Sports Licensing Magazine - Edition 20

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Big Bash League with Anthony Everard

Burley Sekem with Ed Cunningham

REPORT Rugby League Sports Licensing

Sports Licensing - Edition 20 LIKE US ON FACEBOOK @THEBUGGREPORT

From The Editor

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t was March last year, in the first edition of our “Sports Licensing” magazine, where I mentioned that the sports industry in Australia accounted for $15 billion dollars of revenue. One year later it is great to note that this figure is now $16 billion and a 3.6% annual growth (11-16). Because of the diverse nature of sports and and the broad following that sports have, the makeup of the industry is quite broad in terms of market share. The sporting business employs over 100,000 people across more than 8,000 businesses in Australia1.

Sports overall have become widely commercial nowadays with sponsorships, advertising and endorsements at an all-time high. If you take some time to study sports an an industry, it is easy to see that there are so many options in terms of sporting codes and as a result opportunities to create great product to match. If we take 20/20 Cricket for example, this is a sporting code that has become uber-popular, especially in the past 12-months with the Big Bash League (BBL) and the Indian Premier League (IPL). Not only has this new code brought more attention to Cricket as a sport, but also given players around the world more opportunity to be stars on a global scale. This all leads to popularity in the code and creates more opportunity for sponsorships, advertising and endorsements, as I mentioned.

Developing a new code such as 20/20 has meant that Cricket has become appealing to more people than only the die-hard Cricket fans who would traditionally

follow only One Day or Test Cricket.

The 20/20 model is something that appeals to more people because it is a short-form “spectacle” form of the game. As you will hear later in this magazine from Anthony Everard, in Australia alone we had over 1 million fans attend BBL games in 2015, a fantastic result by any measure!

In this second edition of our “Sports Licensing” magazine, you will find news, interviews and updates on Australian Football League (AFL), National Rugby League (NRL), BBL and eSports, to name a few. I don’t think I am alone in saying that I expect “Sports Licensing” to go from strength-to-strength and become of the most lucrative parts to our industry in Australia and around the world. Our goal is to build on this publication and broaden our coverage into all parts of the world across all sporting codes.

We hope that you enjoy this years “Sports Licensing” magazine and as we continue to further develop the publication, please let us know what you would like to hear about and things that are of interest to you and your business in the sports industry, not only in Australia but all around the world.

You can get in touch by emailing editor@buggreport.com.au 1 - www.ibisworld.com.au

THE BUGG REPORT Managing Director Tony Bugg: tony@buggsolutions.com.au Editor in Chief Matthew Bugg: matt@buggsolutions.com.au

Contacts Advertising: bookings@buggreport.com.au Feedback: editor@buggreport.com.au Media: media@buggreport.com.au

Bugg Marketing Solutions Phone: +61 3 8782 3717 | Fax: +61 3 9769 7922 | Email: info@buggsolutions.com.au Address: Level 1, 64 Victor Crescent Narre Warren VIC 3805 | Postal: PO BOX 491, Berwick VIC 3806 The Bugg Report has been compiled as a guide to retail, toys, licensing and other related matters. The views and opinions provided are based upon the views and opinions of its writers. In no way is The Bugg Report a factual guide to retail, toys, licensing and other related matters and does not take responsibility for how the information provided is used by its consumers.

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THE BIG BASH LEAGUE Feature interview with Anthony Everard - The Next Big Thing in Sport

BURLEY SEKEM A trusted partner in the sports business

RUGBY LEAGUE Australia’s No. 1 Sports Licensing Program

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LIMA AUSTRALIA June update and membership news

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THE NEXT BILLION DOLLAR INDUSTRY Dan Amos on the growth of eSports

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The Big Bash League THE BIG BASH - THE NEXT BIG THING IN SPORT

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ustralians live for sport; Football in the Winter and Cricket in the Summer. As the sporting landscape evolves and technology allows for greater excitement for fans, new sporting formats continue to emerge.

With 3 hours of non-stop action, fireworks, music and loads more entertainment, the KFC Big Bash League (BBL) is the ultimate family night out. The sentiment goes something like this; match experience, entertaining, affordable, fast, easy and safe.

The Bugg Report spent some time with Anthony Everard; the Head of BBL to understand the key drivers behind this growing phenomenon, which began its journey in 2011.

Anthony, I understand you had a three year stint as Marketing Manager for Cricket Australia in the early 2000’s. In your view, what are the overriding changes to what sporting fans want today versus during that time?

Things have changed a lot over the past 20 years. We did not have YouTube, Facebook or Twitter in those days. Sports now are catering for a far broader audience and therefore we need to be nimble about how we deliver our product.

We must now have broader appeal to engage the audience. Along with technology evolution we now compete against other sports and other entertainment platforms including concert acts and the like.

We need to be confident that we can deliver a product that is as good, if not better than our competition.

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As we approach the 6th season of BBL, have the fans now adopted a clear team based allegiance?

We are still only 5-years-old but we are beginning to see strong team allegiances, particularly in the single team states. It is worth remembering that people were initially confronted with a raft of team colors that were not necessarily aligned to the particular state. The two-team states have tended to catch up over recent years. It was fantastic to see at the Sydney Smash last year the strong support for both teams. The fans are certainly now showing their support or tribalism to their respective teams.

From a commercial standpoint what is the ongoing strategy to engage the fan base with the consumer products program attached to the BBL? I believe there are three elements to answering this question. Our first priority, off the back of the success of the competition, is to push into mainstream retail. We have realised strong growth from our at match sales platform. This is driven by the fact that we now have 1 million fans attending our matches during the season. Online sales have also tended to be very strong. Secondly we want to develop the depth and breadth of the range beyond the core, hats, replica t-shirts & apparel based merchandise and grow into other categories. Thirdly we are keen to grow our kids ranges. Recent data indicated that based on sales of replica shirts during the season that there is an appetite for kids to be better catered for with a broader offering of merchandise. Probably

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our biggest barrier at present is our lack of exposure in the mainstream retail space. Having said that, the supporter ranges for women and kids is a big play for Myer & David Jones and the bigger online platforms remain important to us.

I noticed that you partnered with Warner Bros. last year with a major competition based promotion for Batman v Superman. Can you explain this activation and was it leveraged with merchandise?

Yes this began as a rather small promotion that evolved during the season to become a major activation. It started as a retail opportunity however as we learnt more about the Warner Bros. business we saw the opportunity to engage a much larger audience outside our core demographic. We were able to leverage the brand equity in Warner Bros. and what began as a merchandise play soon evolved into a much bigger promotion with Movie World and their cinema arm which included holidays for families and the like. We tapped into the strength of their brand and communicated with a new audience. It was very successful.

You also launched a promotion last year with Zooper Dooper. I believe these sold out in most supermarkets! What did this promotion mean to the season?

It was a wonderful brand fit. The alignment was perfect. Zooper Dooper is already a part of summer traditions and the fact that their ice treats mirror the 8 colors of our teams could not have been better.

This allowed the BBL to play in the grocery space. They secured an exclusive tie up with Coles and then ran a national promotion giving away family passes to BBL matches.

This was perfectly in step with our priorities. This reinforced the value proposition “A fun night out for the family “and we will build on this next year.

I read recently that the BBL is now the number one rating competition, viewer-for-viewer, in Australia. With an average audience of 1.1 million, what plans do you have to translate this enormous interest into encouraging more people to come to the games?

We want to differentiate the live experience. We see a significant shift in that families are looking for a vehicle to allow them to spend more time with each other. With the fast paced world we live in and the associated pressures this brings upon families, the BBL is an ideal avenue for mum, dad and the kids to spend time together. We experienced a 25% growth on both attendance and viewing audience last year. The attendance has basically doubled since we began.

Last season we had 1 million fans attending the games.

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The Big Bash is an example of taking the core discipline and developing a hybrid model that will tick all the boxes!

Can you explain your plans and evolution for the specific team based merchandise programs?

The licensing program is run centrally at present and largely is a one size fits all across the league.

We do have a challenge in terms of scale, as the season is quite short and sharp, so we want to service the latent demand via the mainstream channels first. I suspect that we are not quite mature enough at this point to develop significant team based merchandise ranges. We are however looking at developing specific items that will resonate with a particular characteristic of a team. For example in Tasmania where it can be cooler than other

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destinations we are planning a beanie as a core item in that market. We are probably looking more seriously at driving the event based merchandise.

Is the format ready for merchandise that relates to the stars from both a Local and International angle?

Yes I think it is. We are a truly global sport now. We have 16 of the biggest International stars in the business from around the world, plus the established local Australian Superstars. We have global broadcasting rights and push into all of the key markets, including India and the UK. We are able to sell online internationally and although it is aspirational, there is no reason why we cannot establish franchise markets off shore. We need to keep focus on developing the local league.

Network 10 recently won the Logie for Most Outstanding Sports Coverage for KFC BBL. What commercial opportunities does this create for you?

Credit to Channel 10 here. They have not traditionally broadcast cricket before and there were certain reservations as to how it would perform. They really have not missed a beat. I believe the market still under estimates the power of the

BBL during summer. It is equivalent to 35 Friday night games along with a million viewers in a truly national market spread. We are fortunate to straddle a number of key selling periods including, the lead into Xmas, Boxing Day sales, School Holidays and our finals coincide with Back-to-School, therefore any brand who seeks to talk to this audience, we tick all the boxes.

As the world continues to change at an alarming rate, it is difficult to plan too far ahead. What are your three key goals for the league for the next two seasons?

Firstly I would say that we are focused on consolidation. We certainly do not see this as a race.

We want to continue to establish the BBL as a family summer holiday tradition. The BBL is there to attract new fans to Cricket. We have to be mindful not to disrupt our core fan base. There are many families who are still not engaged with our league and that is the big upside. One of the most exciting things for us now is the WBBL. We launched the women’s league last year. We were caught by surprise by the popularity of this brand. TV ratings and attendance were both significant for the fledgling competition. We have identified and implemented a mantra of one club, two teams. This means that each club can field a

male and female team under the same franchise. The WBBL has been created to challenge the perception that Cricket is only for males. It gives us a real competitive advantage.

KFC have been your key partner from the beginning of BBL back in 2011. What does this mean commercially to the competition?

In the early days they brought a real competitive advantage to the sport.

To have an established brand on board from the beginning gave us an authenticity and as we are a not for profit league, their generous sponsorship can be re invested into the many initiatives we initiate with the BBL. It also provides us a great channel to speak to our fans. This is destined to be a long-term relationship as they are delighted with their involvement and Cricket does prize itself for building long term relationships.

Anthony, thank you again for taking the time to enlighten us on your thoughts and plans for the BBL. It is an exciting time to be leading the team and we look forward to more engaging competition and entertainment from BBL when the new season kicks off later this year.

For more information visit www.bigbash.com.au

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Burley Sekem BURLEY SEKEM A TRUSTED PARTNER IN THE SPORTING BUSINESS

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s we move closer to Licensing Expo in Las Vegas, we have been able to track down Ed Cunningham, Director of Western Australia based sporting goods specialist, Burley Sekem. We understand his company is now approaching 100 years in the sporting business.

This is significant, not just for the sports business, but to remain relevant for this length of time in any industry is an achievement worth noting. Ed’s business is focused primarily on two key areas; manufacturing of the Burley football and the Sekem sports apparel range.

These categories are largely complimentary to each other and have stood the test of time. We began by asking Ed a little about his time in the business: Ed, can we begin by asking you about your time in the sports industry and your history with the Burley Sekem Company?

At risk of sounding somewhat ancient, 2016 marks my 30th year in the sports and leisure industry! It started in the UK in 1986 and after moving to Perth in 1990, I joined Burley Sekem and in 1996 took part in a management buyout and became a Director.

Since then, I have been very involved in the management of some of our key relationships covering licensors, suppliers and customers. We are fortunate to have many long-term partnerships in place and I am also supported by many loyal and long-term

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employees with a wealth of experience. The business has three areas of operation: Burley footballs and indoor cricket balls, Sekem - apparel and our licensed business, which is our biggest area of operation.

A recent LIMA global study identified that the sports licensing category has the potential for significant growth. How do you rate the current and future opportunities available to engage the market with innovative products in this field?

I think there is, undoubtedly, potential for growth in the sports licensing category as a whole. With respect to our particular area, we have had success in recent years in growing our licensed accessories across all the major sports in Australia & New Zealand.

Therefore, at this particular point in time, our objective is to consolidate our position before our next growth chapter.

Innovation in licensing is always important, whether it be in product design or use of technology to increase supply and distribution efficiency. This focus on innovation is likely to intensify with the rapid increase in online activity, social media and changes to traditional supply channels.

Outside of the traditional Australian sports, do you see opportunity in this market to develop a meaningful platform for the more significant global sporting brands such as Soccer, NBA, NFL and others?

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Yes, the improved access for consumers to watch just about any sport worldwide has undoubtedly increased demand for the major global team brands in Australasia.

In fact, we have represented many top EPL and European clubs over the last decade including Manchester United, Manchester City, Juventus, Liverpool, Arsenal, Chelsea and Barcelona to name a few. Maybe Leicester next! There is an ever increasing interest in NBA and NFL in Australia so we are constantly reviewing opportunities from overseas.

How have you seen and coped with the changing face of the marketplace in terms of the growth of social media and technology gains?

It would be fair to say that we have adopted a cautious approach to social media as there have been examples of companies mishandling this new dynamic. The main effect is that things are changing much faster and the consumer has access to far more information than they did previously. It has made it easier for new players to market themselves to a wide audience quickly. As a licensee, many of our customers are very active on our behalf on social media, and therefore as a wholesaler with many customers we have continued to allocate most of our resources to our customers and licensors.

Technology has helped improve efficiency enormously in many facets of our business; drastically reducing the order processing time, passing

information to our customers quickly and, of course, a big reduction in the use of paper.

As our local market is relatively small and competitive, have you considered selling and marketing your products internationally?

The market for our two main licenses, AFL and NRL, is largely domestic and therefore overseas sales potential is limited. Our Sekem teamwear apparel has good offshore potential with the depreciation of the Australian dollar in recent years.

I notice with interest that your brand portfolio is quite diverse spanning AFL, Rugby, Soccer, Netball and Tennis; does this work in your favour when pitching for new business?

Undoubtedly it does. Whether talking to licensors, overseas brands looking for distribution or retailers, our portfolio of properties in AFL, NRL, State of Origin, Wallabies, Super Rugby NZ, Socceroos, A-League and Australian Open Tennis sends a strong message of professionalism and credibility. We are able to offer distribution to over 1000 accounts from our Melbourne warehouse and can easily “bolt-on” additional properties.

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We have been working directly with clubs to develop accessory ranges that are designed specifically for the female market.

Ed, we see the emergence of a number of Women’s teams particularly in AFL and now in the BBL. Do you have any plans to develop product ranges targeted particularly at the female sporting person and associated fan base?

We have been aware of the increasing female participation rates for a number of years. In fact, through our West Australian Football League (WAFL) sponsorship, we have been producing specially designed ladies football apparel and footballs for several years. We recently signed an agreement with the West Australian Women’s Football League.

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In the licensed arena, it has become more of a focus in our range planning as it is a growth area.

Females make up a large portion of the supporter base within our domestic sporting competitions and they have a need and want for more fashion focused garments.

I believe that the Burley football is still the dominant ball for both the WAFL and the South Australian National Football League (SANFL).

What other leagues do you work with and what expansion plans do you foster?

Correct. Burley footballs are used exclusively in both the WAFL and the SANFL and these two states have received the majority of our football related marketing resources. We also have an AFL license for footballs which enables us to supply club supporter balls for all teams nationally.

In recent times, both Victoria University and Adelaide University conducted thorough scientific tests on Burley footballs compared to our opposition. In both cases it was concluded that Burley footballs meet the AFL’s specifications for use.

Burley has been the foundation brand for your organisation for many years. What was the thought process behind the

purchase of Sekem and what has adding this additional brand brought to your Company?

Burley was established in 1907 and Sekem started in 1923 so there is plenty of history here. The two companies were joined in 1983 by the former owner, Kevin McIntyre. In many ways it’s a natural fit as it enables the company to offer a “one stop shop” for any football club or retailer. It has definitely strengthened the company and has brought many synergies.

Do you have any aspirations to develop your business beyond your current core sport categories?

The answer to this question is yes, albeit cautiously. There is no reason why our model could not work very well across other categories and at any given time we are evaluating opportunities in various sectors, such as entertainment.

Do you have any “blue-skyinsights” into the evolution of the industry and how do you see Burley Sekem fitting into this equation?

I think in the Australian marketplace there are many very well established businesses that are adjusting to the rapidly changing environment, where barriers to entry have been lowered. In this climate, it is vital to be alert and nimble!

I see Burley fitting in as a specialist Company offering a reliable, no nonsense, professional distribution model that values its culture and relationships highly. Hopefully for another 100 years!

Ed, we appreciate your time and insights into your organisation and the sporting business. There will again be more sporting brands on show at Licensing Expo in Las Vegas in 2016 and there may well be some more opportunities for Burley Sekem amongst them.

For more information visit www.sekem.com.au

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RUGBY LEAGUE

BE THERE WHEN HISTORY HAPPENS

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RUGBY LEAGUE AUSTRALIA’S NO. 1 SPORTS LICENSING PROGRAM

The Rugby League Licensing Program is Australia’s pre-eminent sports licensing program, retaining its status from 2015 as the largest and most successful sports program operating across Australia & New Zealand.

Off the back of the National Rugby League (NRL) continuing to evolve and build an ever-growing following for the game, the Licensing program enters a new phase in announcing a ground-breaking partnership with US brand, ’47, with licensed products to be available from November this year. The strength of the NRL as a sport and a brand sees it become a major international license for ‘47’, adding to their already strong portfolio of partnerships with the biggest sporting leagues in the US, including the MLB, NFL, NBA and NHL, and over 900 universities. ’47 is keen to grow its global footprint and become a favourite amongst sports fans and enthusiasts in Australia and New Zealand who continue to buy licensed products at record levels year on year.

There are many synergies in the new NRL/’47 partnership. ‘47 deems that its present-day success comes from never forgetting its roots and this is why one of the first sports licenses ’47 has acquired outside of the US is with the NRL, where pride and passion reign supreme. Born in the hustle and bustle of 1947 Boston, the business has grown from a single street cart to a premier sports lifestyle brand that uniquely melds sport and style.

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The NRL is confident that ’47’s famed headwear will be an instant success with fans. In addition to this, ’47 will roll out a Heritage range of apparel and headwear, a range of supporter wear built specifically for women, and a full range of athleisure apparel through its active wear brand, ’47 Forward. Whilst confident all products will find traction with the fans, the NRL is most excited about the women’s supporter wear.

It’s easy to see why ’47 selected the NRL as a licensing partner. The latest statistics for 2016 already show the NRL experiencing positive growth in a number of key areas. Club memberships have already hit record levels, up 13% year on year, with crowds and TV ratings also recording positive results of 11% and 20% respectively. The NRL is also harnessing this support for the game to further engage with its fans through social media. The exponential growth of the various mediums now shows that Australians are spending 1 in every 3 minutes on their mobile phone on either Facebook, Instagram or WhatsApp. Combined with a rapidly growing social media audience of around 8.9 million for the NRL, that’s a lot of people spending a lot of time on their phones viewing NRL content!

The success around the game’s audience figures is translating into direct results for the licensing program across the board. Innovation has been a key

Women make up 34% of Rugby League fans and we see this new product range from ’47 as a fantastic means to give female fans of the game a great combination of product quality and choice,” said Shaun McMartin, NRL General Manager - Consumer Business. Combined with the explosion in active wear globally, we are excited to work with ’47 to build an offering for our female fans that shies well away from the old “pink and shrink” philosophy and instead focusses on great quality, great fits and great designs.

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focus for the NRL and its current licensees, refreshing the market with new and unique products to continually engage fans as well as ensuring there is a genuine reason to buy new products or new versions of products they may have purchased previously.

One such initiative which continues to flourish is the NRL Micro Figurine collectibles program, exclusive to Coles. Going into its third year, there will be over 1 million Micro Figures produced. This year also sees exciting new product extensions too, including apparel, shopping bags, games and player inflatables.

The highlight of the extended range of NRL Micro Figurines without question has been the player inflatables. They have become an immense hit with fans, players, and media, featuring prominently on a wide variety of networks and press. The next stage of evolution for the NRL Micro Figurines that was recently released is Player Footy Mates. Launched to capitalise on the huge interest in the mid-season Holden State of Origin Series, Player Footy Mates bring to life some of the greatest Origin players to ever represent New South Wales and Queensland via interactive voice technology. Voiced by the actual players, including Queensland legend Johnathan Thurston and NSW Captain Paul Gallen, the limited edition figurines contain more than 50 sayings, make

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live comments during Origin matches and are sure to be a hit with supporters no matter their allegiance.

Looking ahead to the future there is more to come in 2017. The countdown is already on for the 2017 Rugby League World Cup, with the anticipation building ahead of the launch on October 26th, 2017.

With 14 teams playing 28 games over 5 weeks in three different countries (Australia, New Zealand and Papua New Guinea), the Rugby League World Cup 2017 is set to deliver the largest licensing program in the event’s history. Over 450,000 spectators are expected to attend the event alone, but in addition to this there will be a global television audience of more than 20 million, making the upcoming event the biggest and best Rugby League World Cup in the history of the Tournament.

It really is an exciting time for Rugby League. With the recent successes and upcoming licensing opportunities, it’s without question that we’ll continue to see the NRL program grow exponentially at home and abroad. Ultimately this will be a win for the fans who can continue to expect plentiful choice and quality products to support and be a part of the game they love.

For more information visit www.nrl.com

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LIMA Australia INTERNATIONAL LICENSING INDUSTRY MERCHANDISERS ASSOCIATION - JUNE UPDATE

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t’s been a busy start to the year for LIMA Australia. We are heavily focussed on continuing to build our membership base and we have devoted time to further explain and demonstrate the many tangible aspects of becoming a LIMA member to our market.

Whether it is News Services, Global Webinar Programs, Certificate of Licensing (CLS), Event Programs or LIMANET, all of these services provide members with a framework with which they can learn and grow.

guest speakers. We will again host a number of events in Melbourne and Sydney this year, ending the year with our Christmas gatherings. The LIMA Australia calendar is available online by visiting our website at (www.licensing.org/australia).

In March, LIMA Australia partnered with the Australian Toy Association (ATA) to once again bring our LIMA Lounge to the Melbourne Toy, Hobby & Licensing Fair for our members.

450 Industry Executives visited the lounge to meet with our members.

We are excited to welcome a number of new members to our chapter: • • • • • • • • •

Producto (New Zealand) Mills Oakley (Intellectual Property) HeadStart International (Distributor) Hunter Products (Distributor) Hunter Leisure (Licensee) Millar Inc. (Business Coaching) Scholastic (Publisher) Suli Wibisono (Trade Mark Specialist) My Design Group (Graphic Design)

LIMA Australia has been active in developing and running a number of industry breakfasts and events featuring professional panels and

Toys), Black Milk Clothing & Dr Who Leg-wear (BBC Worldwide), Peter Alexander & Sesame Street Sleepwear, Outer & Accessories (Haven Licensing) and Keith Haring & Artstar (Haven Licensing).

Educational platforms form an important part of LIMA’s commitment to the industry and the CLS is the pinnacle of licensing studies and provides graduates with a fully rounded understanding of the business. This year Australia has two new executives enrolled in the course with Nicole Cungue (Licensing Executive at BBC Worldwide Australia & New Zealand) and Suli Wibisono (Trade Mark Specialist - Coles Supermarkets) signing up for the course this year.

For those who are attending the show this year, there are a number of events which you should have registered in your calendar:

Our latest LIMA Licensing Breakfast was also part of the show with Major Sponsors Shopkins, Moose Toys & Merchantwise partnering with LIMA Australia to host a panel of experts.

The panel featured Paul Solomon (Moose), Paul Cannon (Caprice) and Georgia Sitiropolus (Big W) where they discussed “How Mega Brands Develop & Become Fully Realised at Retail.” 250 Industry people attended the event.

The LIMA International Licensing Excellence Awards Ceremony is one of the highlights at Licensing Expo.

Entries from around the world are submitted for each category and then awarded on Tuesday evening at the Expo. LIMA Australia has been fortunate to have four nominations this year with Shopkins (Moose

LIMA Annual Membership Meeting - Trade Winds Room A & B - North Convention Centre. Monday 20th June from 4.00pm - 5.30pm LIMA International Drop-In Event - Palm Foyer, Level 3, South Convention Centre. Wednesday 22nd June from 5.30pm - 7.30pm LIMA Awards Ceremony - Islander Ballroom - Tuesday 21st June from 5.30pm - 7.30pm LIMA members will again have access to the members lounge at Licensing Expo with meeting tables available for bookings during the show. You can book your meetings via Tony Bugg at by emailing tbugg@licensing.org.

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The Next Billion Dollar Industry THE GROWTH OF ESPORTS AND ITS EFFECT ON THE MARKETING OF CONSUMER PRODUCTS

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o the uninitiated, eSports – organised competitions where professional gamers battle each other for money – might seem like a peculiar thing. Nevertheless, this is a phenomenon often referred to as the next billion dollar industry, with global viewership expected to reach a staggering 335 million by 2017. Competitive in nature, eSports requires its practitioners to possess supreme reflexes and coordination skills, teamed with significant strategic and technical thinking, making it an exhilarating and often highly immersive thing to watch. Perhaps it comes as no surprise then, that the global market of competitive gaming is anticipated to reach $463 million in revenue by the end of this year, primarily led by North America where the majority is generated through sales of merchandise, event tickets, sponsorships, online advertising and media rights. In fact (and this is an astounding figure) the total eSports industry is expected to generate $1.1 billion in 2019 and considering that this is a mere three years away, this is a sector too significant to ignore 1.

For brands, there are many ways to capitalise on this thriving type of entertainment, both in terms of promotional partnerships as well as in the form of

consumer product opportunities. For example, leading energy drink manufacturer, Red Bull, has long been sponsoring professional videogame players but is now taking it one step further with the opening of its very own eSports athletes training lab2. As a company, Red Bull was early to recognise the enormous potential of the competitive gaming sector and as a result, has been able to build an authentic connection between the events and the brand. From a promotional perspective, the investment in eSports has granted the company access to a sizable audience of passionate and highly engaged consumers, making it a cost efficient promotion method compared to many traditional advertising channels. And in terms of long-term brand development, Red Bull’s leading position in the competitive gaming sector opens up a range of opportunities for them to launch branded eSports related products, either by themselves or in partnership with specialist licensees.

In addition, eSports athletes are increasingly becoming celebrities in their own right and this, of course, opens up additional opportunities for brands as it relates to collaborations and ambassadorships.

With prize pools often in the multiple million dollars range (the latest Halo eSports Championship’s $2.5 million dollar individual prize sum is apparently the largest so far in competitive gaming history) these gamers are increasingly receiving the “real-deal” celebrity treatment. For example, Danil “Dendi” Ishutin is one of the most well-known professional Dota 2 gamers on the planet, counting more than 284k followers on Twitter and with a brand ambassador partnership with SteelSeries, manufacturer of personal computer gaming peripherals, under his belt. As the world of eSports continues to evolve, I anticipate we will see Dendi and his colleagues launch their own ranges of consumer products, following in the footsteps of many a celebrity before.

Lastly, the growing popularity of eSports poses a significant opportunity for the actual videogames being played at the events, many of which already have significant consumer products programmes spanning over a wide array of categories such as apparel, accessories, gifts and toys. eSports

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tournaments, as well as streaming services such as YouTube Gaming and Twitch, have greatly contributed to increasing the visibility of these franchises, tapping into new potential consumer groups by making the brands available to people who do not necessarily play the actual games. As a result, titles such Halo, Dota 2, World of Warcraft and their likes have grown into incredibly influential entertainment powerhouses capable of launching branded product lines that compete with long-standing movie studio giants such as Disney, Warner Brothers and Marvel. Add to this an opportunity to market and sell these products at the actual eSports events, and you soon understand how the competitive gaming industry can impact a videogame’s chances of success when extending into additional product categories.

gratification make eSports an incredibly democratic form of entertainment; enjoyed simultaneously by millions of dedicated viewers in vastly different parts of the world. According to a recent report from The International Licensing Industry Merchandisers’ Association (LIMA), the extension of sports related properties generated a total of $26 billion in revenue in 20143. I look forward to seeing competitive gaming play a significant part in increasing this figure in years to come.

As a proud and long-standing gaming geek, I am (as you might have guessed) also a fan of competitive gaming tournaments. After years of diligently playing everything from Halo to Mario Kart, I have perhaps missed my calling as an eSports athlete, but I love how the events manage to bring communities of fans together, collectively enjoying something they all share a deep enthusiasm and admiration for. The thrilling, immersive format and immediate

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Dan Amos is Head of New Media of Tinderbox, the dedicated digital division of leading global brand extension agency, Beanstalk. For more information, visit www.tboxgency.com or follow us on social media:

Sources: 1. www.eurogamer.net 2. www.fortune.com 3. www.licensing.org

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