FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on UMG “Enters into an Agreement to Acquire Activate Entertainment LLC.”
UMG Media Ltd. entered into an agreement to acquire Activate Entertainment LLC (“Activate”). Activate is a creative management and production services company that specializes in esports events and activations.
Activate has offices in both Las Vegas and Los Angeles and is led by Chris Iaquinta and Dirk Hagen, who have combined over 40 years experience in the event management and production industry, with a focus on turnkey, custom activations for a wide variety of entertainment industries, both gaming related and beyond.
UMG Online is an eSports website, a high-quality next-generation gaming experience. With origins as a LAN event provider, the company is now set to branch out into the online gaming world. The daily source for tournaments and ladders, offered on multiple games across various platforms.
The eSports industry has captivated hundreds of millions of viewers worldwide through large tournaments in dazzling arenas. Predominantly, viewers mainly watch casual or competitive events through YouTube and Twitch. And the two platforms together collectively have a larger audience than HBO, Netflix and ESPN combined, according to Goldman Sachs. Primarily, most of the viewers are from Asia and 79% of worldwide viewers are under the age of 35 years. In 2017, viewers logged a total of 355 billion minutes on Twitch, representing a 22% growth year-over-year. At the time, companies mainly monetized eSports through sponsorships, but by 2022, Goldman Sachs projects that media rights will dominate the overall revenue stream for the industry. Media rights provide broadcast stations with the rights to stream pro league events. For instance, Activision signed a 2-year USD 90 Million agreement with Twitch to distribute its Overwatch League throughout North America. Moreover, League of Legends distributed its rights to ESPN+, Twitch, and YouTube. As a result, global eSports monetization is forecast to reach upwards of USD 2.96 Billion by 2022. Now, in combination with growing audience numbers and increasing monetization, organizations are able to hold large-scale tournaments that payout millions of dollars. Notably, Dota 2’s The International tournament is a year-long tournament series that is expected to pay out over USD 30 Million in 2019. Similarly, Epic Games’ Fortnite World Cup paid out USD 30 Million in prize winnings, however, unlike Dota 2, the tournament for each individual event only lasted a single day. Nevertheless, players had to compete in open online qualifiers in order to advance to the World Cup finals. Overall, just like any other media industry, the audience is key to the future growth of this market. And with the accelerating popularity of eSports, the industry is becoming a source of mainstream media for millions of people. According to data compiled by Goldman Sachs, the global eSports audience is expected to reach 276 million by 2022, increasing from 167 million in 2018.
A major reason why people enjoy watching eSports is the social interaction between one another, said Serrento, an editor for the Asian Dota 2 League. Studies have proven that social interaction is a big factor when it comes to both traditional sports and eSports. Generally, eSport events are shown through livestreams on broadcasting stations and spectators are usually allowed to chat with and interact with one another from the comfort of their own homes. Overall, market research firm Newzoo expects that there will be more than 2.4 billion people playing games around the world by the end of 2019, meaning that the total addressable market is much larger than traditional sports, especially ones that primarily appeal to specific regions. In a survey conducted by Magid and Battlefy, 89% of eSports viewers said they would watch live events to get better at the game. Additionally, 83% say they enjoy watching events at a professional level because they actively play the game already. And while professional tournaments only attract several thousand people in-person, the online community is exponentially larger. “Although the audience for gaming content is predominantly found online, traditional television is also making a play for viewers. The appeal of reaching those massive online audiences has TV executives jumping out of their seats,” said Andrew Paradise, Founder and Chief Executive Officer of mobile eSports company, Skillz. “Why? Games that began as two people huddled over the same vacuum tube screen, and then went global thanks to the rise of internet gaming, are now coming back to bring people together in person. People are consuming esports everywhere – together.”
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