Manatt Digital and Technology

Manatt Digital—eSports Startup Launchpad

We are proud to announce our partnership with Narus Advisors in sponsoring the Manatt eSports Startup Launchpad. This pitch competition is designed to explore what creative minds are developing in the emerging eSports industry, which is bursting with entrepreneurial opportunity.

The eSports Startup Launchpad will be a featured part of the eSports and Casino Resorts conference at the SLS in Las Vegas on October 25 and 26. Startups will be able to submit entries through October 4. Several finalists will pitch live at the conference, with a $50,000 services package going to the winner.

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GamesBeat 2016 Recap

By Jacob Carlson

This year's GamesBeat conference was held August 1-3 at Terranea Resort in Palos Verdes, and Manatt Digital was there to take in the panels, networking, and stunning views. The gaming industry has been particularly visible lately thanks to the success of Pokémon GO, which featured heavily at this year's conference.

Niantic Labs CEO John Hanke discussed Pokémon GO's evolution in the future and his vision for users interacting more with their environment and less with their phones. In general, he sees augmented reality (AR) becoming much more prevalent, with technology allowing for a more natural intersection of AR and reality.

One of the key takeaways was the overwhelming positive take on the future of games, with eSports and AR/VR experiences only enhancing the gaming industry. There are so many ways for consumers to play, view, and interact with the gaming community that the overall industry is going to continue to grow.

eSports in particular was at the forefront of most conversations during the conference. It was clear that finding ways to bring eSports to the mainstream was a key to its continued success. Traditional sports have provided many paths for eSports to follow and innovate on, but developing stories and content around the players is one area that stands out. If audiences care about the players' personalities and rivalries, it provides more must-watch opportunities and will hopefully attract more viewers.

Another common thread was the view that the technology currently on the market is just the beginning. Executives with inside access attested to experiencing even more transformative content with in-development technology and games. We can't wait to ride the next wave of tech and the content that goes with it.

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Live-Streaming: Accelerating Digital Media's Transformation

By Jordan Pritchett

The media and entertainment space is evolving faster than ever in tandem with our seemingly exponential rate of technological progress. As such, there have been numerous contributing factors one could point to that are concurrently serving as the drivers of this accelerating progression. Certainly, the commercialization of virtual reality and its distant cousin augmented reality has received a great deal of attention to date. Even the swift rise of eSports into the mainstream is a topic worthy of consideration. However, one matter that has flown somewhat under the radar, given its profound and widespread impact on the way in which we consume and disseminate media, is live-streaming and its inherent capabilities.

As an idea, live-streaming is nothing new and has been well covered since 2007. Advances in data transmission rates and display/audio resolutions have been ongoing since that time and have come a long way since the early days (think grainy, lagging Skype calls or the initial iterations of MLBAM). More importantly, embedded within that progression, live-streaming has cemented itself as a viable and differentiated source of content and has played an important role in growing one of today's most sought-after demographics: the "cord-cutters" and the "cord-nevers."

The focus on this particular segment of the market is born largely as a result of its explosive growth in recent years. That growth is expected to continue moving forward. By 2025, Forrester is predicting that 50% of adults under 32 will not pay for cable. This sobering prognostication has pushed many establishment cable providers to begin diversifying their content offerings through a mix of OTT platforms/skinny bundles and live-streaming options that provide encompassing access to major sporting and live events.

While a full-fledged departure from the cable box is not something that we can expect any time soon, the short term has yielded meaningful progress as it relates to the diversification of content. Many traditional players have begun incorporating live-streaming as an added component of their overall content strategy, frequently using it as a value-add for existing primetime programming. Major award shows such as the Oscars and the Grammys now offer live-streaming feeds as an alternative for online viewers, one benefit being that it expands the broadcast footprint beyond just television and into desktops, laptops and mobile. The content itself remains largely unchanged, but these live feeds are also unique in their ability to provide behind-the-scenes/bonus content in addition to a wholly differentiated viewing experience. Most recently, YouTube live-streamed both the Democratic and Republican Conventions in 360-degree (spherical) video and essentially passed the baton to the viewer in terms of where and what the focal point should be in terms of the broadcast. This is a valuable feature given our current political climate. Taken together, these new features provide for an enticing mix that has only further compounded live-streaming's growing popularity.

Super Bowl 50 served as an interesting case study for this ongoing pivot. This year, 3.96 million people live-streamed the Broncos' victory over the Panthers, up from 1.3 million the year before (an increase of over 200%). Furthermore, Super Bowl 50 was also the first time that all ads airing on the telecast were also live-streamed on the digicasts as well. This migration of ad dollars is particularly noteworthy and serves as a confirmation for the pace at which consumer preferences are evolving on a year-to-year basis. With the Olympics now under way, it will be interesting to examine yet another major event in sports and compare figures on how live-streaming has proliferated or not since February.

Yet, the impact of live-streaming goes beyond what can be labeled as traditional content. It has also helped to cultivate entirely new frontiers within social media and content creation more broadly. "Social Streaming" has exploded as of late through the likes of Periscope and Facebook Live, which provide their creators with a personalized channel capable of broadcasting their respective content to anyone wishing to consume it and vice versa. Absent the perennial gatekeepers, these platforms have witnessed a massive influx of established and organic talent alike, and the viewership has followed. Moreover, their departure from the linear schedule, increased assortment of content, and enhanced level of interactivity through features such as real-time chats have jointly helped to reinvent the ebb and flow of digital entertainment and the creator's/viewer's participation in that experience.

Holistically speaking, the significance of live-streaming in the digital world is substantial, and it is becoming a point of focus for organizations working to stay ahead of the curve. Many industry heavyweights have already taken steps to either internally build, partner in, or acquire live-streaming capabilities in some form or fashion. Recent examples include but are not limited to: IBM's acquisition of Ustream, the NHL's digital rights partnership with MLBAM, Yahoo's launch of live-streaming capabilities on Tumblr, GoPro's partnership with Periscope, Twitter's content deals with the NFL, NBA, and Pac-12 . . . and most recently, Disney's whopping $1 billion investment in BAMTech (the video streaming company created by MLBAM).

All things considered, the trend line is becoming more apparent. While live-streaming's subsequent evolution in the years that follow is still subject to speculation, its impact to date has been nothing short of invigorating. It has served as a catalyst for an important progression that will undoubtedly continue to shape this ever-evolving ecosystem, both as a gateway for content and for its part in changing the paradigm related to our consumption habits. But while live-streaming's contributions are significant to be sure, it is only a small piece of the collective puzzle. There is a confluence that is under way, one that will in time align the experience of live-streaming with other burgeoning focuses such as wearables, iOT, and VR/AR. This collective "Next-Gen" experience will be nothing short of revolutionary and is one that I am most eager to see unfold. It will change our world in ways that go far beyond the realm of media and entertainment and will undoubtedly leave consumers dazzled in the process. Stay tuned.

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Keys to Disclosing Sponsored Content for eSports

By Jacob Carlson

Two major YouTube stars, TmarTn and ProSyndicate, shook up the gaming world earlier this summer when it was revealed that an online skin gambling site that they promoted was actually owned by them (FYI—skin gambling is a way for video game players to bet unique designs of in-game items, with the chance to win a group's "pot" of wagered virtual items). The failure of these influencers to disclose their ownership stake in the site quickly grabbed the industry's attention and started a domino effect, including the review of skin gambling in general and its potentially illegal secondary market with real-world cash transactions accessible to young children.

The eSports and video game space is one of the largest digital growth sectors today. With eSports industry revenue alone projected to reach $1.1 billion by 2019, there are many different ways for companies and individuals in the eSports industry to generate revenue. One of the ways that eSports and gaming professionals make money is by live-streaming or broadcasting for fans on platforms like Twitch and YouTube. Additional money-making opportunities come through the form of sponsored content, where the influencers are compensated to use or review another company's video game. For a young gamer, this can seem like a great way to make money, but there are strict rules around disclosing sponsored content and business relationships to combat deceptive advertising practices.

Understand What Requires Disclosure

Did someone get a product for free or access to an event that they would have otherwise had to pay for? If they have been given something with monetary value, including cash compensation, they are required to disclose that to their audience. Even something as simple as a gift card requires alerting the audience.

Do they have any relationship with the product or company they are reviewing or promoting? They need to spell that out for their audience. TmarTn tried to update old videos with text disclosures in the description after the fact, but even that wouldn't have sufficed. It is necessary to communicate to the audience without making them search for a disclosure.

Talk About It

Whether people are creating content on YouTube, Twitch, Facebook/Instagram, Twitter/Periscope, or Snapchat, or any other social media platform, they need to talk to their audience. For eSports players and live-streamers, it is important to talk about their sponsored content throughout the broadcast. Especially for live-streaming platforms, audiences will come in and leave at various points in the broadcast. It is important to disclose the sponsored relationship at the beginning and end of each broadcast, with regular mentions throughout the broadcast, so anyone joining midstream will be aware of the sponsorship. Having an easy-to-read text disclosure on the screen throughout the stream can also help reduce the number of verbal mentions required.

Monitor for Compliance

If a company pays or compensates someone to review or endorse a product, it is incumbent upon that company to monitor the creator for compliance with disclosure expectations. If the creator does not meet the standards of disclosure, it is necessary to contact them and remind them of the obligations set forth in their agreement.

It is important to note that the onus not only falls on the company itself, but on the creator as well. Both parties are responsible for making sure that consumers are well aware of any relationship.

These recommendations are not exhaustive by any means and should not constitute any official checklist for compliance. However, these highlights can help start the conversation of what initial steps need to take place in order to start the process of proper disclosure. It's always better to be safe than sorry.

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