This month Logan Paul fought Floyd Mayweather in an exhibition event, drawing 1 million PPV buys and generating $50 million in revenue. It's yet another datapoint in the growth of made-for-social creator competition series, which represents the exciting intersection of social media stars and sport.  We discuss the breakdown of PPV vs ad-supported models, how House of Highlights' Showdown series drove over 100 million online views, the need for real competitive stakes, Triller's $500 million capital raise, and re-defining sport as we know it. 

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EPISODE TRANSCRIPT:

Chris Erwin:

So Andrew, we're seeing a lot of activity around the made for social creator competition, sporting events.

Andrew Cohen:

Yeah. No, it's really cool. It's definitely a perfect storm of all the things that get us excited between the creator economy and sports media and live streaming. It's definitely something I'm excited to chat about.

Chris Erwin:

And this is something we actually covered in our RockWater blog. In November 2019, there was a second Jake Paul KSI fight. Now just looking out over the past year and a half, the space has really grown and it's really evolved.

Andrew Cohen:

Come a long way for sure.

Chris Erwin:

Yeah. A few things to break down here. Before we go into some of the recent market activity there's a great quote here from Doug Bernstein, the GM of House of Highlights. So he notes, "Creator competition is a new category unto itself, almost akin to e-sports." I think that's well put. So there's a couple of different types of models we're seeing here. I think we broke it down simply into those that we look at as pay-per-view versus those that are ad supported.

Chris Erwin:

So let's talk about a big recent pay-per-view fight. That was the June 6th Logan Paul versus Floyd Mayweather. Generated over a million pay-per-view buys on Showtime, generated around 50 million in revenue. Of notes, there's only about 25 boxing matches in history that have seen that many pay-per-view purchases. And the fact that it was an exhibition, like no judges, no winner, it's even more impressive. We'll talk more about that. Also, on June 12th, there was the YouTube versus TikTok fight on LiveXLive. And then in April, there was the Triller Fight Club series of Jake Paul versus the former MMA fighter Ben Askren. There's many more on this list, but let's talk about a few of the ad supported creator competition events we've seen.

Chris Erwin:

So a prominent one is House of Highlights. I think just last week they did their third installment of the Showdown Series, a dodge ball knockout event. The first two, which I think were in earlier this year, or even in 2020, were basketball and golf. And these were done live on YouTube and supposedly the first two events garnered over a hundred million online platform views, just striking number. Another event of note last year is Mr. Beast Creator Games that actually became YouTube most watched live original of all time. So I think the first one was in April of 2020, had 662,000 concurrent viewers for a virtual rock paper scissors contest, and I think they did another one in October. So there's more here. Bleacher Report did The Match, which is a golf showdown and a handful of others. But I think the bigger question is Andrew, why are we seeing so much market activity around, is this even a trend or probably something that's more permeant?

Andrew Cohen:

It's starting as a trend, but I think it's here to stay and it's going to turn into something more legitimate, sustainable. But really overall, when you look at it holistically, it seems like the worlds of sports and entertainment are merging. On one side we have traditional sports that are using shoulder programming to fuel storytelling and to engage new audiences. And then on the other hand, like we're seeing, everything you just mentioned, social creators using sporting events as kind of bottom funnel activations to eventize and monetize the culmination of internet trauma that they're able to create.

Andrew Cohen:

So Chris, what do you think it is about these social creators that make them so perfect to generate all this excitement for live events?

Chris Erwin:

So, Andrew, I think that there's a few key dynamics to note. I think these digitally native creators are the most polarizing and engaging personalities of today. And what we've known through a lot of our research and work is that we're in the world of personality led content. And that type of content reaches more younger audiences globally, particularly millennial and Gen Z, than any other type of content. There's also the ability for these digitally native creators to interact with their fans. It's a real two-way street that's very unique. And I think really importantly, there's this always on dynamic, where the creators are logging to their social channels 24/7, that becomes an always on promotion cycle to fuel excitement around these sporting events. I think this is a really key takeaway here that younger audiences are more passionately loyal to their favorite creator personalities then they are to their hometown team or even to traditional celebrities. So specifically these Gen Z sports fans are more loyal to athletes than teams, favoring athletes over teams by a margin of two to one compared to baby boomers. That's a big stat.

Andrew Cohen:

Yeah, it's crazy. And I think that explains a lot of the moves that we're seeing on the other end of the spectrum by sports leagues who are really making an effort to use storytelling and kind of drama and personalities surrounding the event to drive tune in and fuel engagement. So I think a great example that we're seeing recently is what Formula 1 is doing with their Netflix show, which has become my favorite soap opera to watch. And as a result, Formula 1 viewership in the US has gone up 36% year over year, just this year. And I think that's because people feel connected with the personalities and with the storylines and that makes them kind of want to tune in and see how it all plays out on race day.

Chris Erwin:

I feel like everyone I talked to asked me, have you seen the Formula 1 show on Netflix? It's definitely feels like it's become part of the zeitgeist.

Andrew Cohen:

It's crazy. Yeah. The hype is real and it translates to that viewership. So we're seeing other leagues go for this as well. The NBA is definitely the most popular sport among Gen Z in large part because it's such a personality focused sport. No one's wearing helmets, it's really the stars are front and center. And the NFL, even though it has the highest ratings, it's kind of losing this next generation of fans because the players don't have that same level of visibility. It's why they're doing a ton on social media, they're owned and operated brand the Checkdown which is kind of like their version of House of Highlights to take the helmet off the players and to make these personalities more front and center because that's how you get young fans kind of engaging with that live product.

Andrew Cohen:

And we're seeing other leagues do this as well. The PGA just recently announced their new Player Impact Program, which is a $40 million pool that's going to be distributed to the 10 golfers that generate the most fan and sponsorship engagement. So again, incentivizing their athletes and be front and center and to be personalities because that's how you bring fans in. And really everyone is kind of replicating this, but the originator is WWE. They have been built on kind of using even before social media kind of creating the soap opera that surrounds the mash to drive that pay-per-view tune in for tent pole events. So now we're kind of just seeing this happen on a bigger scale and it kind of merging with the new soap operas of the digital age, which is social creators.

Chris Erwin:

To boil that down, Andrew, tell me if I'm hearing this right, that sports leagues need to borrow the tactics of social influencers to generate that top of funnel awareness and engagement. And then on the flip side, the social brands, publishers and creators need to adopt the competitive event formats of pro sports to really build out that bottom funnel monetization for all the hype and all the attention that they're really able to generate across these new useful audiences? Is that kind of encapsulate it?

Andrew Cohen:

Correct. That's what I'm seeing.

Chris Erwin:

So then, okay. As we work to wrap up this micro cast, I think the next big question is how is this going to evolve going forward? Is this a trend or is this something of more permanence as we were raising before? And what are some of the things that you're seeing, Andrew?

Andrew Cohen:

I definitely think it's here to stay, but there need to be some changes that are made to kind of make it more sustainable versus just a bunch of one-off events. And I think one big thing that sticks out to me is the need for true competitive stakes and for these formats to evolve so that there really is a sense of stake on the line at the events themselves. So we're seeing it's kind of easier for leagues to create that authentic pop funnel storytelling because the dramatic stakes and the personalities are already inherent to sports. So it was really just about finding the most effective