Bringing eSports TV broadcasts to France

A short case study on OnGameNet and the French market

Introduction

This report (for academic purposes only) aims to prepare the entering of the Korean eSports TV channel OnGameNet (also known as OGN) in the French market in 2016.

First of all, a quick definition of eSports may be useful for the rest of this report: eSports, also known as electronic sports, is the term defining video gaming at a competitive level. eSports exist in many disciplines, especially in First-Person Shooter games (eg. Counter-Strike), Battle Arenas (including League of Legends, the most popular eSports discipline nowadays), Real-Time Strategy (including StarCraft, considered by many as the first “real” eSports franchise) and Sports games (eg. FIFA, Trackmania). They are characterized by at least 6 hours of training per day by players in competitive teams, who are paid five or six-figure incomes annually by their roster, not including prize pools from tournament (the record for the moment is held by The International tournament of DOTA2, a competitor of League of Legends, with 12 million dollars distributed to the winning 5-player team in 2014).

A recent League of Legends tournament was watched by a total of 32 million people, with 8 million of those watching the event live. To put that in perspective, the highest Youtube stream of the 2012 Olympics only ever reached 500,000 concurrent viewers. The gaming tournament actually tied in viewer numbers with Felix Baumgartner’s epic jump from the edge of space. In 2014, the American TV channel ESPN streamed a select number of eSports tournaments as part of a new partnership with eSports organization MLG (Major League Gaming).

OnGameNet is a South Korean cable television channel specializing in video game-related information and matches. South Korea has always been a leader in the world of eSports, due to its governmental programmes of Internet penetration for the whole population — most successful teams are Korean, especially in the Blizzard franchise StarCraft and StarCraft 2, the first globally-watched eSports discipline. In 2012, OnGameNet extends to include League of Legends in its broadcasting programmes. The channel livestreams tournaments, but also hosts its own StarCraft 2 and League of Legends international tournaments.

Market data

Between October 2012 and March 2013, 66.5% of the French population (31.7 million people) declared that they have played video games. The top Youtube channel in the world is PewDiePie, a video gamer who streams his games. As for eSports, French people love it: in May 2014, all places for the League of Legends All-Star finals, taking place at the Zénith de la Villette (Paris), were sold in under four hours. A world-scale StarCraft II tournament was also organized at the Paris Trianon by the Ogaming TV channel, which we will talk about in more detail further in this report — all places were sold in less than twenty minutes.

For the League of Legends World Cup final in 2014, the tournament was streamed live all morning in 3 Gaumont Pathé cinemas in France (Paris, Marseille and Lyon) — all 3 venues were full. This was the first partnership between French mainstream venues and eSports organizations.
In France, 91% of eSports enthusiasts spend money on games, compared to 65% of all gamers. This represents not only a huge potential market, as we have seen at the beginning of this “market data” part, but also a huge financial potential; eSports enthusiasts are ready to spend for what they feel passionate about.

In France, there are two main competition channels for eSports on TV:

1. GameOne is a French TV channel which exists since 1998. GameOne was part of the CanalSat group until 2003 and was then bought by MTV. Even though GameOne was known as « the video gaming TV channel » until 2006, it radically change its focus that year to become « the digital generation’s TV channel », with only a couple of videogame-dedicated shows and the rest being Japanese and Korean music, Japanese animes, extreme sports, movies…
2. The Internet is, of course, the main competitor for any videogame-focused TV channel in France. People who play and watch eSports own a computer, have access to the Internet, and are used to watching tournaments commented by their favourite streamers and hosts on their dedicated websites. The main competitors in this type of streaming are Ogaming TV, aAa (against All authority), Millenium and Eclypsia (the three latter being professional teams with a streaming/casting branch and Ogaming TV having no player roster).
3. Twitch.tv is « a service that allows gamers to stream their video game play for others to watch online ». This website was bought for around 1 billion dollars by Amazon in August 2014; it is the fourth-largest source for US Internet traffic (better-ranked than Facebook, for instance). What is even more impressive with Twitch.tv is that according to the company, 58% of Twitch users spend more than 20 hours per week on the website. Most large-scale casters, including the ones that have their own website (Ogaming TV, Millenium and Eclypsia), live cast events both on their website and their Twitch.tv channel.

One trend that must be noted is the emergence of specialized bars, called « BarCrafts » as a contraction of Bar and StarCraft, the game that popularized eSports in Korea and all over the world. In Paris, the main BarCraft is the Meltdown (now a successful franchise with 13 venues in all of Europe, and 5 more to open in 2015 in France); in Lyon, it is the ReSpawn, near Gare de Vaise.

Until recently, most video gaming casting was posted on Youtube after they were recorded; since the rise of Twitch.tv in 2013, live streams have become much more popular and are now more viewed (especially for large-scale events) than on-demand videos.

Interviewing prospective customers

The key needs of customers seem to be very close to those of any sports-related TV channel: variety, quality content, and live coverage of major competitive events.

Out of the 20 people I interviewed, 12 used Twitch.tv channels to livestream events — they generally do it either alone at their place (while playing or working as background noise, or with more attention in the evening or the week-ends when they want to relax), or with friends. They either:

• invite friends or go to a friend’s place for important live tournaments, eating in front of a larger screen (just as other people would do for the Superbowl or FIFA World Cup)
• watch them in more public spaces (typically, for the Centrale Lyon students, during the weekly game night, while eating pizza and thus not wanting to smudge the computer’s keyboard), for smaller streams which are not linked to major events

6 persons prefer to watch the livestreams of professional casters on other websites than Twitch.tv. The visited websites were Ogaming TV, Millenium and Eclypsia; those 3 websites also broadcast their shows live on Twitch.tv, but some people felt like they had some special and useful features. For instance, one streamer told me that she watches the Eclypsia channel exclusively because she wants to thank the casters by clicking on the website’s advertising and giving the website one extra visitor. The behaviour of these people is the same as for the Twitch.tv aficionados.

Finally, 2 people I interviewed go to physical places to watch live event and don’t watch eSports on other occasions; one has attended the 2014 World Cup final in the Lyon Vaise Gaumont Pathé venue and doesn’t usually watch livestreams, the other regularly goes to the Lyon Respawn BarCraft.

“an eSports channel would not only cast League of Legends”

There were a lot of misunderstandings throughout the interviews: most people I have interviewed are League of Legends enthusiasts (League of Legends being the top eSports currently) and I often had to remind them that an eSports channel would not only cast League of Legends. This was an answer to their most common issue: that there would not be enough quality content to fill a whole schedule, and that League of Legends would eventually be replaced by another competing game — this game having itself partly accelerated the decline StarCraft II.

The best part that was perceived about the TV channel proposal was that most people I interviewed do not have an extra-fast Internet connection, and are therefore subject to lags and much lower image quality. A cable channel would solve this issue, which is the most frustrating for them. One person I interviewed (the Respawn visitor) was really interested by the idea, since the setup in a public space or a bar/pub is much easier with a TV than with a screen connected to a computer with high quality Internet access.

The interviewed people had mitigated opinions on the subject of social interactions. Some of them said they would miss the chat, others rejoiced at this idea, since the chats are often full of spammers and annoying or rude comments that don’t really bring any added value to the stream. Another advantage of the offer is large tournaments, which would give people the possibility to gather together in front of a large screen to watch high-quality events, in Superbowl-like fashion. One person said: « I feel that this would encourage more friends to meet up and watch streams and games together as opposed to by themselves, like those of us who watch football matches together. »

Another controversial issue was variety, and more generally, the control that the users hold on TV broadcasts. On one side, one person told me: « The only reason I like to watch TV is because I hate having to choose what I want to watch. I like that the TV picks for me ». On the other hand, someone else said: « The cool thing about the Internet is that I choose what I watch ». Another person yet sided with the first, albeit for different reasons: this man mostly watches League of Legends and said that an eSports-related TV channel would be a great opportunity to discover new disciplines he doesn’t usually watch. Finally, many interviewed persons agreed that they weren’t used to watching TV ads anymore since they have taken up the habit of watching on computers, where ads can easily be skipped. This can be a problem, since TV channels require very important financial investments.

There was, however, hostility towards the chosen medium. Many of the people I interviewed are students (as are many eSports enthusiasts), and they do not own a TV, having entirely switched to online watching. One told me that for her, the only reason people want an eSports TV channel is because « they think it makes them legitimate », obviously not interested by the idea.

« they think it makes them legitimate »

Another person feels like the offer isn’t for him, but rather to broaden the audience and « appear mainstream », while opening new revenue streams (sponsorships, easier access, advertising, etc.): he feels like there is an important potential for the channel. He adds that he would definitely watch this channel if OnGameNet launched in France, especially if he could watch the TV channel online when on the go, but that for more specific game-streaming desires, he would still favour Twitch.

A final issue for one Centrale Lyon student was that he would always rather play than watch streams, whether they be on TV or on the Internet. Another one, when told about this, answered that the same argument could be made about football and any other sport: why watch TV when you can get a ball and play outside?

In general, therefore, the people I have interviewed were interested by the idea, even though they agree on the fact that TV will not replace Internet-based streams for them, only complement it.

Entering the market?

From the results of the interviews, I think the TV channel should provide quality content about different games, in different ways: live coverage of major eSports event, of course, but also things that will differentiate the TV channel from “normal” streams online, for instance shows about more historical or tactical aspects of eSports, focusing on general knowledge and culture rather than only commenting gaming matches. This is where the TV channel will get its added value.

Since a TV channel hardly has a choice on the price of cable subscriptions, I will talk quickly about revenue streams. If we try and limit advertising as much as possible and do not charge extra for the channel subscription, the best revenue stream would be sponsorship by brands — instead of advertising for precise time slots, there would be more product placement or banners during the shows, which do not stop the stream while still providing value to the sponsors.

This TV channel should be made available nationwide, but mostly, it should also stream on the Internet or via a dedicated app. With this, viewers could tune in to the TV for live events and whenever they want to and the audience could be broadened. But they could also go on the TV channel’s website (or even its Twitch.tv dedicated channel) to access content on the go from their phone or computer or to watch the stream without having to change their long-nurtured Internet habits.

Not many of the people I have interviewed are familiar with OnGameNet, and those who are remain on the image it had 5 or 6 years ago, when the TV channel only broadcasted StarCraft games and information, which are in harsh decline nowadays. This is why I do not think that keeping the original OnGameNet in France would be a great idea. A new channel, clearly distinct from any existing one, could be a great opportunity. Choosing to capitalize on the success of some already famous and recognized experts (for instance OGaming TV, Eclypsia or Millenium) and offering them a TV channel while keeping most of the content and staff could be a viable solution to start with a solid customer base and maximize the success of the channel.

For any more information about eSports or about this case study (appendix, sources), or just to talk about it, please feel free to contact me on Twitter (lexanesirac) or by email (lexane-sirac at edu.em-lyon.com)!