Telecommunications provider Swift Networks Group (ASX: SW1) has unwrapped a timely move into eSports broadcasting courtesy of a deal with cinema chain HOYTS for up to 6 years.
The exclusive distribution agreement stipulates a “shared revenue model” from all associated ticket sales between Swift and HOYTS and sports an initial contract term of 3 years, with the parties holding an option to extend the agreement for a further three years, depending on the commercial success of the venture.
In effect, the deal means Swift will enable HOYTS to broadcast continued coverage of various eSports events and tournament footage at its network of 50 cinemas and 430 screens across both Australia and New Zealand.
Swift eSports deal
Last week’s deal follows Swift’s own milestone content license and distribution agreement with US-based eSports media company, Real Big Hits – a deal that handed Swift live broadcast rights to some of the world’s most sought-after eSports content.
In parallel, HOYTS is also keen to expand its market coverage by appealing to a growing gaming industry with the recent launch of its dedicated eSports division as part of a $300 million capital investment, through which it plans to stream weekly eSports events across its cinemas.
According to HOYTS general manager Scott Russell, the cinema chain recognises that eSports is a rapidly growing market and wants to be at the forefront of providing this content to its customers.
“Securing this exclusive in-cinema deal with Swift will allow us to stream some of the most popular eSports such as Fortnite and League of Legends across our network of Australian cinema outlets, and in doing so, support HOYTS’ drive to become the standout destination for eSports fans to enjoy top class action all year round,” said Mr Russell.
For Swift, the move into eSports is a neat diversifier for the company which currently serves a range of clients by providing premium multi-lingual content from around the world via its proprietary cloud-based platform.
Its prime services include free-to-air and paid television, telecommunications, Internet services and wireless networks — streamed via video on demand including content from some of Hollywood’s largest studios.
The telecoms company has on several occasions said that it empowers its clients to watch, play, connect and interact and provides accommodation providers with meaningful insights and opportunities to drive new business.
Last week’s move into eSports represents an entirely new avenue for the company and indicates the strong commercial potential made possible by distributing digital content to a variety of audiences.
“Signing this deal with HOYTS on the back of securing our eSports content licence and distribution agreement with Real Big Hits demonstrates the strong interest in the growing eSports market,” said Xavier Kris, CEO of Swift Networks Group.
“HOYTS is a clear leader in the cinema distribution industry, and through this partnership we are excited to reach new audiences as we help HOYTS to execute its eSports growth ambitions,” he added.
The emergence of eSports
eSports is a fairly new industry niche that involves multiplayer video games being played competitively in front of spectators by professional gamers.
According to Goldman Sachs, eSports now has a monthly global audience of about 167 million people, but this is expected to grow by 65% over the next four years to 276 million viewers by 2022.
It has one of the fastest growing fans bases in professional sports, and the audience size “already rivals that of Major League Baseball in the United States,” the bank says.
Not only is the eSports audience growing strongly, but it is also attracting the younger generation including millennials – considered to be one of the largest consumer spending niches in Asia.
Industry research shows that around 79% of viewers are under the age of 35 with Asia being the home to the fastest growing audience, whereby viewers typically watch eSports on platforms such as YouTube and Twitch, two online platforms which have fuelled the growth of the eSports phenomenon to date.
However, a shift towards physical premises is also on the cards as evidenced by the successful Melbourne eSports Expo held earlier this year at Rod Laver Arena, attracting around 20,000 spectators.