Back when the video game channel G4 TV launched on cable in 2002, Twitch was nine years away from existing and the concept of creating programming exclusively for gamers, by gamers was basically unheard of.
At the time, the channel captured an audience with popular shows like "Attack of the Show!" and "X-Play," a game review show with comedy skits, but it didn't last.
Originally created by former Disney president Charles Hirschhorn, G4 was a Comcast property that was eventually licensed out to Hearst Corp. but plans to integrate it into the company's Esquire lifestyle content fell through. By 2014, with ratings low and its fan base seen as too niche, cable providers began to drop G4 from coverage. It finally stopped airing in 2014.
Seven years later, G4 is back.
Just as streaming services have made advertisers rethink the value of so-called niche audiences, Comcast is resuscitating the channel. G4 hits screens as more and more people are playing video games (thanks in part to the pandemic, which caused people of all ages to become gamers during lockdowns).
The rising player base is also spending more, making the industry more valuable than film and TV combined. According to analysts at NPD Group, U.S gamers spent $13.3 billion in the third quarter this year, up 7% annually. That's the highest quarterly spend NPD's ever recorded, and it's on track to keep climbing.
G4 President Russell Arons
"G4 in its original version was almost legitimizing something that most people didn't even want to acknowledge, right, that gaming and fandom is a lifestyle and can be celebrated," G4 president Russell Arons said. "Fast-forward to today and there's a lot of outlets in that space, but the G4 approach is really… fun, irreverent, with an ensemble cast of really authentic personalities.”
G4 will bring back "Attack of the Show!" and "X-Play," for a reboot with their original hosts (Kevin Pereira and Adam Sessler). Actress Olivia Munn was originally an "Attack of the Show" co-host, but despite rumors she won't be returning for the reprisal.
Other shows in production at G4's Burbank studio include "Boosted," which will break down esports news and matches for casual fans, a show hosted by popular YouTuber Scott the Woz and a "Dungeons and Dragons" themed show called "Invitation to Party."
Arons told dot.LA the plan is to add more shows in the coming months "to really round out G4 As the place for gaming and fandom."
While the original G4 was carried on by NBCUniversal on cable, this new version is a hybrid of linear and online streaming content. It will broadcast a series of TV shows focused on gaming culture on cable channels including Verizon FIOS, Xfinity, Philo and Cox, as well as on YouTube and Twitch, which it has a multi-year promotional and commercial deal with. G4 currently has roughly 520,000 subscribers between its Twitch and YouTube channels.
G4's network is now owned by Comcast Spectacor — Comcast's sports-focused business arm which also owns an esports team, the Philadelphia Fusion.
G4 chief revenue officer Josh Cella told dot.LA the network plans to use that synergy to make content and ink brand deals focused on esports, which the original G4 channel never could before.
"To be a part of Comcast NBCU is obviously a major advantage for us," Cella said. "When we think about distribution and linear cable, that's going to naturally just inherently skew a little bit older, but there are tens of millions of gaming fans that fall within (an) older demographic that still have cable," Cella said. Where those fans are, even Cella couldn't pinpoint, but he knows they're out there.
Arons had ambitious predictions for G4's reach after rebooting. She said that at its peak, G4 recorded 65 million users, and it's expecting to launch to at least 70 million homes "because of that combination of linear and streaming." Arons added the network expects to add another 10 million households to its reach.
"I'm being conservative when I say that that 70 million figure is at launch, it could be much bigger," Arons noted.
Having a Twitch and YouTube presence is key for G4, but it remains to be seen if its audience will also tune in on actual televisions. A March Pew Research poll found that only 34% of Americans aged 18-29 get TV via cable or satellite TV, down 31% from six years ago. And less than half of people aged 30-49 are using cable — roughly 46%.
"When we think about distribution and linear cable, that's going to naturally just inherently skew a little bit older, but there are tens of millions of gaming fans that fall within (an) older demographic that still have cable," Cella said.
When G4 first debuted, its brand was a lot like MTV's awkward, geeky younger cousin – it attracted gamers by leaning into the stereotype that gamers were awkward and offbeat, and brought comedy to gaming content before most YouTube gaming channels did.
"The difference between now and the previous era of G4 is that there are a lot of brands that want to find their way in this space," Cella said. "I would tell you that it's not going to take us long to be profitable," he said, adding that he expects advertising to be "one of the main areas of revenue" for G4, which at first won't charge a subscription fee for content.
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Similar programs are common in the startup world and in the creator economy. For example, social media companies can use accelerator programs not only to support rising stars but to lure those creators—and their audiences—to the company’s platforms. Genies believes avatars will be a crucial part of the internet’s future and is similarly using its program to encourage creators to launch brands using Genies’ platform.
“I think us being able to work hands on with this next era—this next generation of designers and entrepreneurs—not only gets us a chance to understand how people want to use our platform and tools, but also allows us to nurture those types of creators that are going to exist and continue to build within our ecosystem,” said Allison Sturges, Genies’ head of strategic partnerships.
DIY Collective’s initial cohort will include roughly 15 people, Sturges said. They will spend three weeks at the Genies headquarters, participating in workshops and hearing from CEOs, fashion designers, tattoo artists and speakers from other industries, she added. Genies will provide creatives with funding to build brands and audiences, though Sturges declined to share how much. By the end of the program, participants will be able to sell digital goods through the company’s NFT marketplace, The Warehouse. There, people can buy, sell and trade avatar creations, such as wearable items.
Genies will accept applications for the debut program until Aug. 1. It will kick off on Aug. 8, and previous experience in digital fashion and 3D art development is not required.
Sturges said that the program will teach people “about the tools and capabilities that they will have” through Genies’ platform, as well as “how to think about building their own avatar ecosystem brands and even their own audience.”
Image courtesy of Genies
Founded in 2017, Genies established itself by making avatars for celebrities from Rihanna to Russell Westbrook, who have used the online lookalikes for social media and sponsorship opportunities. The 150-person company, which has raised at least $250 million to date, has secured partnerships with Universal Music Group and Warner Music Group to make avatars for each music label’s entire roster of artists. Former Disney boss Bob Iger joined the company’s board in March.
The company wants to extend avatars to everyone else. Avatars—digital figures that represent an individual—may be the way people interact with each other in the 3D virtual worlds of the metaverse, the much-hyped iteration of the internet where users may one day work, shop and socialize. A company spokesperson previously told dot.LA that Genies has been beta testing avatar creator tools with invite-only users and gives creators “full ownership and commercialization rights” over their creations collecting a 5% transaction fee each time an avatar NFT is sold.
“It's an opportunity for people to build their most expressive and authentic self within this digital era,” Sturges said of avatars.
The company’s call for creators could be a sign that Genies is close to rolling out the Warehouse and its tools publicly. Asked what these avatar tools might look like, the startup went somewhat quiet again.
Allison Sturges said, “I think that's probably something that I'll hold off on sharing. We will be rolling some of this out soon.”
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The second quarter was still a strong one for L.A. by pre-pandemic standards, but it marks a significant slowdown after a record-smashing 2021. The cooling deal activity could continue during the current third quarter and beyond amid an uncertain economic environment and an overdue correction in startup valuations, VC executives told dot.LA.
“You’re starting to see deal flow slow down and you're starting to see a lot of venture investors take a wait and see approach,” said Brian Lee, co-founder and managing director of L.A.-based BAM Ventures.
PitchBook and the National Venture Capital Association recently released their second quarter Venture Monitor report on the investment landscape. According to PitchBook, VCs invested nearly $4.8 billion in the L.A. metropolitan area during the second quarter this year, a nearly 38% decline from the nearly $7.7 billion invested during the same period a year earlier. The number of deals dropped year-over-year from 353 to 278 from April through June.
Deal activity in the Los Angeles MSA since 2019. Source: PitchBook Data
Deal activity during the three-month period is also down from the first quarter of this year, when startups collectively received $7 billion from VCs across 337 deals. Still, L.A.’s second quarter deal count and investment volume were at or above quarterly figures in 2019 and 2020, according to PitchBook.
“The second quarter still maintained a lot of momentum from 2021 and the first quarter, especially if you're looking at the actual capital going to startups remaining historically high,” PitchBook Venture Analyst Cameron Stanfill told dot.LA. “There's still a lot of money that's going into startups right now.”
And L.A. has been one the strongest markets so far this year, trailing only the Bay Area and New York regions in deal count and deal value, according to the Venture Monitor report. As of June 30, there were 669 deals here collectively worth $12.6 billion.
Still, experts say investors are being more rigorous and selective. Taj Ahmad Eldridge, a co-founder and general partner at Include Ventures, said he’s seen funds “taking their time” to do more due diligence before making an investment.
“They're looking for more traction on the customer side,” he said of what funds are seeking lately. Startups do “not necessarily have to have some revenue piece of that, but at least just a pathway to where they could figure this out”
Indeed, startup founders are having a harder time raising funds just from intangibles like vision, a beta product or celebrity involvement, said Joey Boukadakis, founder of L.A.-based General Specific, which advises early and growth stage startups.
“The main variable it feels like investors are focusing on is this signal that someone is willing to pay you for something,” Boukadakis said. “Companies with some kind of revenue around what they're doing in today's world most likely have a better chance of having conversations and bringing on additional capital.”
That could be bad news in the short term for startups in emerging tech spaces like Web3, a decentralized vision for the internet based on blockchain technology. Crypto and NFTs may very well change the digital world as we know it, but not anytime soon.
Investing activity in Web3 hasn’t stalled, but valuations in that space have “come down quite a bit,” said Anna Barber, partner at L.A. VC firm M13. (Disclosure: M13 is an investor in dot.LA)
“We're talking about an emerging market where six months to a year ago, there might have been more appetite for risk,” she said. “We’re very interested in the sector. We're continuing to invest. I think it's more about measuring risk and potential differently in terms of how and when and how much to invest.”
The amount of capital flowing back to investors dried up during the second quarter. Pitchbook recorded 24 venture-backed company exits collectively worth $95.75 million in the L.A. region during the second quarter. This is a sharp drop from the whopping $5.7 billion that returned to investors across 27 deals during the same period last year. This decline comes amid a fall in initial public offerings, public listings and special purpose acquisition company (SPAC) mergers, PitchBook noted.
Early-stage investments, which are generally the most distant from the public market, appear to be largely insulated from current economic troubles. Nationwide, there’s been little slowdown in angel and seed round investment activity, per PitchBook Data.
That tracks with what Minnie Ingersoll has seen as a partner at early stage investor TenOneTen Ventures. She noted the L.A.-based VC just closed an investment last week and another in June, keeping pace with the firm’s usual deal flow.
“I would say there has been less change than I have expected,” Ingersoll said.
One change she has noticed is an increase in extension or “bridge rounds.” These smaller raises are aimed at giving startups more breathing room to weather an economic storm that could last months if not years.
“That's giving them extra runway,” Ingersoll said. “And that means they don't have to go hit the market right now.”
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