How to build Europe’s largest esports agency: Interview with Vitalii ‘V1lat’ Volochai, Maincast co-founder
In 2018, Vitalii ‘V1lat’ Volochai, an esports commentator and one of the biggest influencers in the industry, teamed up with three partners to launch the esports studio Maincast. Today, the Ukrainian company is among the leading esports content generators and tournament broadcasters in Europe. Since its foundation, Maincast has more than doubled its number of staff, organized over 50 major broadcasts that have been watched by tens of millions of people, and become a leading platform in a range of games.
In his interview with AIN.UA, Vitalii speaks about how the company is progressing today, how much it costs to acquire broadcasting rights and quite how they pay off, as well as what has changed in the esports industry due to the pandemic.
How much has Maincast grown since the last interview? In terms of projects, money, people.
Over the two years, we have taken over 75% of premium content and opened two new studios – those of analytics and commenting. The development of two more is underway now, including an augmented reality studio.
We are also strengthening our human resources. At the start, the team consisted of 35 people, and now there are 80 of us. We are constantly increasing our administrative and broadcasting staff, and we are searching for commentators and analysts, developers who work with AR technologies, Unreal Engine, etc.
Our turnover has doubled compared to that in 2019, despite the dire situation during the pandemic. We plan to break even by the end of this year already.
In 2020, we launched some new game categories, including traditional sports. We have the necessary equipment, studios, and professionals who can commentate a wide spectrum of sporting disciplines. We have entered into a strategic partnership with the MEGOGO video service: premium esports content and exclusive shows have appeared on the platform. You could have seen on MEGOGO the fights of Vasyl Lomachenko and Oleksandr Usyk broadcast from our studio. We are expecting a major announcement soon: Maincast is to become the studio location for the UEFA Champions League European Cup matches on the Volia Football channel.
We see two vectors of development for us: reaching new audiences and raising brand awareness, or, alternatively, targeting a B2C audience as a tech contractor that is capable of organizing broadcasts of top sporting events. In 2021 we see prospects for further development in this direction.
How has the pandemic affected your business?
We have switched to remote work almost completely, except for the airtime team, because we have not stopped broadcasting. Of course, there were Covid-19 cases inside the company, and we improved our technical processes so that the majority would have an opportunity to work from home.
Globally, all fears that the advertising market would shrink because of the pandemic have turned out to be in vain. Esports was the only functioning sport, and we did not suffer much from the pandemic but quite the contrary, we received additional opportunities and advertisers.
Despite offline tournament cancellations, the market adapted rapidly and went completely online. We had a lot of negotiations with tournament organizers and, owing to the flexibility of the sector, we lost only 10% of the content, which is minimal losses compared to traditional sports.
What significant projects have you delivered and with what results?
The Maincast channels completed 11,339 airtime hours during 2020, along with more than 50 tournaments in various games. By the number of covered tier-1 and tier-2 events in such games as CS:GO and Dota 2, as classified by Liquipedia, our studio covered the most, and our Twitch channels hold leading positions. Over the last year, the most-watched Russian-language channel covering esports events was the Maincast CS:GO channel.
I should mention the only Dota 2 major over the last year, DreamLeague S13, held in Leipzig, even with spectators still present. The broadcast was watched by 21.8M people, including 5.4M unique viewers.
We also organized the broadcasting of ESL One Los Angeles 2020, within which we broke historical records by the number of Dota2 online tournament views – more than 27m viewers.
Among the major CS:GO events that were covered by Maincast, I can highlight ESL Pro League, which featured a record by the CS:GO online tournament views – 32M, as well as IEM XIV World Championship with a peak viewership of more than 1M people.
It was during the grand final match between NAVI and G2 that our channel showed the best peak viewership results among all Russian-language broadcasts in the CIS – 386,000 simultaneous viewers, which also became the second best result globally in the CS:GO category.
How much did you invest in the purchase of broadcasting rights, and did the investment pay off?
Over the past two years, a seven-digit amount in conventional units has been spent on purchasing Russian-language broadcasting rights.
The largest deal was the purchase of broadcasting rights for ESL and Dreamhack tournaments until 2023. According to the terms of the contract, we cannot disclose the figures (according to AIN.UA, the deal amount was $13M+, but the company refused to comment on this figure – ed.).
The maximum amount in the history of rights in the esports industry, but it is still significantly less than the cost of buying rights, for example, to broadcast the Champions League on the territory of Ukraine.
We also have broadcast rights to several other tournaments. On average, the cost of buying media rights for one tournament varies from $50K to $300K.
If we take specifically the cost of the rights, they are currently paying off. But in our business, besides the rights, there are other costs: we create a tremendous amount of content, invest in expanding infrastructure, improving software, and in-game solutions.
Please name the major advertisers you have worked with. What were the budgets? What are the minimum and maximum budgets in your portfolio?
We want to expand our portfolio of endemic brands in esports. We have engaged such advertisers as Nivea Men, Philips, Borjomi, Haval, PariMatch, GGbet, Lion, Fruttis, Metro, and others.
As part of the cost of integrating into premium esports tournaments, CPM ranges from 3 to 7 euros and depends on the package selected. During the tournament, the brand receives about 15-20 million views.
The esports audience is currently not yet so sensitive to advertising.Therefore, it opens upsignificant advantages for brands with an adequately built strategy: increasing loyalty and brand awareness, deliveringUSP, stimulating sales growth, increasing audience engagement. There is a myriad of tools for this, and it all depends on the goals and objectives.
The minimum package of integrations within a single tournament starts at $30K. Further, the budget can grow depending on many factors: the duration of the partnership, communication channels, and the complexity of the integrations. For example, a premium partnership for a top two-week tournament could reach $170K.
Esports allows to not only be limited to media placement but also to develop full-fledged marketing strategies adapted for esports. For example, for HAVAL, we developed esports video ads and creative integration into the game interface from scratch. The possibilities are virtually unlimited, as well as the budgets.
Do you have advertisers from Ukraine in your portfolio? Who is it? How their budgets, goals, requests differ from global brands?
We have collaborated with several Ukrainian representative offices of global brands, such as Nivea Men and Borjomi. For Nivea Men, we even implemented a few special projects where we held Fifa tournaments for the brand. Globally, we do not make exceptions depending on the partner’s region, so budgets do not differ and depend only on the complexity and set of advertising options.
Unfortunately, not many advertisers from Ukraine are interested in esports. Such companies as DHL, IBM, Mercedes have already penetrated the world of esports. In our country, Ukrainian companies like Nova Poshta or Rozetka are not yet considering esports. It is a pity.
Have you already hosted tournaments? If not, why? If yes, tell us about the results (where, how much you invested, did it pay off?).
At the moment, the bar in terms of the quality and complexity of tournaments is very high, which catastrophically inflates the cost of holding tournaments. There is a large gap between investments and earning opportunities. Now even an online league costs about $1M, and you can make about $300K on it. Therefore, at the moment, strategically, this is not our growth vector. It is ok for companies that work for capitalization, for example, for our direct competitor RuHub. In our case, we are focused on self-sufficiency.
Maincast has organized many tournaments both online and offline. For example, we held two seasons of the CS: GO ICE Challenge tournament in London for the GG.bet brand. As a tournament organizer, we provided a full range of services, from the development of graphic design and stage to inviting teams, administering the sports part, and promoting the tournament in the media.
How would you comment on what is happening with esports, in particular – Dota2 and CS? It seems that teams compete almost every day. There is one tournament after the other. Plus, the magic of the fact that everything is online and there are no big and beautiful offline tournaments. Don’t viewers grow tired of it?
With the start of the new rating season, we see a positive trend in views. The first DPC season is over, and the first offline Dota 2 Major will start soon, which will be covered on the Maincast channels. We expect an increase in views, as viewers have missed large offline tournaments during the year of the pandemic. We hope that the online year is behind us and that there will be positive dynamics in 2021.
What do people watch more, Dota 2 or CS? It seems that after NAVI and S1mple invaded the CS scene, everyone ran abruptly in that direction.
In 2020, our CS: GO Twitch channel became the most popular channel among the Russian-speaking audience, collecting 39.3 million viewing hours. Now this game has more views, and matches with NAVI team are breaking records for the peak number of viewers in the stream.
There is a significant difference in the number of tournaments covered by games. Last year, we broadcast 28 major CS tournaments and seven Dota 2 tournaments. This year, we expect the return of offline tournaments in both fields, as well as Dota 2‘s main event, The International. Perhaps this will change the viewing statistics.