Missing Super Bowl Viewers FOUND!

This weekend, DJ Marshmello played Fortnite’s first live-streamed virtual concert, and while it wasn’t the first of its kind in the industry, it blew all precedent out of the water with its scale. It included all of the palatable excitement of an analog concert, as was seen with the flood of videos from mesmerized parents watching their kids dance along while playing. According to streamers who were commenting on concurrent viewers on Twitter during the event, Twitch plus YouTube concurrent viewership was roughly 1.2 million viewers (571k for Twitch and 807k for YouTube). While media outlets had initially reported a concurrent viewer tally of 10 million, my time with eSports has made me wary of obfuscating factors like double-counting devices and players coming in and out of the game. There are roughly 200 million Fortnite players so if the reports of 10 million total audience viewers are correct, it implies. 5% — a reasonable figure, considering player vs. player game play was halted during the concert.

These numbers are still huge, especially in light of gloomy Super Bowl headlines — “Super Bowl Viewership Falls to Lowest Since 2008”. CBS Sports reported total audience of 100.7 million, down 5% YoY. Total audience includes CBS Interactive, NFL digital properties, Verizon Media mobile properties, ESPN Deportes television and other digital properties. However, NBC called it the “most live-streamed Super Bowl ever,” with a 2 million average minute audience and 3.1 million concurrent streams. Again, on this basis, a virtual concert that got announced a few days ago beat out the Super Bowl. Another reference point — regular season NFL games get roughly 300k-400k streaming viewers, so the concert’s streaming viewership was multiples the size of the most valuable content on traditional television.

This is one of the first real examples of a live broadcast experience that could reach a global digital audience and dip into the enormous bucket of TV ad dollars, which stood at $125 billion in the US alone last year according to Magna Global. Viewership of traditional TV continues to drop precipitously, while sports has seen a slower decline. Meanwhile, the cost of a 30 second Super Bowl ad continues to increase due to the scarcity value of a large, live audience.

Facebook and Google garner the bulk of digital ad spend, but consumer behavior differs between traditional TV and social media/search. Marshmello playing at “Pleasant Park” in Fortnite is very much like broadcast TV because it reaches the masses who “tune in” at a specific time and share an experience. It provides the chance for a content creators to deliver authentic experiences and for proximate brands to be present while avoiding the in-your-face advertising that younger generations loathe.

One may argue that YouTube sensation PewDiePie had already set the stage in garnering 83 million YouTube subscribers who watch him play video games versus Marshmello’s 23 million subs. I would argue that this concert is a look into the future given the EDM (Electronic Dance Music) DJ has more mass appeal, evidenced by multiple platinum songs in many countries and many Top 30 of the Billboard Hot 100 appearances.

Also, unlike PewDiePie, Marshmello’s experience isn’t tethered to one of the big centralized internet companies in the way that PewDiePie is a prisoner of Google’s advertising dollars. Big internet’s hold on its users originates from the ability to use open source software to collect free and sometimes private data from users. As detailed in prior comments on big internet and privacy, they then sell this data over and over again, resulting into a lot of money and control. Decentralized technology holds the power to break up the gatekeepers and distribute that value more fairly to a larger number of players who are closer to the source — content creators and the consumers of content.

Old world: Broadcasters pay the NFL, Advertisers pay Broadcasters and everyone takes fat margins along the way.

New world: Digital Platforms allow for P2P content creation and exchange.

As an early believer in how eSports could affect behavioral change, I was excited to dig into the newest video game phenomenon, non-fungible tokens (NFTs). After nearly a year of meeting with companies and talking with developers, near term hurdles around the fledgling technology outweighed opportunities, while the longer term optimistic case for the underlying technology remained compelling.

Hurdles and opportunities for the future of video game economies will be further detailed later this week in — Imagine a World — I’m Taking my Gucci Bag with me from the Super Bowl to the Online Concert. I first discussed the topic of NFTs in a previous post New Blockchains and NFTs in Gaming — No Copy Cats.

Bottom line: The digital scarcity enabled by NFTs better mirrors possession of physical objects and live experiences than do our current Web 2.0 solutions. Despite initial concerns, positive signs have started to appear quickly and simultaneously and they should provide an exciting new vision for in-game economies. I expect traditional video game publishers will start to notice these positive indicators sooner rather than later.

As time spent in digital venues continues to grow at the expense of time in analog venues, brands have a harder time finding us. Still, there is a pot of profitability at the end of this rainbow for those who can make it there. It has become more difficult for brands because they need to create new advertising inventory that will resonate with new audiences who are done with ‘in your face’ advertising. In addition to new inventory, the shelves from which new gems of content can be sold must be built. It also requires tapping into needs and wants in a less invasive way; the zeitgeist of privacy protection means that we are becoming more suspicious of companies who make a lot of money by extracting information about us, sometimes without our consent, only to repackage and sell it.

The good news for brands is that I want to take my Gucci bag with me from a holiday party in the real world to the Mario Party in the digital world. Also, experiences in digital are sometimes even more meaningful to me than analog experiences. Finally, while we dont want to see a can of Coca Cola sitting on a table in a video game, we are open to seeing something more creative and entertaining involving brands, like Marshmello performing in Fortnite.

Smart brands will figure out how to make money from more creative ad placement and also from transaction fees that track my digital Gucci bag. Both of these are a lot higher margin than billboards and TV ads. However, reaching this will require a media industry culture shift that asks — how do we meet consumers where they are? Instead, we are seeing more concentrated spending on the last bastions of traditional attention. The ~$5 million Bud Light / Game of Thrones spot during the Super Bowl is analogous to trying to catch a smaller fish with a bigger bait.

Source: Anheuser-Busch InBev

Why Live Matters in Evaluating TV Advertising

Let’s compare Marshmello’s concert to the top three shows among adults 18–49 (live plus same-day) in 2017–18 — NBC’s Sunday Night Football, Thursday Night Football on CBS and Thursday Night Football on NBC.

Broadcasters Pay the NFL

• Traditional: In 2018, CBS and NBC paid about $45m per game to reach 15.25 million viewers on average across the six regular weekly broadcast windows on CBS, Fox, NBC and ESPN, up from 14.9 million in 2017.
• Streaming: Twitter paid $10m for 10 games in 2016, or $1m per game. Amazon paid $50m for 10 games in 2017, or $5m per game to reach an incremental 2% of the viewership on broadcast, or roughly 300k-400k.

Advertisers Pay Broadcasters

• In 2018, “Sunday Night Football” was the most expensive TV show for advertisers.
• “Thursday Night Football” advertisers were going for $434,078 on average in 2018 from $550,000 in 2017 for the games on CBS and NBC according to AdAge.

The Cost of a 30 second TV Spot during Sunday Night Football

This report was written in collaboration with Maximilian Fiege, whose prior blockchain research was published by the Council on Foreign Relations. Angela’s stroke of luck happened in meeting Max at a Solidity bootcamp in SF, which they both attended just for fun.