In Japan, World Cup matches are keeping people up all night. Early on Tuesday morning, a record number of viewers forced Japanese internet group CyberAgent to restrict access to games as its video streaming service reached its limits. But record views are not enough. What the company really needs is for country’s legal sports betting market to open up.
Abema, CyberAgent’s streaming service, has Japan’s streaming rights to the Qatar tournament. Viewers of this week’s Japan-Croatia match topped 23mn viewers, breaking the record from Japan’s previous game against Spain.
Shares of CyberAgent are up a tenth over the past month. Investors hope the group will find a way to monetise the surge in viewers and traffic. CyberAgent trades at 26 times forward earnings, about double that of local peers in two of its core business areas: advertiser Dentsu and gaming company Square Enix.
For now, however, this optimism has little to back it up. CyberAgent has spent heavily on extra computer servers for World Cup traffic. Plus, analysts estimate that it has paid as much as ¥20bn ($150mn) on securing streaming rights for the game. Abema itself has posted an operating loss for the past five years. That trend is unlikely to reverse this year.
Gambling could change that. CyberAgent offers an online betting service that allows users to watch livestreams of motorcycle races on Abema and buy tickets. Abema’s sports betting service Winticket has been one of its most successful businesses.
Unfortunately, viewership for motorcycle races is tiny compared with football’s. Gambling in Japan is legal only for a few sports including horse, bicycle, motorbike and motorboat racing, but not individual football matches.
Sports betting on football and baseball is estimated to be worth more than $50bn a year in Japan. Should laws be relaxed, this would boost CyberAgent revenues, which were $5.2bn in fiscal 2022 ending in September.
Until that day comes, Abema should not expect any big wins from streaming demand in the near future.
World Cup/CyberAgent: sports betting will determine fortunes of streaming service Republished from Source https://www.ft.com/content/0afca077-9764-41dc-9233-9ffa7c5f9600 via https://www.ft.com/companies/technology?format=rss