The Future of Livestreaming: Music and Sports

There have been a handful of recent livestream deals in music and sports. NBCU tapped Twitch to produce and deliver live content that will live on a new NBC Olympics Twitch channel for the 2021 Tokyo Olympics. And Warner Music invested in virtual concert platform Wave, and Deezer invested in live concert platform DREAMSTAGE. We break down the power of "live" via 4 success pillars, and how livestreaming will impact the future of these two verticals. 

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EPISODE TRANSCRIPT:

Chris Erwin:

Andrew, have you been tracking some of the Livestream deals over the past couple of weeks? I think I saw something about Twitch and NBCU and Warner buying a stake in Wave. You've been tracking this?

Andrew Cohen:

Yeah. No just over the past couple of weeks, but it seems like ever since the beginning of lockdown last March, we've been seeing more and more Livestream news happen every week.

Chris Erwin:

It's pretty wild. Yeah, we actually have a little shout-out to our website. If you go to one of our blog posts, we have a Livestream watch list. You can go see all the recent fundings out over the past year, 18 months or so.

Andrew Cohen:

Always be plugging.

Chris Erwin:

Always be plugging. Okay. There's a few that stood out. So one in particular was this partnership between NBCU and Twitch, and so NBCU has the exclusive live rights to the 2021 Summer Olympics in Japan. And so NBC is tapping Twitch to produce and deliver live content that will live on a new NBC Olympics Twitch channel for the summer games. It's going to include Olympics theme content. It's going to have daily unique Twitch-produced content, such as daily interactive clip shows, daily competition among three teams of Twitch creators, and primetime side casting and a live from Tokyo segment. I think there's a cool quote from one of the deal-makers here that says "The way that people consume traditional sporting events is changing. They no longer want to simply spectate. They want to be as close to the action and athletes as possible, and that's what Twitch is bringing to the mix."

Chris Erwin:

Just a couple of other quick deals. Warner bought a stake in a virtual concerts platform called Wave, and a Paris-based music streaming startup called Deezer took a minority stake in DREAMSTAGE, a live music streaming startup. So a lot of activity here, and I think, Andrew, something that you've thought a lot about and written about is, why is this happening? And you've captured four interesting pillars, so I think it could be fun for you to break that down for our listeners here.

Andrew Cohen:

So, really what we're saying is that across all these different verticals, live media is becoming more and more valuable. We think that live media is defined by four pillars, all of which evoke a deeper level of audience engagement and thus valuable.

Andrew Cohen:

Pillar number one, it's moment driven, which drives tune in. So the fleeting nature of live content and of live moments creates a sense of urgency for viewers. Each live event holds the potential for a completely unique moment, a new unique experience, so you tune in. There's real urgency around that versus something that's on-demand.

Andrew Cohen:

Pillar number two, we're calling the FOMO factor, which drives lean in. So it's that fear of missing out on a memorable moment that keeps users glued to the action because the next moment may always be that "can't miss" moment that everyone's going to be talking about, which is why in part consumers watch live video for 10 to 20 times longer than they do on-demand content.

Andrew Cohen:

Number three, authenticity, which drives form of connection. It makes users connect. Really, live content is, by nature more authentic as opposed to scripted dramas on HBO or the meticulously rehearse and edited videos on TikToK, or even the highly dramatized reality shows on TV. The memorable moments that make live entertainment special tend to be organic and unscripted, and this authenticity evokes a deeper and more intimate level of audience connection, which is just the ultimate currency. Live video, it engages viewers in this immediate and authentic way that other format just can't. We see that with podcasting as well, where it's known as just a really immediate and intimate medium, and because of that, advertising is more lucrative there because it fans really feel like they're connecting with the hosts.

Andrew Cohen:

And wrapping it up, pillar number four is that it's social, which causes users to share. So viewers feel like participants in live content rather than just passive observers. The communal experience of live consumption to a group of friends and strangers with a common passion engaged in a shared moment, it's inherently social. So from watch parties, to water cooler recaps, live events have always inspired communal engagement, and now social media has become the world's biggest watch party, the most active water cooler. And so, viewers, they share clips and they discuss content in real-time across social media, promoting the event by not only evoking the sense of FOMO in those who aren't launching it, but also by inspiring those who are watching to engage more deeply and contribute their own point of view to the conversation.

Andrew Cohen:

On a typical Sunday afternoon in the fall, the top 30 trending topics on Twitter are all related to the NFL games that are underway. This unique interactivity of the live medium, I think amplifies this already heightened form of audience connectivity and just results in a collective level of sustained engagement and real time peer-to-peer promotion that's nearly impossible to replicate on static on-demand mediums.

Chris Erwin:

Cool. I really like those four pillars. I always say, Andrew, I think you have a knack for putting things into a really clear framework for our listeners or readers, so kudos on that.

Andrew Cohen:

Well, thank you.

Chris Erwin:

We describe what's happening in deal activity in this space. You just explained why there's all this activity with these four pillars. So I think what's now most interesting is how is Livestreaming going to evolve different industries? And so we've seen a ton of different capital flows, as well as partnerships, around a lot of different industry segments, in sports, in social media, in shopping, in music, in fitness and so much more. That can easily take a whole nother three-hour podcast. I think what we want to focus on for today is specifically targeting music and sports.

Andrew Cohen:

Don't get us started on Livestream shopping or this microcast will quickly become a macrocast.

Chris Erwin:

Yeah, that's true. We're going to save that for probably not one single microcast, but a bunch of others. So let's dive into music and sports. This is cool. I'll talk about music. A peer had sent me a demo of their new, I think, alpha or beta product over the weekend. It's a virtual VR concert startup. I felt like the energy that it evoked from its technology was so cool, got me more excited about the space. In speaking of frameworks, I think for music, there's three things that stand out that I see. Scale and speed, personalization and access, and new revenues. So let's just quickly dive into those.

Chris Erwin:

Scale and efficiency. I think there's a lot less financial and physical burden on the artists who can perform in front of millions of fans in multiple countries all in a single event, and they can even stand up shows to meet new demand rather quickly and at lower costs. I think there's a great example that we were talking about before, that's with Travis Scott breaking down. Let's talk about his live touring schedule in 2018 to 2019. 55 live shows over four months of travel, reach 850,000 fans and grow 64 million in revenue. Now let's compare that to his 2020 Fortnite shows, four virtual shows, one weekend, no travel reach, 28 million fans. That's like a 35X multiple relative to his previous live tour and 20 million in revenue. So when you compare just the time and commitment versus the revenue, it's really, really compelling.

Chris Erwin:

I think there's also an angle that it goes like the same things for the fans. Fans who spend so much time and money on getting to a venue, whether it's driving there or flying across borders. Now with virtual concerts, more time and money can be spent on enjoying the moment with the artists and supporting the artists versus the getting there. And I think that supports a whole bunch of new revenues.

Andrew Cohen:

Yeah, and I think it's important to realize too that, much like all live streaming, it's not one or the other. I really think that there's a world where the two can be complementary. We saw earlier in the year Fortnite announced that they're opening up an island that's just for live concerts, and they want it to kind of become a new destination, a new stop that artists have on their tour. So they could do 55 live shows around the world like Travis Scott did, but then also do a few shows on Fortnite, and the two can be complementary. You can start off with Fortnite to reach a massive audience and reach new fans, promote an upcoming tour. And then maybe that will inspire fans to come out and buy tickets to see you in person when you come to their town, can really be synergistic that way.