Networks take note: fans watched six billion hours of esports content in 2016

Traditional, once a sure bet in the TV world, may be beginning to drag on profits for networks, but esports is heading in the other direction.

According to a new report from IHS Markit, fans watched six billion hours of esports content in 2016, up 19% from 2015. The report also predicts that the category will be command $1 billion in advertising revenue by 2021, nearly quadrupling the $280 million in revenue in 2016.

“The rise of esports provides some valuable lessons for channels and programmers more broadly,” said Dan Cryan, senior director, IHS Markit. “In particular, it demonstrates the value of aggregating audiences globally, rather than the more country-specific approach that defined much of the traditional TV business. Esports video is a perfect example of the increasingly complicated competitive landscape in TV. In the ‘old world,’ broadcasters would compete with broadcasters and pay TV operators would compete with pay TV operators. Today, an emerging class of new entrants competes for audiences driven by objectives and business models that are orthogonal to traditional TV. This is not just online channels taking a traditional business model and moving it online, this is something new. Publishers, for example, deliver esports video because it helps their other commercial interests rather than having content monetization as their primary focus. This sort of competitive diversification is set to become more common and spread to other genres with time.”

China accounted for 57% of all esports viewing last year (11.1 billion streams), while North America, the second largest market, drove 2.7 billion streams.

Networks like Turner (with ELEAGUE) have invested heavily in esports, and its early entry into the space will likely pay off. Other networks will soon follow, and what was once niche and dismissed by executives will likely become a major profit center.