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Bands, Brands & Fans – It’s all about getting closer…

A few years ago, we witnessed the start of some major changes in the music industry, with traditional revenues from record sales taking a big blow due to an increase in piracy. This coincided with the general public’s perceived value of music diminishing with the record labels continuing to exploit their assets with very short term targets in mind, licensing music for the likes of cover-mounts to the media industry, earning income, spiking sales for newspapers and magazines but further reducing the consumer’s perception around the value of music (which was ultimately being offered to them for free).

Some high profile artists benefited from this at the time, including the likes of Prince who released his ‘Planet Earth’ album exclusively via The Mail on Sunday. This earned Prince substantial revenues. It provided marketing for his 21-night performance at The O2, London and sold a lot of newspapers, so many would argue was a big success. It did, however, contribute towards the longer-term psychological perception amongst the consumer that music has been devalued.

It was at this point that I started to understand the fact that it was the job of both artists and the labels surrounding them to start re-thinking about how to add value back to the album format and demonstrate a reason for the consumer to continue purchasing in the future. It feels natural for artists and their labels to start packaging all of their assets into one deliverable (an app) with the aim of connecting with their fans on a deeper level, owning a bigger part of the relationship with them. The depth of relationship between artists and fans for me has always been the key to success.The rise of Spotify, followed by the multitude of other streaming businesses then created a distraction, tackled piracy and actually incentivised consumer spend, albeit reduced. The real value in music today, however, is primarily in the live business (concerts), but there are various attempts taking place to breathe life back into music beyond just experiential.

It seems the subject matter of how artists and their labels should be pumping value back into their product is heating up. Clearly, deepening the relationship with their fans seems to be becoming more understood amongst artists, with a number of technology players now moving into this space. Until now there has been little focus in the media about this, with most still focused on the battle of the streaming businesses (Spotify, Apple, Google, Deezer, Amazon etc).

If a fan wants to know what Beyoncé wore last night, they check Instagram. If a fan wants to know where Ed Sheeran is performing next, they check Twitter (as long as he’s not decided to take a ‘time out’). If a fan wants to know what Ariana Grande has been up to today, they are likely to watch her Snapchat story. Social Media has brought artists and fans closer together than ever before. It has solidified the artist and fan relationship, offering access never previously seen before. These relationships via social networks offer the ability for artists (and their partners) to promote themselves, sell music, tickets and merchandise. It also provides instant feedback whether it be about newly released music or any other promotional activities. Importantly, it is this relationship, combined with artist-generated content (music, film, games, etc) that can be extremely attractive and powerful.

When Björk launched ‘Biophilia’ a few years ago, she offered her fans an entire suite of content – much more than just music. She successfully continued to build that ever-so-important connection with her fans, giving them much more than they expected, with lots to talk about and engage with.

Since then, a number of artists have attempted to enter this space. A few businesses from the tech world have also moved into the ‘Artist & Fan’ relationship space – their approach being to enhance the overall fan experience, whilst providing insight and learnings about their fans back to the artists and their representatives.

These start-ups include the likes of: Gigrev, Lionshare Media and Disciple Media. BuddyBounce was another great business very much in this space, recently selling to Crowdmix which was due for launch later this year but unfortunately went into administration earlier this month, prior to its official launch. Additionally, Supapass is a new multi-artist platform that has recently come onto the scene, offering not just single artist relationships but the opportunity for fans to engage with a multitude of their favourite artists. An interesting one to watch…

The idea is that fans subscribe to an artist/label channel (costing approx £1 per month). The artists and their rightsholders then earn a substantial % of the revenue share from their fan subscriptions. One generally finds with fan-based marketing that there is always a top-tier core fan who will traditionally spend on artist product and this will specifically appeal to those. By offering multi-artist content, SupaPass are spreading the risk and potentially offering greater impact for the platform. It feels like it makes sense.

It is these artist-to-consumer platforms that will not only ensure continued growth and depth of relationship between artists and their fans, but could also potentially offer a very interesting space for brands to engage. According to the Cassandra Report, Millennials, in particular, expect brands to offer more than just their product or service, and if a brand can be seen to be offering a closer relationship between fans and an artist, the credibility and love for that brand could very easily dramatically improve. Additionally, the learnings and data available could really help not only the artist, but also brands, understand how to interact and behave with these fans, potentially offering a three-way win-win(-win) symbiotic relationship for band, brand and fan.

To conclude, the music industry is continuing to change rapidly. There are no rules and an array of interesting opportunities for brands (as well as artists) to tap into, offering previously impossible access to potentially long-term relationships with fans. The ‘Artist & Fan’ relationship is the ‘Holy Grail’ within the music industry. For a brand to be a critical part of that could be an extremely powerful space to occupy.

Making the Most of the eSports Opportunity

From left to right: James Dean from ESL UK, Jonathan Hall from Gfinity & Chris Mead from Twitch

This year’s The Telegraph Business in Sport gave a significant share of the agenda and discussion to the rise of eSports and how brands, agencies and rightsholders can make sense of the commercial opportunities it is creating.

Miles Jacobson of Sports Interactive (creator of the Football Manager franchise) moderated a panel of eSports heavy-hitters.

It was an animated (pun intended) discussion with three key themes at its core:

1. Community

The belief that typical eSports fans are ‘nerdy’ and antisocial is a misconception. The eSports audience is inherently social. They are Millenials. They are digitally native. They are fluent in communicating via digital channels.

Community lies at the heart of eSports. Players and fans typically play one or two games – key titles include Counterstrike, League of Legends and DOTA 2 – and form tight-knit communities based on both playing and watching these games. Fans also come together to consume eSports via streaming sites such as Twitch, a platform which attracts more than 100 million viewers a month, and participate in discussion with like-minded fans in real-time.

Community has played a huge part in building professional eSports teams, identifying elite players and bringing them together to compete as a team. The size of that eSports community has helped fund the lucrative cash prizes on offer at international tournaments around the world. As an example, last year’s The International 2 tournament offered an incredible $18m as part of the prize pool on offer to the best DOTA 2 players.

2. Awareness & Commercialisation

The commercialisation of eSports is helping the sport become increasingly mainstream.

Sports clubs have begun to sponsor individual players and eSports teams. West Ham recently became the first UK sports club to sponsor an eSports player, while Besiktas and Schalke each have their own League of Legends team.

The live experience is also proving popular among eSports fans, with League of Legends tournaments selling out huge venues such as The SSE Wembley Arena and the Staples Center.

Mainstream broadcasters have been begun embracing eSports too. In March, Sky Sports became the first channel to air an eSports tournament by showing this season’s FIFA Interactive World Cup.

3. The Challenge for Sponsors

The current sponsorship landscape is dominated by ‘endemic’ brands that provide the peripherals and hardware that the games are played on.

Brands such as Corsair and Razer are well-established brands that have a long legacy in eSports with numerous successful teams around the world.

For non-endemic brands, gaining an understanding of the relatively new world of eSports is not without its challenges.

But these challenges present opportunities.

Despite the rapid ascent of eSports into mainstream consciousness and huge audiences, the category is yet to sculpt a clear commercial proposition for potential sponsors. Given the fragmented marketplace, comprising multiple publishers, games, events and so on, brands new to the game would have to work hard to understand and then profit from eSports sponsorship. But, if they do, this complexity could also give that sponsor more leeway to carve out a unique eSports proposition.

eSports as an industry will only continue to grow and the opportunities for a brave brand to make their mark are plentiful. If a brand wants to make the most of the opportunities that eSports have to offer, it is vitally important that they go into any partnership with their eyes open. As awarenesss and knowledge of eSports continues to grow. I am in no doubt that it will become a major category in the sponsorship marketplace. Which brands will be first to take advantage?

Fit For Kings: Is The UK The Next Big Thing For DraftKings?

In case you’ve missed it, Daily Fantasy Sport (DFS) could be one of the next big things on this side of the pond. After explosive and very rapid growth in the US, DFS is now looking to export its success to the UK, with DraftKings recently signing partnership agreements with Arsenal, Liverpool and Watford. DFS involves selecting Fantasy Sports Teams, with an entry fee and prize money that can reach millions of dollars. As I said back in 2014, gamification of sport is a huge industry, and the dramatic growth of DFS is testament to this.

DraftKings and FanDuel are the industry leaders in the USA, following an ad blitz, several high-profile sponsorships, and a number of legal battles. At the heart of these battles is whether Daily Fantasy Sports should be viewed as gambling or not. Joe Asher, William Hill CEO, feels that DFS “is gambling and it should be regulated as such”, although you can understand why an established betting firm would feel that way.

Both DraftKings and FanDuel have courted controversy in the USA through high profile advertising and sponsorship campaigns, running a TV advert every 90 seconds, spending a combined $150m in Q3 of 2015. The ubiquity of the adverts caused a backlash in November (illustrated below) from viewers and sports fans, but some argue that it has only alienated those who would never use the service, doing little damage to the business itself.

Beyond the plethora of team and league sponsorships, DFS providers have partnered with major events such as the Belmont Stakes (presented by Draft Kings) and Stadium Lounges like the Draft Ops Ice Club and the Draft Kings Fantasy Lounge, which will “give visitors an interactive place to gather and play DraftKings”. The deliberate move to partner with teams, leagues, events and lounges has caught the eye to the extent that it is hard to avoid the presence of DFS providers in the USA. Primetime sponsored shows such as NFL Insider on ESPN have been compared to “a DraftKings infomercial disguised as a pregame show“. For those in the UK who watch Premier League football, it’s similar to the pervasive presence of betting firms.

It might not be a popular, or progressive method of brand-building, but this ubiquitous brand presence across sporting and media platforms has quickly established DraftKings and FanDuel as the dominant players. As is often the case, sponsorship has been used to legitimise their brands, but this may all be in vain if they lose their legal battle in the US - it is perhaps telling that at this stage, the NFL have opted against signing a partnership with either FanDuel or DraftKings.

The expansion of DraftKings into the UK could also inadvertently jeopardise their domestic operations, due to the requirement of a gambling licence through the UK Gaming Commission. Obtaining this could be seen as an admission that DFS is indeed gambling, and that won’t have gone unnoticed by Attorney Generals across America. As payment processors step away from DFS providers, international expansion can be seen as spreading risk, in case of protracted legal battles in the US.

Whilst DraftKings and Fan Duel are available as an alternative to gambling for Americans, it will be tougher for DraftKings to cut through and at the same time differentiate their offer in a mature betting market like the UK. Given how commonplace betting adverts are, achieving both cut-through and differentiation will be difficult, as it is now possible to bet on Fantasy Football, to receive tips on your Fantasy Football team from betting firms or play Fantasy Football for cash prizes.

Having announced Arsenal, Liverpool and Watford partnership deals in February, we are yet to see DraftKings make much of a move on the UK market…and they are not even listed as a partner on the website of the latter two clubs. Given the popularity of Fantasy Football in the UK and an established gambling market, it is surely only a matter of time until we see DraftKings make their mark here. If their approach is anything like their domestic strategy, you’re unlikely to miss it.

Bloodmarketing: is Red the new Black?

Back in summer 2012, the sponsorship industry witnessed a seminal CSR activation by Hemoba, a Brazilian blood bank and Brazilian football club Vitória, with their ‘My Blood is Red & Black’ campaign. Synergy’s colleagues in Brazil wrote about the activity at the time in their review of the year, picking it out for special praise.

As a quick reminder for anyone unaware of the activity (so that’s probably just … ), the concept revolved around the insight that people in Brazil only give blood when inspired to do so by someone they really care about. So who better to donate for than the club you love?

From this singular insight the club created a clear, cute and well-intentioned campaign, the centre-piece of which saw the red of Vitória’s famous red and black shirts leeched white. As fans committed to blood banks across Bahia State, the club shirts steadily regained their iconic colour.

Again, you can’t argue with the results for Hemoba – who marked an increase in donations of 46% – or Vitória itself, as there has scarcely been a more appropriate example of fans giving their blood, sweat and tears for their team shirt.

So why mention this again?

Well, because last week it was announced that anyone giving blood (okay, anyone in Denmark, in a prescribed location, at a defined time…) would be given a copy of the new PlayStation 4 game, Bloodborne.

With multiple rave reviews, and a RRP of £49.99 (or around 500 Danish Krone), there’s little question this represents a good deal. Even Danes not able to make the donation session on March 23rd in Copenhagen were still encouraged to sign up to give blood, as those that add ‘PS4′ after their name on the GivBlod donor list, have the chance to win a PlayStation 4 console.

Why target gamers? GivBlod have established that there is currently a shortage of male blood in Denmark, so used what they considered a traditionally male platform to incentivise action.

Why Bloodborne? Well, the hemoglobic connection was probably too good to miss, plus it’s a game with a PEGI rating of 16, meaning if you’re buying it, there’s a chance you meet the 17 years-and-over legal age to give blood in Denmark.

With largely positive (if a little quippy) feedback from the online community, it suggests that PlayStation and GivBlod are on to something here.

Question will be whether they use this mechanic to engage more broadly than the stereotypical male gamer demographic, particularly since in Denmark this passion point is actually not quite as definitively XY as assumed (although PS4 ownership might be).

Moreover, if looking at the Europe-wide statistics, it’s clear that female gamers are in fact becoming more and more prominent.

In the wake of #Gamergate, it’s all the more important that advertisers, brands and associated stakeholders consider the wider gamer demographics as a relevant group to engage.

Regardless, it’s unlikely that this is the last we’ll see of consumer incentivisation meeting a product launch beyond the initial Danish blood test.

ESports: It’s in the Game

Banana, Fenrir and ppd. No, that’s not a profound spellcheck error, but actually three superstar players who, as part of separate teams, competed for $10.1m in prize funds at a single tournament earlier this year. To make a comparison, this is only 19% less than what UEFA paid out to Real Madrid for winning La Décima in 2014.

Unlike Bale, Benzema and Cristiano Ronaldo, however, you probably haven’t heard of them, their teams or even the sport they play. They won their money playing Dota 2, an online multiplayer battle arena game, think digital chess combined with fantasy gaming, and they represent top members of the growing eSports community.

ESports is a catchall phrase for what is essentially competitive computer gaming: organised tournaments, put on either by game producers, game players or independent bodies. The range of competitive games is, as you’d expect, huge, but they mostly fit within competitive categories; from the lesser-known computer-based multiplayer games, such as League of Legends and the aforementioned Dota 2, to major console gaming titles such as Call of Duty and the EA Sports FIFA Series.

ESports have long been part of gaming culture, but as this generation of tech-savvy gamers has grown up with high-speed Internet in conjunction with the growth of free-to-use video stream sites, such as YouTube and Twitch, the growth of the competition and consumption elements of eSports has sky-rocketed. We spoke with Kyle Bautista, General Manager of compLexity Gaming – one of the world leaders in competitive gaming – who told us: ‘Players and teams have been competing in these games for decades, but the problem was being able to expose a large enough audience to them to get people to know they existed, let alone sustain any substantial growth. The biggest contributor to the growth of eSports is likely Twitch and other livestreaming services.’

Following its growth in 2014, which saw its number of visitors surge by 513% from 371m to 1.9bn, Twitch was purchased by Amazon, and whilst the parent company’s influence has so far been minor, Twitch’s recent purchase of the company ‘Good Game’ – which manages eSports teams ‘Evil Geniuses’ and ‘Alliance’ and also curates eSports tournaments – suggests that Twitch is looking to integrate itself even further into eSports culture.

Amazon will be hoping to replicate Google’s success with YouTube (which sees successful content creators having their streams and videos sponsored by advertisers) on Twitch as a long-term monetisation programme. The advertising streaming option is beneficial as it promotes both great content creation from its users, as they receive a cut of the money, but also encourage brands to spend their valuable ad money on successful channels. To make Twitch as accessible as possible for brands, however, it has to rely on its predicted growth coming to fruition and provide detailed audience segmentation for brands to tap into.

Unlike traditional sports, whose history lies within live events and then TV or radio broadcast, eSports have grown out of an Internet-connected audience and their users exist almost exclusively online. Where big sporting rightsholders have been catching up with new Internet consumption habits, eSports were moulded by them and will continue to grow because of them. It’s unlikely that those habits are going to break, with Vice President of eSports at Riot Games Dustin Beck describing eSports fans as ‘a generation who aren’t consuming their content on TV’, going on to describe TV as ‘not a goal or a priority’.

These changing habits reflect the wider change in content consumption in the Western world: the same access of high Internet speeds that spawned the success of eSports also created a Netflix generation who watch what they want, when they want and on the platform of their choosing. In the future, as this generation matures, the consumption rates of eSports will continue to grow: it already surpasses the likes of NBA Finals and the MLB World Series in viewing figures.

The average eSports fan consumes 10.5 hours of content a week compared to traditional sports fans who watch 7.5 hours a week. Furthermore according to IHS, eSports video will bring in $300m in online advertising revenue alone in 2017, with consumption of eSports to double in size to 6.5bn.

Whilst the access to and usage of Internet-enabled devices has had a major part in the growth of eSports, so has the public perception of gaming as both a pastime and art form. Corporations such as Sony, Microsoft and Nintendo have helped power a global growth in console gaming, popularising a wealth of highly intelligent and beautifully designed games.

This, in conjunction with the proliferation of home PCs, has helped make gaming, as a mainstream activity, become more socially acceptable. As growth in ownership of powerful devices such as smart phones, tablets and consoles continues, so will the perception of gaming itself. For the masses, eSports still represent a niche corner of the more acceptable scene. As growth continues, however, this is likely to become a more widely accessed sporting event.

Where previously the sponsorship of eSports has been dominated by endemic brands such as Alienware – whose activations have been mostly restricted to logos on apparel and a few sponsored streams – we’re now seeing the likes of Coca-Cola, Red Bull and American Express stepping into the space and bringing their unrivalled sponsorship experience to the fore.

Coca-Cola has a large following on its @CokeESports Twitter account, delivering both a Millennial-focused platform for Coke Zero, alongside a few simple activations such as printing out fans’ League of Legends characters on bottles and cans at tournaments.

Meanwhile, American Express released personalised debit cards for fans, citing the hard to reach Millennial demographic being the exact reason for their sponsorship. ESports for these brands offer unique opportunities to access a global consumer audience, mostly Millennial, who are bypassing traditional advertising routes. For Bautista, these big brands create an entirely new proposition for eSports: ‘The addition of someone like a Coca-Cola, a MasterCard, or Nissan certainly brings a higher level of expectation to an event or team, but it also opens up more doors. The ability of a blue-chip company to create an extensive and innovative interaction between their world-renowned product and their targeted audience is what makes the non-endemic sponsors so exciting.’

It is debatable, however, how both the non-gaming public, Media and Government would welcome heavy brand investment in a move towards more sedentary ‘sporting’ activities. Here in the UK, the Government pushes a number of healthy living initiatives, notably Change4Life which encourages movement, whilst stories about the apparent ‘obesity crisis’ are never far away from the news.

Meanwhile, to the concern of many, sedentary gaming activity appears to be on the rise. A recent study by Nielsen revealed that on average US gamers play for 6.3 hours a week, an increase of over one hour since 2011; moreover a UK Government briefing reported that 55% of English boys play video games for two hours or more every day. Overly heavy brand sponsorship of this sedentary activity, therefore, has a certain risk factor; with the wrong PR and communications angle, it could have a negative impact on the brand’s relationship with both stakeholder groups. The latter especially might lead to a reduction in brand perception metrics, in particular trust.

Admittedly it is true that major sporting events, such as the FIFA World Cup or the Olympics, are often watched in sedentary (and arguably unhealthy) environments at homes and pubs. However, the key difference is that these traditional events have the potential to inspire movement (in children especially); Coca-Cola GB, for example gave away one million footballs during the 2014 FIFA World Cup, and McDonald’s, as a sponsor of the Home Nation FAs, are heavily involved in the grassroots game. ESports, on the other hand, lacks an obvious link to promote physical activity, over just simply inspiring more consumption of gaming and sedentary spectating. Sponsors, therefore, will have to work hard to come up with creative solutions if they are to fully justify their sponsorship with some important stakeholders.

Another point for consideration for brands must also be the perceived danger of video games on the psyche of young people. Over the past few years there has been a great deal of debate over the link between violent video gaming and real life aggression. Although Twitch users have to be aged 13+, and there are barriers (such as age gates and profanity filters) to underage consumption of adult-themed material and language, this is by no means foolproof. While the argument hasn’t been proved, the perception alone could damage a brand’s image; especially if the brand involved directly appeals to children and teens in other areas of their marketing.

ESports are the future, the next big sporting phenomenon set to eclipse some traditional properties in the coming years. 2015 has the potential to mark a dramatic shift in the sponsorship landscape, which provides a ripe opportunity for global brands to speak to millions of young people worldwide. It is a truly global platform that levels the playing field by taking no account of geo-political sensitivities.

Already, some big players are getting involved – Amazon’s purchase of Twitch TV is a sign of things to come – and more are sure to join the party in 2015. Now is the time, if done both sensitively and with due regard given to the dangers of encouraging sedentary behaviour, for brands to become synonymous with eSports before the wave crests.

Christian’s blog comes from Synergy’s Now, New & Next sponsorship outlook for 2015, which can be viewed in full here.

Does the rapid growth of eSports show it provides a legitimate alternative to real sport for brands?

As consumption patterns of music, entertainment and sport continue to shift, so too does the approach of rights holders, brands and agencies. The growth and quality of internet access has allowed new pursuits to spawn in the past 15 years and offers huge opportunities for entrants into the leisure market.

Source: Battlefy (2014)

Internet broadcasting, through PPV platforms, YouTube channels or bespoke social networks and apps have allowed a new generation of superstars, spectators and key influencers. The rise of created sports (Slamball, Crashed Ice), Fantasy Sports and Professional Gaming has allowed brands to connect with a generation of millennials that they may not otherwise have. Professional gaming is not a new phenomenon, with Space Invaders tournaments taking place as early as the 1980s. The growth of the internet, and thus multiplayer platforms, has seen the number of participants and prize money soar, as shown in the graph above. As consumer interest has risen, so has media interest, with bespoke satellite channels, and more recently internet channels, providing widespread coverage of tournaments.

Major channels including ESPN, CBS and DirecTV have all covered professional gaming, however, internet channels such as Twitch (recently purchased by Amazon for $970m) and MLG.tv have been the major media platforms. Both platforms have huge subscriber bases, dedicated social media communities, and continue to grow exponentially. In 2013, 45 million unique users watched 12 billion minutes of video on Twitch, from six million videos, while 58% of the users spend more than 20 hours a week on the streaming site. These figures place Twitch in the same league as the top cable TV channels, while peak viewing (at 4.5 million live viewers) is comparable to major sporting events such as the Stanley Cup Finals. While traditionally appealing to a niche, hardcore community of fanatical gamers, the appeal is now spreading to more casual gamers, and thus appealing to more consumer brands. Samsung & Movistar were two of the initial backers; Samsung partnering with the World Cyber Games, and a pro team. On Monday (15th December), Coca-Cola live streamed an eSports Game-a-thon from their global HQ in Atlanta. Five renowned gamers took part in five games, streamed over Twitch, with the winner donating the prize pool to a charity of their choice. It is all part of a conscious focus from Coke, which includes support for the League of Legends, and a dedicated Twitter gaming account with 204,000 followers.

Both FIFA & NASCAR have entered into the world of professional gaming, with the FIFA Interactive World Cup (almost 2 million players), and the NASCAR iRacing series. The number of participants is relatively low, compared to the number involved in other eSports titles, however, brand involvement is arguably more advanced in this space. FIFA and NASCAR both make use of the existing partners they have in place, with Sony heavily involved in the Interactive World Cup, while car manufacturers have allowed access to ‘digital versions’ of their cars across the iRacing series. By getting in early, have FIFA and NASCAR found a niche in the market which will convert gamers into real life? Or are they just seeking to avoid football and racing fans defecting to gaming?

Whether across Twitch and MLG.tv or YouTube and Netflix, a generation of millennials is accustomed to consuming their content on TVs, laptops, tablets and mobile phones. As the broadcast model continues to evolve, so too does the opportunity for ‘challenger’ sports such as professional gaming. With prize pools, audiences and awareness increasing, it is only a matter of time before more consumer brands become involved.

Whilst ‘YouTubers’ establish themselves as the next generation of influencers alongside actors, musicians and athletes, so too will brands wanting to tap into the generation of millennials. Indeed, this new generation of influencers are starting to impact ‘real’ sport, with one ‘YouTuber’, John Green, investing some of his personal advertising revenue as a sponsor of AFC Wimbledon.