War

In 2010, the emerging of the esports market lead to an interesting power struggle of branding in terms of player and team representation. Comparison of a player’s value was upon who would bid the highest and which teams had the most authentic sponsors; legitimizing their brand. As new games emerged such as League of Legends, Counter-Strike and Dota 2, it became clear which team brands withstood the test of time. Similarly, tournament brands also competed throughout the years for top-tier player attendance, sometimes overlapping with one another in scheduling and fighting for the best reputation in terms of prize-pool, accommodations and consistent quality production.

Now it is the turn of live-streaming companies to compete. With the international circuit becoming consistent in scheduling and player and team brands establishing presence, content-value is improving. As Twitch starts to wrap up their exclusive contract with ESL in 2016; new live-streaming platforms such as YouTube Gaming, Azubu and Hitbox will be looking to bolster their audience numbers through these competitions. An open war is starting – to win an ever-growing audience in gaming and esports – but only the service that incentivizes both the viewer and empowers the broadcaster can outclass their adversaries.

Winning an audience and broadcasters is beholden to one key area: features/exclusive incentives. This is what sets traditional television, and its divide between content and passive viewers, different from live-streaming – which has a more active audience who can become your content (broadcasters). Incentives not only create reasons for communities to visit a platform, but a justification to return, despite alternatives readily available. With Twitch being the early bird into this market, their ‘incentives’ has become their core service: a unique community culture (Twitch chat/TwitchCon) and broadcasters (LIRIK, summit1g); distinctive brands that bring in tens of thousands of viewers monthly. Since then, they’ve continue to build features and opportunities that achieve two areas: to create a viewer’s customized experience and enable their broadcasters to a personalized production.

Capture

On top of homegrown popular broadcasters on their platform, Twitch also hires many front-facing talent from games like Hearthstone (Dan “Frodan” Chou), StarCraft (Sue “Smix” Lee) and Street Fighter (Mike “Honda4Life” Ross) to serve as relation pillars for their largest esports titles and for events or in-house segments with key partners (from launch events to weekly discussions)

(see the article: Community Engagement: Identify Yourself for further detail on Twitch’s ability to rapidly establish a trusting identity per a game’s community base)

Platforms purchasing exclusive streaming rights of teams are creating initial reasons to visit a platform but not the necessary tools to retain their audience. In essence, they create a passive, divested audience that are not a part of a platform’s community, but a following borrowed from the signed professional team. A live-streaming company can continue purchasing exclusive rights to bolster their initial numbers, creating a forced viewership, but that cost will rise each year with marginal results and few converting into organic broadcasters. As the event calendar for 2016 starts filling up, the gaming and esports scene will start to see those same initial reasons to visit live-streaming websites, as events, ranging from all ESL esports events to traditional gaming conventions, start to become simulcasted. It will be up to those companies to find innovative ways to retain that audience. For example, in June 2015, Twitch allowed all broadcasters and users to ‘co-stream’ the event; bringing more eyes to the event, but customized for the viewer (meshing the E3 brand with their favourite personality) and the broadcaster who could supply their own graphics and commentary to it. Alternatively, Hitbox had an exclusive AMA with their sponsored team, OG, who had just recently won a Valve-sponsored Dota 2 Major in Frankfurt, Germany. Although the Frankfurt major was not live-streamed on Hitbox, they meshed their brand with a sponsored team, bridging a borrowed following of a professional team to their site.

Capture

Another example is where Azubu tapped into those with limited internet connections by providing audio-only broadcasts to reduce bandwidth usage. This allowed users to still enjoy some of their favourite content without necessarily depleting their data plan.

The importance of being able to grow and engage your audience is crucial for companies, especially when talking to advertisers. Having returning individual broadcasters and levels of viewership means winning your third party: advertisers. With large corporations jumping into esports, from FanDuel to Turner Broadcasting to ESPN, advertisers are cluing in on this new, soon-not niche market. As the big names clue in, everyone holds out; hoping for their big break, akin to Twitch TV, or to maintain territory, notably YouTube Gaming (and YouTube Music). Despite the amount of money raised from these companies, including Hitbox’s new funding round from Wargaming or Azubu’s new debt-financing of 59 million from Sapinda, competitors need to consider how best to distinguish themselves from each other. Hitbox, for example, expanded their revenue share program to all live-streamers whereas Azubu opted for customizable modules to better personalize a user’s channel with key information – both companies empower or incentivize the broadcaster, but don’t do enough for the viewer. This is where they consider exclusive programming as a bid to attract viewers. But exclusive programming should be considered a compliment (not a complement) to your product. That is to say, it is better to use exclusive programming, whether it is an event or individual talent, to showcase what your product has to offer. For example, Azubu used a featured called “Live Overlay Statistics” during their LCS World’s broadcast, an event that was on both Twitch, Youtube Gaming and Azubu. The response about it were positive, highlighting Azubu’s uniqueness and even spurring discovery of its other great feature: “Live Rewind”. This kind of momentum can lead a platform to stride past its competitors, so long as they keep the momentum up. That momentum can be in the form of any opportunity: showmatches, Q&A with a developer for a game launched (either indie or AAA), exclusive surrounding content of an event or receiving item drops from watching an epic play if you join your game account with your broadcasting account. It’s a question of leveraging your relationships with other company entities and providing something unique for a curious audience. These incentive-based invitations need to be unique, but also consistent to remind an audience. What can a platform do to better fulfill a viewer’s desire to be there, whether playing a game or attending an event? What can a live-streaming service facilitate to broadcasters so they can be a part of this moment?

Taking advantage of what makes live-streaming unique: being immediate and thus enabling engagement between broadcaster and viewer – empowering both – will lead a platform above others and ultimately win the streaming war. As esports and gaming moulds itself as content to play and watch, the platforms to establish themselves as networks will become the default places for gaming entertainment.