FN Media Group Presents Safehaven.com Market Commentary
NEW YORK, Dec. 17, 2019 /PRNewswire/ -- Right now a NEW streaming war is taking place. It's one that's being ignored by anyone over the age of 18. Why? There's a quiet revolution happening in the media world. Mentioned in today's commentary includes: Verizon (NYSE:VZ), Telus Corporation (NYSE:TU), Alibaba (NYSE:BABA), International Game Technology (NYSE: IGT), MGM Grand (NYSE:MGM).
Now, competition for streaming market share is fierce. Nearly every media company, from Comcast to Disney, has a stake in the "streaming war."
Why? The network effect. Streaming services find a niche and grow their audience, quickly.
Torque has something the many other streaming services haven't secured yet: a huge reach into one of the hottest NEW streaming sectors, esports. Right now, esports is just starting to come up, but many believe that it is set to grow even larger.
Its corner is sports and video games—two sectors that dwarf the video distribution market. The NFL is worth $63 billion. The NBA is worth at least $30 billion, the average team is worth $1.9 billion. Premier League soccer is worth $10.2 billion.
Now, compare that to video games
Torque is in a unique position to leverage video streaming expertise for esports, an up-and-coming sector that could potentially explode in size. No other company can match its command of user data. And no other company stands where Torque (GAME.V , MLLLD) stands: at the crossroads of sports, games, and on-line streaming.
Here's what you need to know:
#1 Scale Quickly
The secret to success in streaming is…scaling. That was Netflix's big move. The company bought up the rights to a ton of great content—The Office, Friends, hundreds of popular TV-shows and movies—and used the revenue generated from monthly subscriptions to grow fast.
From only 900 titles, the company used an algorithm-driven data model to expand to more than 70,000 different "microgenres." It leveraged user data—the viewing habits of its users, their particular tastes, as well as personal information like age and gender—to target content.
The success turned Netflix into a billion-dollar company. In 2017, the company brought in $11 billion in revenue. Netflix is now a major film and TV producer—in 2018 it published more than 80 original films. Netflix is also international—it has 58 million subscribers in the US and 78.5 million more in international markets. Other streaming services are trying to catch up.
Disney recently rolled out its own service, Disney+, in November 2019. Like Netflix, it hopes to scale quickly. Disney+ will include most Disney properties—including a few it pulled from Netflix—as well as new original content. From zero, Disney+ hopes to have 80 million subscribers by 2024.
The trend is so big, even telecom providers are looking to dig their claws into this new revolution. Verizon (NYSE: VZ) is engaged in all aspects of communications, information and wireless services. With Verizon's Fios Live TV, you can stream On Demand and select live TV titles on your compatible devices including mobile. All you have to do is log in with your password and username on a broadband connection.
Canada's Telus Corporation (NYSE: TU), serving over 8 million Canadians from coast to coast, is also in on the race. Though it's not producing its own content, it is carving out its own path in the industry thanks to its Optik TV App which allows customers to stream on any device.
AT&T, Comcast, Apple— are all diving into the streaming war with their own platforms as well. These big firms are throwing billions into the fight, hoping to claw away some market share from Netflix. But there's one big sector they're all missing.
That's where Torque Esports (GAME.V, MLLLD) comes in. It's already making key acquisitions that will strengthen its position. But with a new mega-merger with Tom Rogers, the media legend behind CNBC, MSNBC and more, right around the corner…Torque is looking like a true competitor in the new media revolution.
#2 Get in the Game
The secret to Torque Esports is right there in the name. Esports refers to video game sporting events—live competitions that pit gamers against one another. Sound weird? Maybe. But take a look at the numbers.
Video games, as an industry, are already bigger than Hollywood—the sector earned $131 billion in revenue in 2018. Thanks to mobile games and the explosive international success of titles like Fortnite and Overwatch, video games are set to reach $300 billion in revenues by 2025 according to some analysts.
Video games are popular, addictive, and hold international appeal—the biggest titles, like Call of Duty, cost $100 million to produce and can generate four times as much in revenue. And now, video games have turned into a spectator sport. A study from early 2019 estimated earnings from esports events will top $1 billion this year.
Audiences for these events have exploded, thanks to streaming platforms like Twitch, which broadcast the events live on-line. In 2017, some 335 million people tuned in to these events—and that number could reach 645 million by 2022. And the money is pouring in.
Even Chinese tech giant Alibaba (NYSE: BABA) is jumping on board. According to Alibaba global esports director Jason Fung, "Alibaba has given us a five-year time frame to figure out what works in esports and to seek out business models that make sense. We've had that time frame to start becoming profitable and break even." Not only are tech giants betting big on this burgeoning sector, major gambling players are looking to cash in too.
In July, International Game Technology (NYSE: IGT) announced a deal with popular sports betting platform FanDuel. IGT will bring FanDuel's services to its existing platforms in markets across fifteen states. FanDuel made headlines in November for becoming the first online sportsbook to accept League of Legends World Championship bets in the United States.
Though IGT was the first online sportsbook to accept bets, MGM Grand (NYSE: MGM) was already pioneering the trend in Vegas. Back in 2017, the company partnered with esports betting platform Unikrn to host its own event in the LEVEL UP lounge.
Esports will attract 300 million viewers in the next few years, according to Goldman, "on par with NFL viewership." And Torque has an edge on one segment of this market.
#3 User Value
What's the most valuable commodity on earth? Is it oil? Gold? Nope. It's data. Specifically, user data—information tied to a specific individual's online habits, from shopping patterns to viewing habits to personal information.
All of that data is precious to companies hoping to hawk their wares on-line to consumers, including the millions tuning in to esports events.
Advertising and brand investment will make up the biggest chunk of revenue from esports. This year, esports will bring in $906 million in revenue, and advertising for esports events was the centerpiece of a Advertising Week, a gathering of thousands of advertising professionals.
Everyone knows there's money to be made in esports. The key is getting to consumers. And who are those consumers? Typical video gamers are young, and audiences for esports events are overwhelmingly 18-40 years of age, typically with disposable income.
According to one market research firm, esports fans tend to be well-off, professionals with purchasing power, with high levels of enthusiasm.
They're drawn to the video game events out of strong interest, which means their likely to not click away out of boredom—it also means they won't skip the ads, for fear of losing a moment of the e-sport excitement. The user data for esports attendees is priceless for advertisers.
But ad buyers are in a pickle. They can't get access to accurate data—the industry is in its infancy, and advertisers are having trouble finding the right metrics. And Torque Esports (GAME.V, MLLLD) has developed a service that makes it akin to the "Nielsen of Gaming."
#4 The Data Edge
Torque's secret weapon: a service that gathers and measures data relating to esports consumers. It's called Stream Hatchet, and here's how it works:
A data analytics/intelligence company under the Torque umbrella, Stream Hatchet focuses on gathering analytics on esports, allowing clients to identify influences and trends within the esports sector.
Torque has gained a major advantage in what could potentially become the most lucrative sector in esports. It is the gatekeeper to monetization and optimization in one of the world's fastest growing industries. And right now, there are few other companies that can offer this kind of service.
Ad-buyers are desperate to obtain useable consumer data for esports advertising. And Stream Hatchet can provide that, and so much more.
Torque (GAME.V, MLLLD) has unique services. It's on the cusp of breaking into the esports streaming sector, a $3 billion market that could potentially grow big, and grow fast.
#5 The Sky Is The Limit
Torque Esports is small potatoes—a tiny $5 million company, with a few assets, including Stream Hatchet, a bespoke esports competition, and a video game development company.
It's attracting major attention however, with professional racers offering endorsements, an expanding YouTube esports channel, and key presentations at major esports conferences. But the opportunity it's grasping could be worth far, far more.
By. Ian Jenkins
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