How Spike TV Is Driving Digital Revenue From The Video Game Awards

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MTVN’s Spike TV launched the first Video Game Awards (VGAs) in 2003, and has been delivering exclusive game trailers and performances to gamers — as well as a highly-engaged audience to video game and CPG advertisers — ever since. Last year, 10 million people tuned in to the awards, with 2.3 million in the network’s “sweet spot” demo of males 18-34. But like other big TV awards shows, the VGAs have had to try to evolve into a digital event in a way that doesn’t cannibalize TV views.

“Our audience is that generation of teens and guys that watch TV with their laptops out,” said Jeff Lucas, EVP of ad sales for MTVN (NYSE: VIA) Entertainment. Spike tapped in to that simultaneous viewing trend by live-streaming the entire show for the first time last year. The Burger King-sponsored live feed garnered 195,000 video streams — enough for the fast food company to re-up its investment this year — albeit with more cameras, more locations and more behind-the-scenes content.

Spike has been promoting Burger King’s “Watch the VGAs Your Way” feed with banners and display ads in the weeks leading up to the show; event presenters will also talk up the live streams on-air when the VGAs go live tonight at 8pm EST/5pm PT.

Multi-platform sponsors: Meanwhile, Mountain Dew has also returned as a digital sponsor. The company is backing the Best Independent Game award, and giving away thousands of free downloads of indie games on platforms like Valve’s Steam, in a promo called “Dew the Download.” Still, Spike managed to get both digital and TV ad revenue from Mountain Dew, as the company also sponsored the Next Great Game Gods, a show about indie developers, which aired on the network last night.

Game publisher buy-in: Then, there are the game trailers. Big publishers like Activision (NSDQ: ATVI), EA and Ubisoft have made the VGAs the primary event for unveiling new games for the coming year. This year, viewers will see 10 trailers from highly-anticipated games like Tron, both on-air and online. In 2008, the exclusive trailer videos garnered over 2.4 million streams within the first week, driving brand awareness and increasing the buzz around games like EA’s Fight Night Round 4.

The bottom line: With all the on- and offline ad revenue, the biggest question is whether the VGAs are a money-losing or money-making event for Spike TV. According to executive producer Casey Patterson, it has been a “profitable show” since its inception, with digital adding “new streams of incremental revenue” to the bottom line.

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