Streaming TV is undoubtedly going to play an integral role in the future of premium content consumption, with cord-cutters and cord-nevers making up 31% of the U.S. population. And with many people stuck at home quarantining due to COVID-19, this reliance on OTT is seeing an additional surge – viewing sessions on Vizio’s connected-TV platform rose 40%.
But with consumers starting to experience subscription fatigue due to growing bundle size – dominated by massive SVOD services like Netflix, HBO, Amazon, and Disney – there is a huge opportunity for the curation of ad-supported, longtail niche content channels.
This strategy is already being executed by OTT players like Pluto TV, a free ad-supported streaming TV (FAST) service, that recently launched 11 free linear channels with over 2,000 hours of Spanish TV programming. And the strategy is working. Just ask Pluto TV, who has amassed more than 18 million monthly viewers and was acquired for $340 million last year by Viacom.
So, this idea of curating channel clusters is already a proven formula for certain demographics, but it still has the potential to be applied across verticals. This includes everything from make-up tutorials and tik-tok dance trends, to explosive industries like esports.
The Esports (and Livestreaming) Phenomenon
While the esports industry has been around for decades, it just recently gained mainstream recognition. Now, the industry is a rocket ship, exceeding $1 billion in global revenues, with the prize pool for some tournaments as high as $100 million. The community is also dedicated, with fans traveling around the world to see their favorite athletes compete in their favorite games. And every tournament garners millions of hours streamed with dozens of countries tuning in.
The appetite for livestreamed content is exactly what ignited the esports rocket ship, with millions of fans watching gamers like Ninja, Tfou, and shroud on the daily. This livestreaming content is the backbone of platforms like Twitch and Mixer, and when it’s paired with the massive esports tournaments across a variety of titles the library for an esports OTT is born.
But the TV screen is a premium viewing experience. So although the billions of hours of content can provide a solid infrastructure, it’s still going to take a holistic approach to build out the esports OTT application the community wants.
Building Out The Premium Pipeline
With billions of hours of content including footage from massive global events, it’s easy to just wipe your hands and call it a day. But the esports community is also hungry for premium content. This has already been proven with mainstream networks like NBC, who recently announced they are making a sitcom based on esports. Additionally, FaZe Clan is developing a show for Quibi where viewers compete for a shot at joining the team, and esports influencer Goldenboy is hosting a “Pimp My Gaming Rig” show called LVL UP on IGTV. But in order to really build-out an esports OTT destination, premium content must expand into esports affinities.
Adjacent to esports, there are a number of subcultures that resonate with the fanbase like fashion, technology, art, music, comic-con and more. And these subcultures are going to be an essential part of the content offering for emerging esports OTT destinations, as they expand beyond anyone “vertical” to create an overarching cultural and lifestyle experience. This also opens up doors for non-endemic brands, that can start to build relationships with the esports community. Just look at Louis Vuitton’s partnership with League of Legends, to insert luxury in-game skins.
Niche Content Is A Win-Win-Win
While the majority of consumer dollars traditionally dedicated to cable have been reallocated to the SVOD giants, many people are still trying to fill a hole in their viewing experience. And it’s going to take a content slate that is curated for their specific interests, not blanket content created for the majority. And when it comes to esports, there needs to be a balanced focus on both tournament gameplay and culture/lifestyle content.
This sort of niche content is a win-win-win for consumers, publishers, and advertisers. Consumers get the free, curated experience they crave. Advertisers get the audiences they want, with the content they are familiar with and comfortable with. And publishers get the CPMs they deserve for the thoughtful construction of a verticalized OTT channel infrastructure.