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News
Las Vegas Sports Betting Giants Roll the Dice on Hollywood
Talent - June 22nd, 2022
As
online gambling expands throughout the U.S., Caesars,
DraftKings and FanDuel are spending big on entertainment
deals in order to draw in more consumers.
ILLUSTRATION
BY VICTOR KERLOW
Hollywood
has come to accept that content is the primary weapon
in the streaming wars. Quietly, as legalized online
sports betting spreads across the country, content
also has become the weapon of choice for digital casino
operators and betting firms looking for that edge
in what has been an expensive grab for consumer dollars.
And content creators, from production companies to
podcasters to established TV talent, are cashing in,
The Hollywood Reporter writes.
“It
is the streaming wars version for casino operators,”
former Wall Street analyst Hal Vogel says.
Online
sports betting has been on a steady expansion across
the U.S. since the 2018 Supreme Court ruling in Murphy
vs. NCAA paved the way for states to permit the practice.
As each state legalized access to sports betting (it’s
legal in 21 states, with another nine pending and
others expected to follow), gaming operators jumped
into the space, both digitally native firms like DraftKings,
and legacy casino brands like MGM and Caesars. Even
media companies entered the fray, with Fox launching
FoxBet in partnership with Flutter (now owner of FanDuel).
But
the expansion has proved to be expensive, with each
state launch requiring a local marketing blitz. As
anyone who lives in a state that has legalized sports
betting in the past year or two would tell you, as
soon as it becomes legal, TV ads, targeted digital
marketing campaigns and mailed flyers proliferate.
So gaming companies have turned to content as a point
of differentiation. The result has been a flurry of
deals covering podcasts, social media content like
TikTok videos and Instagram pages, and even talent
deals, as athletes, entertainers and sports media
celebrities sign on with various gaming firms to produce
original content.
Most
recently, Caesars Entertainment, owner of the
famed Las Vegas casino resort and the Caesars Sportsbook
mobile app, inked a deal with Peyton Manning’s
Omaha Productions to produce video and podcast content
for its various platforms. “Caesars’ big
bet is that Peyton drives his rabid audience to its
gambling platform—and keeps them there, and away
from others,” says Peter Csathy, chairman of
advisory firm Creative Media. “It’s all
about customer acquisition and customer retention
in an increasingly hyper-competitive online and offline
world of gambling, gaming and crypto.”
“We
do believe that consumers are smart, and it is much
better to engage them with content and to let them
get to know the world we are creating,” Caesars
Sportsbook chief marketing officer Sharon Otterman
says. “You don’t have to keep hammering
them over the head with this offer or that offer.
It is a strategic way to build a relationship with
customers, and to respect both sides of the equation.”
It
is, in the words of a finance world source, a “wash,
rinse, repeat” cycle. Players come into the ecosystem
because of the content, play, and then, hopefully,
stay.
If
anything, Caesars’ deal with Manning and his
production company is the culmination of a years-long
effort by betting firms to differentiate themselves
through content. Penn National Gaming acquired a sizable
minority stake in Barstool Sports in early 2020, and
plans to become majority owner of the company next
year. In addition to Barstool content like original
podcasts, Penn also launched a Barstool-branded sportsbook.
Pat
McAfee, the popular radio host and YouTube creator,
inked a nine-figure deal with FanDuel last year to
bring his program to the betting company’s platforms.
BetMGM struck deals with The Athletic, now owned by
The New York Times, and Yahoo Sports, and Caesars
hired former ESPN anchor Kenny Mayne in a content
role, to name just a few deals.
Otterman
says the company moved into content after it found
that customers were tiring of the “transactional”
experience of betting apps, with users saying the
space “felt more like a bank than the experience
when you first walked into Caesars Palace.”
Users
enjoy and relate to talent and content on a different
level than they do a game or betting app, and betting
firms are more than willing to pay to secure that
relationship for themselves. So far, many of the deals
involve podcasts, and in particular podcasts that
touch on sports, where the betting company is the
presenting sponsor (and can also sell ad space). With
sports podcasts already a top genre and betting already
a frequent topic of conversation, the deals have proliferated.
But deals for video content (again, usually sports-related),
distributed on social platforms, YouTube, or within
the apps and websites of betting firms, also have
become more frequent.
Former
ESPN talent have been in particularly high demand.
In 2021, DraftKings inked a multiyear deal with Meadowlark
Media (co-founded by former ESPN chief John Skipper)
to sponsor and distribute former ESPN radio host Dan
Le Batard’s podcasts in what’s been described
as a mid-eight-figure deal. “It is not a big
leap for these companies to invest in media, because
it gives them alternate ways to diversify their revenue
streams, but also build their own audience and content,”
says Meadowlark Media COO Bimal Kapadia.
But
more than anything, it’s about getting those
consumers into their own ecosystems. “It really
is all about collecting those email addresses,”
says Joe Favorito, a sports media consultant and adjunct
professor at Columbia University. Increasingly, content
is becoming the most cost-effective way to achieve
that result. As a high-level source on the content
side of the business tells The Hollywood Reporter,
online sports betting has “reached a point where
the street wants to see ways that are less cash-intensive
to raise awareness and increase engagement for their
platforms.”
With
much of the country on board or likely to launch legalized
online sports betting in the next year or so, the
localized land grab is giving way to more efficient
national campaigns. “The rapid growth of our
footprint has opened up scale efficiencies that make
some national initiatives accessible and attractive,
whereas previously they were uneconomic because there
was leakage into states where we were not active,”
BetMGM CEO Adam Greenblatt said at the company’s
May 12 investor day.
That
efficiency becomes more necessary as the country stares
down a possible recession. Consumers are tightening
purse strings, and sports bets could be an easy expense
to cut. That environment could make content investments
even more important, thanks to their inherent stickiness.
Even if people don’t make bets, they are likely
to keep listening to podcasts or watching funny videos
created by Manning or Mayne (like Mayne’s “Betting
101” series for Caesars, which uses his quirky
sense of humor to introduce betting concepts to users).
“Dan’s
voice, whether it is in a bear market or a bull market,
is still relevant to his fanbase,” Kapadia says
of Le Batard’s loyal audience.
And
the economics of the deals also work to help betting
firms amortize their costs by selling other ads on
owned podcasts or videos, or reselling content elsewhere
if so desired. “If betting companies can have
their own content, or licensed or partnered content,
they have an ability to lower those [consumer acquisition]
costs because they can then recoup it through their
own ad sales, their own licensing deals, their own
partnerships,” Kapadia adds.
Another
content-side source notes that the strategy has already
proven itself in between major sporting events, when,
as one would expect, sports betting slows down. But
consumers keep engaging with the content and return
when things pick up. While a recession is certainly
a different beast, the strategy shares a North Star.
“We
have no ambition to be a media company, that is not
what we do,” Caesars’ Otterman says, adding
that increasingly the worlds of advertising and content
are converging, “and the best way that you can
make sure a potential customer knows what we stand
for, and to have an emotional connection to us, is
to be immersed in our content.”
And
just as companies like Netflix, Disney, Paramount
and NBCUniversal have found themselves in bidding
wars for top-tier comedy and drama talent, betting
firms are finding that authentic content from established
names could be their ticket to consumer cash. Or at
least their email addresses.
“Gambling,
gaming and crypto share the same opportunity—and
same dilemma,” says Csathy. “Consumers are
willing to spend massive amounts of dollars, but they
first need to know where to go spend that money.”
Media
Man
Movie
Gaming
Can movie theatres and online streaming live side
by side?
It’s been a tough time for movie theatres around
the world with a number of factors contributing to
the decline in the number of people heading to the
cinema to watch movies. In a world that is embracing
digital technologies, the movie industry is in danger
of getting left behind unless they quickly embrace
the technologies available that will get people excited
to return to movie theatres and get the enjoyment
of the cinema experience once again.
The
rise of the video game industry
Whilst
there are plenty of factors that are influencing people’s
decision to visit the cinema, there is no doubt that
the rapid rise of the online video game industry is
a large contributing factor. People are starting to
look elsewhere for their entertainment and online
video gaming provides a lower-cost alternative to
a trip to the cinema.
A
report by MarketWatch in 2020 found that the video
game industry is now bigger than the sports and movie
industry combined. Just take a minute to digest that.
Bigger than movies and sports - that’s big.
The
news outlet reported that global video game revenue
is expected to increase 20% in 2020, making $179.7
billion, according to data from IDC.
The
biggest gain is expected to come from mobile gaming,
according to the news outlet, which is expected to
surge 24% to $87.7 billion. Part of this is due to
China recently lifting a ban on gaming consoles.
Game
console revenue is expected to soar to $52.5 billion
this year, while PC and Mac games are expected to
make $39.5 billion.
In
their most recent report, MarketWatch
reported that whilst overall revenue was expected
to grow by 11% in 2021 to $251.39 billion, the forecast
for 2022 is just a 2% growth and a flattening out
of that rapid growth over the past two years.
Is
this a potential opportunity for cinemas to reclaim
some of that lost audience share?
Early
signs look good for cinemas in 2022
If
the latest movie releases in 2022 are anything to
go by, it looks as though the movie theatre industry
is not ready to give up just yet. Spider-Man: No Way
Home became the biggest
grossing movie of the past two years, grossing
over $US1 billion ($1.38b) in the first two weekends.
It is the second-fastest film ever to reach the $1
billion mark and suggests that this could be a big
year for cinema-goers.
Following
in its footsteps is another 2022 release, The
Matrix Resurrections, a movie that grossed $US12
million in its opening weekend.
Whilst
this is a great start to the New Year for movie theatres
around the world, it remains to be seen whether this
is a trend that continues throughout the year. With
a number of high profile movies due for release in
2022, this could be a time for cinemas to really cash
in.
The
impact of streaming and long-form content
It
is unlikely that cinemas will have it all their own
way in 2022. Whilst it is great to see people returning
to movie theatres to watch the latest releases on
the big screen, there is no question that home viewing
is here to stay.
As
more studios and media distributors are developing
their own direct-to-consumer streaming services, this
starts to eat into the revenue of major studios.
Studios
derive almost half of their revenues from theatrical
releases. Although the average number of movie tickets
purchased by Americans each year has declined from
4.2 in 2009 to 3.4 in 2019 (Source: Deloitte),
studio revenues are driven more by box office tickets
now than they were 20 years ago.
Streaming
is having the biggest impact on people going to the
movies. As televisions have improved, where you can
now watch movies at home in 4K high-definition on
screens with sizes up to 100”, with surround
sound, people have become more willing to wait for
the latest release movies to become available on streaming
services including Netflix,
Amazon Prime, Disney+, and Stan.
Another
major impact on the cinema industry is the consumer
switch to long-form content in the form of series.
Many people feel there is more depth to a series that
contains anywhere from six episodes upwards. Game
of Thrones was one of the groundbreaking series to
really capture the audience’s attention, however,
there are so many amazing series now that it is becoming
more difficult for movies to compete with the depth
and the character development that a series can bring.
Huge
series like Breaking Bad, The Sopranos and more recently,
Succession,
have really captured the attention of audiences around
the world and this is something movie producers need
to consider.
The
entertainment factor
It’s
not just video games and streaming that are competing
for people’s attention. Another industry embracing
technology is the online casino and betting sector.
Here, we have seen huge advancements in the way people
are able to game online. One company leading the way
in the sector is Betway, “Developed by our exceptionally
talented people, Betway
creates market-leading, cutting-edge interactive gaming
experiences. We bring people closer to the action
– putting them at the centre, making them feel
a part of it.”
From
the introduction of in-game betting to the development
of new and exciting interactive games, these online
gaming sites are leading the way when it comes to
embracing new technologies that can lead to better
experiences for customers.
The
movie industry is at a real crossroads. With competition
coming from every direction within the entertainment
industry, studios and distributors need to find a
way to either a) get more people back into movie theatres
or b) look at alternative ways to ensure that movies
can compete with online gaming, live sports streaming
and online casinos for a share of customer eyeballs.
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