Facebook Embraces Esports in Its Video Strategy Shift -- Update
May 18 2017 - 5:25PM
Dow Jones News
By Sarah E. Needleman and Deepa Seetharaman
Facebook Inc. is paying professional videogame teams and others
in the esports industry to post videos on the social network, part
of a shift in strategy to deliver more-premium programming to the
company's nearly two billion monthly users.
Earlier this year, Facebook signed contracts with five teams to
publish live and on-demand video of players practicing or competing
at esports. In addition, Facebook on Thursday announced a deal with
ESL, a global organizer of esports contests, to broadcast matches,
player interviews and more.
Separately, Major League Baseball Commissioner Rob Manfred on
Thursday announced the league's agreement with Facebook to air one
game a week on the platform, without regional blackouts. The deal
starts Friday night, with a matchup between the Colorado Rockies
and Cincinnati Reds.
The latest moves reflect Facebook's new interest in bringing
TV-like programming from sports, gaming and other genres to its
platform. This shift comes as many publishers are seeing lackluster
viewership for their live videos on the platform. Facebook also is
grappling with how to censor violent moments and other dark content
streamed live to the site.
People scrolling through Facebook's news feed are more likely to
watch polished videos with audio turned on, making them potentially
lucrative vehicles for ads, analysts say. Such content increasingly
will appear in news feeds over off-the-cuff live videos from users,
as Facebook wants to be seen as a hub for long-form video.
In retooling its video strategy, Facebook revised some of its
live-streaming contracts with publishers to emphasize on-demand
video, according to people familiar with the matter. Recode earlier
reported on Facebook revising its video contracts.
Facebook also is interested in streaming more traditional sports
events. In March, it struck a deal to stream certain Major League
Soccer games. Thursday's agreement with the MLB to stream 20 games
this season is the latest example of those efforts. "It's really
important for us in terms of experimenting with a new partner in
this area," Mr. Manfred said at the league's quarterly owners'
meetings in New York on Thursday.
Esports marries Facebook's investments in sports and gaming.
Under the deals signed with Facebook, esports partners must
produce a minimum number of hours of video for the social network,
and in most cases the partners are allowed to simultaneously
publish to rival platforms such as Amazon.com Inc.'s Twitch.
Financial terms weren't disclosed.
The genre has a built-in fan base of millions who watch videos
mainly on Twitch and Alphabet Inc.'s YouTube. In 2016, people
watched 9.6 billion hours of live-streamed esports and other
videogame content on those platforms, according to SuperData
Research. The industry tracker projects that number to climb to
11.4 billion hours this year.
Team Dignitas, an esports squad majority owned by the National
Basketball Association's Philadelphia 76ers, joined Facebook's paid
content program last month after an exclusive contract it had with
Twitch ended.
Echo Fox, an esports team co-founded nearly two years ago by
former basketball star Rick Fox, also recently signed a deal with
Facebook, which gave the team advice on how to reach viewers and
generate ad revenue.
Amy Carrera, a 40-year-old marketing professional in Kingman,
Ariz., tunes in to Twitch because she can easily find her favorite
games played live. Facebook might be more attractive to her, she
said, if it had a dedicated section for game streams.
Facebook is hoping more esports videos will help it develop such
an ecosystem. The company plans to apply what it learns from its
initial esports partners to develop new features for game
broadcasters, said Leo Olebe, Facebook's director of global games
partnerships.
--Jared Diamond contributed to this article.
Write to Sarah E. Needleman at sarah.needleman@wsj.com and Deepa
Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
May 18, 2017 17:10 ET (21:10 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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