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In early September, the live streaming engagement and analytics platform Maestro announced the close of a $3 million Series A funding round. Its white-label platform is self-described as “Nielsen for the cord cutter generation”, and is used by several big entities in esports, from Blizzard to Dreamhack.

The Esports Observer spoke with Ari Evans, CEO of Maestro, about the dynamic landscape of livestream monetization, and where he wants to push the medium.

“On-demand videos are carefully edited so that every moment matters. Because of this, the viewer doesn’t want to be interrupted. These circumstances have led to the ad formats we have today…”

In the investment announcement, you mentioned that you wanted to expand into new verticals. Can you give us a hint as to what these could be?

Sports is the next logical vertical, which naturally has the most overlap with esports. Just about every day there is a new announcement about a sports league, team, or other entity making an esports related announcement. Beauty and fashion are also in our crosshairs, as purchase behavior moves online driven by makeup influencers, runway streams, and video product reviews.

More broadly, we believe that the segment of enterprise live streamers is set to grow rapidly, with more consistent streaming schedules, particularly as we provide the tools they need to develop a robust strategy worthy of continued investment.

This is the second notable esports investment for the Hersh Interactive Group. Can you tell us a little bit about how they became your lead investor for this round, and what they ultimately brought forward?

We weren’t actively seeking funding at the time, but instead were having conversations to identify a partner who understood and believed in our vision and execution strategy. We wanted to find a group of investors who could be accretive to our growth and cared deeply about our space. Maestro sits at the intersection of many hot, buzz-wordy industries: live streaming, esports, and analytics, which made it harder to break through the noise.

When Hersh Interactive Group (HIG) found us, we fit their thesis and it was an ideal match, so we decided to start the process. Everything moved along pretty quickly from there. HIG is committing significant capital to the esports vertical with a strategy that spans several important areas: teams, platforms, enabling technologies, and more. These pieces create a true portfolio strategy that enhances each company. Most importantly, they work hard to be as helpful as they can be while allowing us to stay in control of our business and see our plans to fruition.

Content analytics as a market is growing extraordinarily fast. What are some of the unique ways esports and live-streaming as entertainment mediums cater to analytics tools and data-sets?

One of the initial inspirations for the creation of Maestro was the observation a few years ago that the live stream experience was simply a television broadcast on the internet. This was, in effect, dulling the power of the web, a two-way interactive medium, into a simplistic one-way broadcast. Within our product, we focus on adding features that engage audiences to take action at key moments during the broadcast. Esports publishers, our initial focus, are a perfect fit for the platform; all of the top gaming companies have strong data-driven decision-making processes which rely on having systems in place to analyze behaviors.

At Zynga, where Jason Gornall, our lead engineer, and I worked previously, it was immediately apparent that a large part of the company’s success was attributed to their product management-led approach to games. Any PM could query the entire user data set of any game in the company, quickly and reliably. We frequently shared best practices, tips, and tricks to do better analysis. We also forecasted funnels and revenue in great detail and reported the results. In order to enter its next phase of growth, live streaming must expand beyond a narrowly focused content-production play to a broader strategy that incorporates goals across the organization.

“In order to enter its next phase of growth, live streaming must expand beyond a narrowly focused content-production play to a broader strategy…”

How do you feel about the tools that, say, Twitch and YouTube provide their streamers to earn money? Do you think it makes sense for streaming sites to provide these tools?

One of the fundamental issues within the landscape is that enterprise content creators and the major video platforms aren’t always aligned in monetization strategies. YouTube, Twitch, Facebook, etc. are all mostly ads driven businesses. Most product decisions they make are based on features that will move the ad sales needle, in the tens or hundreds of millions of dollars range. Enterprise live streamers can’t pay their bills with views. In fact, their lack of ability to control ads frequently leads companies to turn off ad monetization entirely and look for other ways to monetize, although they usually find that their options are limited to the business decisions of the hosting company supporting their streaming efforts.

Ultimately, we believe, enterprises need to be in control of their own monetization channels, using their existing ecosystems and infrastructure. We do not have the same underlying ads-driven revenue structure and thus we have much more freedom in attuning our strategies to help our customers monetize the way they want to. Maestro’s positioning in the market is to be customizable middleware that provides businesses with all the benefits of building instead of buying except without all the headache of development, maintenance, upgrades, scalability, etc.

Do you think traditional media companies can make the jump into live-streaming content with these “native” competitors, especially when it comes to the esports space?

Traditional media companies are already trying to make the jump. ESPN live streamed this year’s EVO 2017 Championship Series. NBC just hosted their first esports event with Rocket League. Turner’s popular ELEAGUE has maintained a dual television/stream strategy since its inception. These initiatives have been met with mixed success, mostly proportional to their authenticity within the esports market. For example, NBC served their Universal Open event on the NBC Sports app, but the experience was limited to only the video. This fundamentally misses the mark with what audiences now expect.

The biggest problem that will hold traditional media companies back is the dramatic shift in strategies that will be necessary to achieve success. Their models still largely are based on paying for content, marketing and exclusively distributing said content, and deploying their ad sales armies to drive ROI. Adblock is a big and growing problem in gaming/esports, and CPM rates will continue their dramatic decline, pushing view requirements to astronomical heights in order to hit the same revenue targets. That said, ads and sponsorship still remain the biggest short-term opportunity, which leads to another major gaping problem holding back esports from tapping into big media dollars: there is no Nielsen-like rating system for web broadcasts.

My colleague and friend, Craig Levine, CEO of ESL, is probably the largest player at the nexus between brands and esports broadcasts. We have both have discussed that brands are much more likely to increase their spend when they can trust the reported results of their campaigns.  In the past, traditional media companies have relied on Nielsen to analyze their KPIs, which has been very successful in tracking audience reach, but as the medium through which companies connect with their fans change, so do the metrics through which they measure to meet their goals.

Maestro also namedrops some of its clients from outside the esports industry, such as Adobe and Coachella Festival. How will the company be facilitating its growth into other non-gaming sectors?

“Adblock is a big and growing problem in gaming/esports, and CPM rates will continue their dramatic decline, pushing view requirements to astronomical heights in order to hit the same revenue targets”

A portion of our Series A funding will be used to grow our sales team and ramp up outreach to established and emerging live stream markets. The new hires we source will be deeply passionate about their vertical, active within the associated community, and will develop access to key stakeholders in order to better understand their needs. Our thought-leading customers in various areas have already contributed to the evolution of our product in many ways. In fact, this is one of Maestro’s strongest sales propositions: 30-50% of our product roadmap is developed based on customer requests.

As new customers join, the B2B network effect amplifies at an increasing rate. The rest of our roadmap is reserved for innovations that no particular customer is asking for, but which we believe will be transformative.

Lastly, where do you see the role of advertising and sponsorship going in live-streaming content? Will banners, mid/pre-roll ads and sponsored channels continue to be the standard, or do you foresee brands trying new methods for reaching digital audiences?

While banners, mid/pre-roll ads, and sponsored channels will continue to be used, live content provides totally different opportunities for brand integration. On-demand videos are carefully edited so that every moment matters. Because of this, the viewer doesn’t want to be interrupted. These circumstances have led to the ad formats we have today, which live “around” the video in some way. Even during streams, the furthest we seem to have gotten is rotating logos burned into the video feed. Live content is a totally different animal. The content itself has natural ebbs and flows; audiences are comfortable being interrupted during lulls in the action–in fact, they almost expect it.

At Maestro, we plan to continue developing new and innovative ways for brands to participate that are additive to the fan experience. Brands are also increasingly attracted to the data they receive by activating on our platform. Not only because of the deep user-level granularity we provide, but also because of engagement data providing more value than passive viewing behavior.

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