Fortnite revenue dip, comics in streaming age, & more media M&A

Online gaming juggernaut Fortnite finds its revenue is down 52% year-over-year. But does it really matter? This and other culture-tech news below…

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What You Need To Know 👀

1. Fortnite US July revenues down 52% year-over-year 🎮

A new report from Edison Trends states:

“The hit video game leads in spend compared to challengers PlayerUnknown’s Battlegrounds, Apex Legends, and Call of Duty: Black Ops 4, but has seen sales drop 52% since Q2 2018.”

Edison's research shows the game ended July down nearly 75% from its December 2018 peak, and down 52% compared to the previous year's July:

My take: While 52% is a big drop, you can see in the above chart that online games tend to have peaks and troughs in revenue. According to Techcrunch via Nielsen company SuperData, December was a peak month “with Fortnite fever in full swing and holiday purchases driving revenue to record levels.” Also season 7 of Fortnite was released on 6 December, and according to the Fortnite Wiki that launched a new storyline. It’s also worth noting that Fortnite revenue is mostly from virtual goods, so a drop in revenue from those items doesn’t necessarily mean less people are playing the game. Finally, Fortnite made an estimated $2.4 billion in 2018 and was the top-grossing free-to-play game in the world, so there’s no need to cry any tears for the company.

2. Comics in the Age of Streaming 🦸

PublishersWeekly wrote a preview of an upcoming event called Insider Talks, an annual business conference hosted by ICv2 and held in conjunction with New York Comic Con. The theme of this year’s event is “The Future of Comics in The Age of Streaming.” According to ICv2 CEO Milton Griepp:

“The ways people consume entertainment are changing. Streaming is having a direct effect on comics by providing another channel for media based on comic properties, and by providing source material on which comic can be based. We also wonder whether binge viewing, a direct outcome of the age of streaming, may be reducing consumer appetite for serial entertainment (like periodical comics) and increasing demand for complete stories (graphic novels).”

My take: It’ll be interesting to see what data comes out of this event, but note that the ‘big two’ of comic book publishing - Marvel and DC - both offer comic books via streaming. Marvel Unlimited offers 25,000+ digital comics, starting at $9.99 per month. And in April, DC made 20,000 of its comics available online as part of its DC Universe service. That package also offers streaming movies and TV shows based on DC’s comics (however, it’s not available in my region - so clearly it hasn’t rolled out globally yet).

3. Dotdash acquires Liquor.com 🥃

There’s been a flurry of M&A activity in media this week. I commented on the Vox purchase of NY Magazine earlier in the week, then Vice Media bought Refinery29, and now Dotdash is getting into the action:

Dotdash has acquired Liquor.com, a digital media company that focuses on cocktails, spirits and entertaining, executives tell Axios. […] It's Dotdash's fourth acquisition of this nature this year. The multi-brand digital media company, owned by Barry Diller's Interactive Corp. (IAC), has been quietly building an empire of small, niche digital publications that publish evergreen, service content — or content that helps users answer questions, give advice or find ideas.

My take: This is another content + commerce play, although I was surprised to learn that Liquor.com doesn’t currently have commerce integrated into its site. Dotdash CEO Neil Vogel told Digiday that “there’s virtually no commerce business right now” with Liquor, but he thinks “there’s a very big opportunity there.” He went on to say, “we come from a place of understanding media, but we have a fairly large commerce and transactional business now.” Liquor is almost an ideal product range to build a media + e-commerce business around, since many of us rely on expert recommendations on what to buy (for wine, whisky, and so on).

4. Content recommendation companies Outbrain and Taboola merge 💰

Digiday reports that “Taboola said it will acquire Outbrain for $250 million in cash and 30% equity of the combined company.” It went on to note:

“Now the two are joining forces to create a content recommendation monolith they say will give advertisers access to a new scaled player in an online ad market dominated by Google, Facebook and, increasingly, Amazon.”

My take: As noted a couple of weeks ago, when the Jeff Bezos-owned Washington Post announced a new ad network, it’s hard to see how anyone can compete with Google and Facebook these days in online advertising. Not to mention the increasing difficulty of running ads in a privacy-spooked era (third-party cookies are now a bad thing, as I discussed earlier in the week). It makes sense that the two biggest ‘content recommendation’ players have merged to try and build scale, but it won’t necessarily move the market.

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Data Points 📊

• Deezer via Hypebot: 49% of UK music fans are listening to fewer full albums than they were just 3-5 years ago. 🎹

• Entertainment Strategy Guy: Growth of all Netflix subscribers over time (including before streaming era started in 2007). 🎥

  

• Marketing Charts: growth in VR (49.2%) and AR (41.3%) for consumer has been weaker than XR professionals hoped over the past 12 months. 📉

• Pew Research: About six-in-ten (62%) say social media companies have too much control over the mix of news that people see on their sites. 📱

• SparkToro: 50.3% share of all Google searches were zero-click searches in June, while 45.3% of the searches were organic clicks. The remaining 4.4% of searches resulted in ad clicks. 🕸️

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Tweet of the day 🐦

Fortnite fan Zara Jones gives her reason for why Fortnite revenues have dropped dramatically:

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