Well…. I am a little bored at the moment. So what better thing to do than write a little blog based on the reddit thread re: chanmanv’s show climbing the ladder and Mrs Biscuits new team.
First things first as usual, I commend all parties involved in attempting to create nice conditions in e-sports. Its good to see someone do something about it, rather than just sit and whine.
But some of the facts given in the video are a little wrong. I won’t go over which ones, but it all comes down to things aren’t as bad as being reported.
Anyway, people are questioning why starcraft players aren’t getting paid bucket loads of cash, or suitcases if you don’t like buckets. The truth is, its because the community doesn’t provide a big enough return to justify the spending.
Its a bit of a painful truth, but its the truth.
FXOpen itself gets a somewhat break even return on the investment, since we are not directly related to e-sports. We have managed to monetize in a different way via SEO and reputation changes. Its a good thing, but slowly that aspect of return will disappear as everything is already set up. So what next? We recently went sponsor hunting, and the majority of sponsors are willing to sponsor at most USD2000 per month with huge lists of conditions for that money to provide them a return.
There are exceptions of course but its justified to have such a low amount of sponsorship. USD24000 per year is probably at best a break even investment for the sponsors providing all conditions of the contract are met (unless the sponsors are weird and have huge requirements). And the reason its justified is the community.
The community itself has shown huge amounts of hesitation towards paying for something. Now, we all need mice and keyboards, which would be why all the peripheral sponsorships exist, but companies like Razer, steelseries, zowie etc, aren’t exactly multi billion dollar companies. So they can’t open their pockets up to the world because there will be a point where they are spending more than they are making. The next level of sponsors are monster, NOS, LG etc. I can’t reveal what I know, but the amounts that they sponsor are not huge albeit they are big for e-sports, they are nothing like championship darts.
After this, we go higher and there is no one…. Literally…. LG could be considered this level, but the amount of money they are sponsoring isn’t befitting to their company value. And the community is now asking why?
Well, how many of you have gone out and bought an LG TV or dishwasher or monitor because they sponsor IM? Maybe 20 of you? Its not worth it for LG to sponsor the money they are capable of sponsoring, at least not right now. So why would they?
Sponsors who are not directly related to e-sports don’t care about the ‘passion’ they only care about the money. What do we get out of it? This is the most common question asked at any sponsorship meeting. And truth be known to companies who aren’t a requirement for game playing, they will get very little.
So whats next for e-sports? Well, you are going to start getting charged for the content. Anyone who thinks the content being made should be considered free because “twitch lets them play ads thats enough” should probably start researching what kind of money actually can come out of that and thats no attack on twitch, they do a great job and are doing a great job at trying to provide a service to the community that allows things to last longer and grow.
So its now time that the community start paying, even if its a dollar, for the content. If the content doesn’t provide a return to the creator, they will soon start to disappear unless they are unemployed and doing it from their home basement. Because everyone needs to earn a living in some way and e-sports may not be it until the community can start to appreciate whats being given to them.
Now what I don’t agree with, is charging 20 bucks to watch an event for a weekend. E-sports is not the armani of the competitive world. Its more like the walmart clothing department. Its one of those things where instead of calling yourself Giorgio and charging 500 bucks for a product and making a sale a month, you should be calling yourself “discount store” and selling your product for 2 bucks a month and making 50000 sales.
No offence to MLG, but whoever came up with their pricing probably doesn’t know the community very well.
You can’t call the PPV model a failure if it was set up poorly. The purchasing power for streams/events of the community would be no more than 10 bucks a month and to take that 10 bucks from the community is like cutting someones arm off. So why not only make it a fraction of that 10 bucks and make everyone give you their hand? Sometimes peoples actions don’t make any sense at all.
Anyway, its easy to cry about why players aren’t making millions….. Infact when I first entered running an organisation in e-sports I cried about the same thing. But there is no justification, given the communities spending habits, to pay huge salaries to players.
As I mentioned in my post on reddit, EG is kind of an exception because they have some weird voodoo over their fanboys (jokes) and they get alot of sales.. No one else can do it like them right now.
So where to next? Well…. If we don’t start shoveling out our coins (yes coins, not bank notes) then we won’t see any further growth. The sponsorship market is very competitive, everyone is chasing the same sponsors with a relatively similar product, so there isn’t enough money to spread around to rely on sponsorships. Merchandise is a maybe, but there are not that many people out there able to find reliable cost effective suppliers to make the margin worth it. I did find a good supplier for this, but then he packed up shop. Now its about finding someone trust worthy. So the next step does seem to be somehow getting the community to actually fund the community without hurting their lifestyle. Its relatively easy, if you are under 15 check your sofa cushions, I am pretty sure you can find a dollar there to buy PPV for a month and theres very little else you can buy for that dollar maybe a pack of gum? But hey, we can always floss.
Its sunday afternoon and my boredom may not provide clear thought so apologise for the jumble.
Save your coins now lads and ladettes!
You can follow me on twitter! http://www.twitter.com/gosutrading
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