The $100M fight for F1 in the US, $10B Growth in GameFi, and Tastemade / Pinterest Strike Million $$ Deal
What We’re Reading
3 articles + RockWater analysis to make you a better investor and operator.
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Netflix, ESPN, and NBCUniversal Compete for US Formula 1 Rights
TechCrunch, 6.7.2022
- Bidding has started for the new streaming license, which would kick off in 2023.
- ESPN is currently the rights-holder in the U.S. for F1 and has been since 2017. The rights expire at the end of this year, and F1 is targeting $100 million for a license deal.
- Netflix CEO Reed Hastings has alluded to thinking about bidding for F1 rights. In September 2021, he spoke with German magazine Der Spiegel, hinting that Netflix is considering buying into the sports category. He said, “A few years ago, the rights to Formula 1 were sold. At that time, we were not among the bidders [but] today; we would think about it.” He added that Netflix would be interested only if it could “control the source” and win exclusive rights.
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The RockWater Take by Andrew Cohen
Netflix needs to expand upon its core model. The question is: how? They’ve already declared their intent to launch an add-supported tier, and some have even speculated that Netflix will acquire Roku to bolster that expansion.
Another fascinating opportunity lane would be for Netflix to expand into the lucrative live sports business. Other streamers like Apple TV+ and Amazon Prime have already made big investments in live sports rights. Will Netflix be next? Here’s a few reasons why it could work:
1) It would boost its upcoming advertising business. Live sports are the most valuable ad inventory in media.
2) Netflix’s F1 docuseries, Drive to Survive is already the league’s most effective marketing machine. Owning that top-funnel, as well as the bottom funnel (live broadcasts), would make Netflix a uniquely valuable league partner.
3) Consumer products and video games. Netflix has been investing heavily in its consumer products business (Netflix Shop + WalMart Hub), as well as its gaming business (acquired 5 gaming studios over the past year). Netflix could build upon its live rights partnership by exploiting F1’s IP across these consumer touchpoints as well. Sports is not only the most valuable advertising asset, but this IP also over-indexes on consumer products and gaming sales, which could help accelerate Netflix’s growth in these new verticals.
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GameFi: Can Blockchain Based Gaming Redefine the Industry?
Linkedin, 6.16.2022
The RockWater Take by Michael Booth
Amazing white paper on the intersection of web3 and videogames from Cointelegraph. If you don’t have time to read the whole thing, see more for key takeaways 👇🏼👇🏼👇🏼
The Industry is Booming:
💸 With ~$10 billion in earnings, GameFi already has a measurable impact on the gaming market as a whole.
💸 Blockchain-based games Axie Infinity and DeFi Kingdoms reached more than $400 million in transaction volume on a daily basis.
What’s Driving the Rapid Growth?
📈 By strengthening property rights, and at the same time reducing transaction costs, this new economy creates maximum value for players instead of extracting value from “customers”.
📈 Players can take characters and objects out of games and exchange them for a fiat-denominated stablecoin on a decentralized exchange. Ownership means a lot more if they can sell their digital goods outside of the game compared to the old days on an in-game marketplace for a fixed price.
📈 GameFi’s potential was exposed during the global pandemic when people needed to find alternative sources of income. Some players managed to generate more than their average monthly income from playing games like Axie Infinity.
What’s Next?
🔮 2022 will show how game studios deal with regulatory and environmental concerns around blockchain technology. If they address these issues, we might see that the gaming industry is far from a plateau.
🔮 A profit-driven explosion in users can bring fleeting long-term growth and a player base that is less than loyal. Long-term success of P2E games will rely on more than just an opportunity to make money. Great gameplay is the key here.
🚨 I can’t emphasize this last point enough. All of the P2E games I’ve played have been unimpressive, feeling like knock-offs of AAA titles at best. The underlying tech is promising, but the UX leaves a lot to be desired. The studios that win at GameFi will be those that seamlessly integrate blockchain into A+ gaming experiences.
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Pinterest and Tastemade Strike Multimillion Content Deal
Axios, 6.14.2022
The RockWater Take by Alex Zirin
Once again, food content has proven its ability to be a lynchpin of the mainstream.
Tastemade and Pinterest have signed a multiyear, multimillion dollar content deal that will launch later this year. As part of the deal, Tastemade will produce 50 new shows, events, and live programs for Pinterest TV in at least 8 languages.
Moreover, most will be shoppable, serving to build a content / commerce machine via more premium content than their self-service app ‘Pinterest TV Studio’ facilitates.
As Pinterest looks to expand its footprint, a deeper move into the food space is a well founded decision. Pinterest is quickly becoming a go-to for recipe inspiration, with food becoming the number 2 topic on the platform.
Tastemade, the premier digital food platform and studio, already has deep organic integration into Pinterest’s ecosystem; Tastemade pins are saved 3x more than the average pin.
Moreover, this deal will enable further utilization of Tastemade’s creator community, which has expanded significantly with the launch of their Maker program, across Pinterest.
Deals like this further validate the viability of food media to drive meaningful value in the Content x Community x Commerce flywheel. As we predicted at the beginning of the year, there will be a two way flow of value in food media. Those outside the space will find value via expansion into food, and food-native publishers will generate value across the full spectrum of lifestyle content.
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If these insights are relevant to projects you are thinking through, ping us here. We’re always excited to riff through ideas!
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