The Pro View service will be launched this Summer, and will be available for both the League of Legends League Championship Series (LCS) and the League European Championship (LEC). The key feature of the service allows spectators to switch between up to 10 individual player point-of-view streams during competitive matches, but it also allows synchronized group viewing experiences and access to a customizable split-screen system whereby viewers can watch up to four streams at once.
Expanding revenue streams for League of Legends teams
This is the next step in Riot’s revenue-sharing program, and comes just days after the announcement of the premium Fan Pass and Team Pass features, which share 50% of the revenue with the teams. The passes are region-specific, and give fans access to special missions, through which they can earn in-game cosmetic items. Previous, similar initiatives have been limited to major esports events, but the Fan Pass and Team Pass are available throughout the regular League of Legends (LoL) season – allowing fans to support their favourite players continuously. This represents a minor contribution to the sustainability of LoL esports moving forward.
The economic rationale for differentiating the viewers has a solid base too. The guarantee of an additional revenue source, although diverted to the teams themselves, will ultimately improve the quality of the service provided and benefit the fans and the players – furthering Riot’s community-centric vision for the game.
Despite haemorrhaging funds, Riot remains committed to supporting teams
The Pro View service will cost $14.99 for access to a single league, or $19.99 for both, and the resulting revenue will be shared amongst the competing teams. The LoL creator has stated that despite spending upwards of $100m per year on esports growth, it is a long way from breaking even, but it has no plans to stop investing any time soon.
Offering different tiers of subscription is nothing new in the sports industry and it shouldn’t be surprising at all to observe this practice adopted in the esports industry either.
Product differentiation does not imply demand disruption
Both the LCS and the LEC tournaments will be available to stream for free on Twitch and YouTube, on top of the official LoL platform, and they will also include the Pro View option.
Adopting a system of price discrimination should be almost risk-free for Riot Games, as those viewers who have a higher willingness to pay for a better service will be allowed to do so, while those who prefer the standard (and free) version of the two events still have this opportunity. The risk of cannibalisation of the internal demand should, therefore, be prevented and the core business model of Riot should not be disrupted.
Further revenue sources likely to be explored as esports waits for its pivotal moment
The entire esports industry has been growing at an incredible pace, but the commercialisation of media rights of esports on TV is still to explode, as the esports audience has yet to achieve the critical mass necessary to reach the traditional media. In the meantime, tournament organisers are exploring alternative sources of revenues and the premium view experience seems to be a safe route to take.
These latest announcements serve to realise Riot’s long-term vision of making its esports endeavours financially sustainable over the coming years. It is setting the foundations for a self-sustaining esports ecosystem through revenue sharing, a trend which has also been picked up by other titles in the space such as Rocket League and Rainbow Six Siege. However, with profitability seemingly so distant, the question seems to be: are Riot able to maintain the flow – of both cash and sweat – via such initiatives, and avoid running dry before the scene really fleshes out financially, if at all?