Dive Brief:
- Major League Baseball is providing Tencent Holdings no less than $300 million through 2023 for the exclusive rights to live stream League of Legends events, as reported by The Wall Street Journal.
- The deal was negotiated by a unit of the MLB Advanced Media group that includes Disney and the National Hockey League as partners and is called BAMTech. It's planning on launching an app for the streaming content and reportedly will also distribute it via Amazon’s Twitch.
- Revenues will come from ads and sponsorships and will be shared past a $300 million threshold.
Dive Insight:
The scope of this deal points out how attractive live streaming media has become, and also the marketplace value in e-sports. For marketers, e-sports should be intriguing because of its natural fit and draw for an online audience. The Journal reported that in October more than 43 million people watched an event online that was physically held at the L.A. Staples Center with a crowd of only 15,000.
As media companies and sports league continue to struggle with monetizing their traditional content in the digital world, deals such as the one between MLB and Tencent point to a growing willingness to experiment in an attempt to attract advertisers. Twitter recently netted big advertisers for an original programming strategy with the NBA.
Live streaming video is likely to gain in marketing value as more people become cord cutters and otherwise stop watching linear TV, a trend that has been particularly pronounced in the sports category this fall, with ESPN experiencing significant subscription declines. Up until very recently an audience – particularly for destination viewing events like sports – could only be found on linear TV. That has been changing with increasing streaming options, and the deal between the MLB and Tencent is an indicator of the future for video content and advertising.
