Respawn: VENN Gaming Network Drops Its MTV Ambitions and Goes for 'Raw Contact' with Creators
Feb 04 2021
VENN launched in August with the goal of becoming the "MTV of the Gaming Generation" but it turns out the gaming generation doesn't appear to want MTV. They want short-form content.
On Thursday, VENN announced a significant shakeup, shifting their content strategy from about 85% long-form shows to 85% short-form, which is cheaper to produce and offers near instant feedback, co-CEO Ariel Horn told dot.LA.
<p>The company made the shift after securing $43 million in investment and a broad network of distribution partners. Those deals include one with telecoms company Nexstar — with its $5.3 billion market cap and nearly 200 TV stations — as well as a syndication deal with Microsoft's MSN platform and placement in the Roku Channel and on Samsung TV. </p><p>It was ready to go full throttle on their MTV-for-Gen-Z pitch, but after doing a round of focus groups and looking at its cost structure, it pivoted to focus on short-form platforms like YouTube and Twitch. The move, Horn said, reflects how gamers consume media. </p><p>As part of the pivot, L.A.-based VENN will be launching three channels on YouTube and collaborating more closely with creators that already have gamer followings.</p><p>"It's a humbling process, actually," said Horn. "You look at the editors that are making the most successful products on YouTube, and they're mostly younger folks that have grown up and lived in this environment. So for us, that's been a process, to look at those creators that are succeeding on those platforms and allowing them to do what they do and see the results." </p><p>For example, VENN will be developing a new interview show with Hector Rodriguez, whom Horn described as the "grandfather of 'Call of Duty'." Rodriguez, who started esports company Optic Gaming in 2006, has nearly 1 million subscribers and over 150 million views on his YouTube channel.</p><p>"I thought we could take long-form and chop it down into short-form platforms," said Horn, a four-time Emmy winner who previously developed esports strategies for Riot Games, Blizzard Entertainment and Justin.tv, which became Twitch. "But what I realized is that each platform needs its own bespoke attention to detail." </p><p>For VENN, that will mean focusing more on things like video titles, thumbnail photos and metadata as it shifts away from studio-quality fare toward less-polished, user-generated content (UGC).</p><p class="shortcode-media shortcode-media-youtube">
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</p><p>Rather than shooting long-form content from its Playa Vista studio and cutting it down into short-form bits as initially planned, VENN will now prioritize creating short-form, some of which will be shot in the studio, and then cobbling it together for distribution across its various channels.<br/></p><p>"We learned that we must focus our energy on creating engagement and growth on those short-form platforms where gamers are primarily consuming now," Horn said. "The audience is not necessarily looking for higher production value but more direct, raw contact with the creator."</p><p>Also motivating the new strategic direction are the cheaper cost of creating short-form video and the promise of more immediate user feedback. </p><p>Shooting live, long-form content can be expensive because of the manpower and overhead costs like studio space. The new strategy will allow VENN to make more content for less.</p><p>"With our long-form focus, we were able to produce three days' worth of content (per week)," Horn said. By removing some of the production polish, leveraging UGC and reducing the amount of staff needed per product, VENN will be able to produce five days' worth of content at a cheaper cost. </p><p>Thanks to the data that YouTube and Twitch provide, VENN will also be able to get more real-time feedback on what viewers are responding to than they can get through cable and connected TVs like Roku, Samsung TV and Vizio. </p><p>Horn doesn't think the top line will take a hit. </p><p>"I don't think that very much changes from an advertiser's perspective," he said.</p><p>VENN still has aspirations to become a "lifestyle" brand at the nexus of the increasingly overlapping worlds of gaming, sports, music and fashion. But to get there, it will be narrowing its focus for now. </p><p>"It's a reality of a startup that you have to make some bets where you know there are narrow bands of fandom and where you know how to market to them very specifically," said Horn. "We're willing to take as long as needed to build (the lifestyle brand). We're here for the long run." </p>
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If it seemed like everyone and their mother took up gaming this year, that may be because playing became far more popular as social media transforms the industry.
Nearly all games allow for multiple players to interact inside the game, but this year as the pandemic kept people at home, game worlds further converged with social media. Gamers used livestreaming platforms like Twitch and Discord to connect as they play.
<p>Meanwhile social media companies like Facebook boosted their gaming platforms and Snap supersized its gaming effort with Bitmoji Paint, which it <a href="https://dot.la/bitmoji-paint-snaps-latest-game-allows-millions-of-users-to-play-2649482261.html" target="_self">released in December</a>. </p><p>Nintendo's "Animal Crossing: New Horizons" was embraced by politicians, with both congresswoman Alexandria Ocasio-Cortez and president-elect Joe Biden creating neighborhoods and encouraging their constituents to come pay them a virtual campaign trail visit. </p><p>It all meant a push toward a more social game. </p><p>And it was in a year that players spent big on their favorite titles - in November alone, digital games earned $11.5 billion, the highest monthly revenue ever recorded by <a href="https://www.superdataresearch.com/blog/worldwide-digital-games-market" rel="noopener noreferrer" target="_blank">Nieslen's SuperData</a>.</p><p>Global gaming revenue smashed records with sales estimated to reach $174.9 billion by the end of this year, up roughly 20% from last year, NewZoo games analyst Tom Wijman <a href="https://newzoo.com/insights/articles/game-engagement-during-covid-pandemic-adds-15-billion-to-global-games-market-revenue-forecast/" rel="noopener noreferrer" target="_blank">wrote in a recent report</a>. NewZoo predicts that by the end of 2021, roughly <a href="https://newzoo.com/insights/articles/newzoos-games-trends-to-watch-in-2021/" rel="noopener noreferrer" target="_blank">2.8 billion people will be gaming</a> worldwide.</p><p>Social media plays a crucial role in how well a game is received, and it hugely influenced which games took off this year. "Among Us" is a two-year-old game, but when streamers started broadcasting matches <a href="https://www.pcgamer.com/how-among-us-became-so-popular/" rel="noopener noreferrer" target="_blank">in early April</a>, it quickly attracted new players. </p><p>Similarly, popular game streamers broadcasting Santa Monica-based Activision Blizzard's "Call of Duty: Warzone" game helped the game go viral and jumpstarted adoption of its newest title, "Black Ops Cold War," which was the top-selling console game in November with 5.7 million copies sold. </p><p>Adoption of multiplayer games and content is expected to keep rising, prompting startups including Playa Vista-based VENN to capitalize on a market ravenous for group entertainment. </p><p><a data-linked-post="2646889513" href="https://dot.la/venns-quest-to-be-the-mtv-of-the-gaming-generation-starts-today-2646889513.html" target="_blank">VENN's network of gamer-friendly television</a> is now expanding to smart TVs (it recently struck deals with Roku and Samsung) and existing social networks like YouTube, said Jimmy Wong, producer and co-host of VENN's talk show "The Download." </p><p>"Our view of the pandemic is one of someone dousing an already lit flame with lighter fluid," Wong said. "It's a step towards a wider acceptance of video gaming as being one of the most popular things for people to do."</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<a href="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUzNTA5MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1NjY4NDUwNH0.1IYjZA15lzlZSk5_LdjOP6_ywFDl0b3Aab0CLU8B2QM/img.jpg?width=980" target="_blank"><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUzNTA5MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1NjY4NDUwNH0.1IYjZA15lzlZSk5_LdjOP6_ywFDl0b3Aab0CLU8B2QM/img.jpg?width=980" id="945ea" class="rm-shortcode" data-rm-shortcode-id="924d68e20b6f07a54d655d7886aea9bf" data-rm-shortcode-name="rebelmouse-image" alt="VENN Gaming" /></a>
</p><p>In October roughly 931,000 people engaged with Santa Monica-based Riot Games' "League of Legends" page on Reddit, according to <a href="https://newzoo.com/insights/articles/octobers-most-active-game-communities-on-reddit-league-of-legends-narrowly-overtakes-genshin-impact-for-1/" target="_blank">NewZoo's report</a> on the most active gaming communities.<br/></p><p>Ocasio-Cortez broke Twitch records streaming "Among Us," in November, when she linked up with several famous streamers for a live broadcast that reached over 400,000 people.</p><p>Social media not only expands the reach of a multiplayer game, but also its lifespan -- "League of Legends" is over a decade old, and Activision's "Call of Duty" franchise launched in 2003. "Among Us" came out in 2018, but it made $3.2 million in digital revenue this year and passed half a billion downloads in December.</p><p>"There's now so much evergreen video content surrounding these games which has made the lifespan and reach so much greater," said Ryan Horrigan(cq), CEO of West Hollywood-based <a href="https://dot.la/artie-2647773915.html" target="_self">Artie</a>, a startup that designs multiplayer cloud-based browser games and will launch in 2021. "I do think gaming is becoming the next social network." </p><p>Social media and streaming drives players back to games but it's also a lucrative ad opportunity. "The world of gaming is permeating well beyond even the notion of a game," Horrigan noted, and lately includes film and TV adaptations of hit titles. </p><p>Scopely, a Culver-City based mobile publisher, both makes and acquires multiplayer games. "Marvel Strike Force," which it <a href="https://www.marvelstrikeforce.com/en/updates/foxnext-games-la-and-marvel-strike-force-to-join-scopely" target="_blank">bought from Walt Disney Co. in January</a>, is its biggest earner. "We will close the year above $900 million in revenue, nearly double the revenue of 2019," Scopely's head of strategic partnerships Mike DeLaet told dot.LA. </p><p>Tim Richards, vice president of publishing at Calabasas-based <a href="https://dot.la/la-liga-greenpark-sports-2649521796.html" target="_self">GreenPark Sports</a>, is designing a virtual space for sports and esports fans to hang out and play that will launch in January. "We designed the idea around this data that 90% of Gen Z classify themselves as gamers," Richards said. He noted that even hardcore sports fans like virtual viewing -- "Even back in (pre-pandemic) days, very few folks went to every sports game." </p><p>Analysts agree gaming is now a more essential form of social entertainment than ever before and it will continue to grow in audience next year, as will streaming and virtual events that take place inside live games. </p><p>"Multiplayer games would have grown in popularity regardless of COVID-19," said Carter Rogers, principal analyst at SuperData. "This growth is sustainable, and we aren't likely to see any sort of video game 'crash' after most people are vaccinated. People are forming long-term habits as they play online games, many for the first time."</p><p><em>Correction: An earlier version of this piece mis-identified Tim Richards, GreenPark Sports' vice president of publishing.</em></p>
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VENN leveled up in its quest to become the 24/7 streaming network for gaming on Tuesday, announcing it has closed a $26 million Series A financing round. The Playa Vista-based company has also turbocharged its leadership and distribution network.
The Videogame Entertainment and News Network launched in August with $17 million in seed funding. That round was led by Bay Area gaming fund BITKRAFT, which also co-led the Series A — this time with Nexstar Media Group, a NASDAQ-listed telecoms company headquartered in Irving, Texas.
<p>As part of its investment, <a href="https://www.nexstar.tv/" rel="noopener noreferrer" target="_blank">Nexstar</a>, which claims to reach nearly 63% of U.S. television households, received exclusivity for local television broadcasting and the right to appoint a member to VENN's board. </p>
<p>In a statement, Nexstar executive Thomas E. Carter said, "VENN is a new kind of TV network built for the streaming and digital generation, and it's developing leading-edge content for the millennial and Gen Z cultures who are obsessed with gaming. Gaming and esports are two fast growing sectors and through our investment we plan to distribute VENN content across our broadcast platform to address a younger audience; utilize VENN to gain early access to gaming-adjacent content; and present local and national brands with broadcast and digital marketing and advertising opportunities to reach younger audiences." </p>
<p>In addition to the new financing, VENN announced Tuesday it will now be available on The Roku Channel, complementing its existing distribution channels, which include <a href="https://www.plex.tv" rel="noopener noreferrer" target="_blank">Plex</a>; <a href="https://corp.xumo.com/lg-channel-plus/" rel="noopener noreferrer" target="_blank">LG Channels</a>, powered by Xumo; <a href="https://www.samsung.com/us/televisions-home-theater/tvs/tvplus/" rel="noopener noreferrer" target="_blank">Samsung TV Plus</a>; and <a href="https://www.vizio.com/en/home" rel="noopener noreferrer" target="_blank">VIZIO</a>. </p>
<p>Similar distribution agreements have helped VENN attract advertising partners, including brands such as Subway, Draft Kings and Adidas.</p>
<p>Also announced Tuesday: Jeff Jacobs, formerly a production head at Viacom and MTV, and most recently president of a third-party production firm whose clients included Viacom and the NBA, has joined VENN as executive vice president and general manager. His responsibilities will focus on growth and expansion. </p>
<p>VENN broadcasts from its 8,000 square-foot studio space in Playa Vista. It was co-founded by Ben Kusin, formerly of Electronic Arts and Vivendi Games and son of GameStop co-founder Gary Kusin; and Ariel Horn, a pioneer of esports with experience at NBC Universal and Riot Games. He was also an early employee at Twitch. </p>
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