El NEGOCIO de La VELADA DEL AÑO | ¿Es RENTABLE el MODELO de IBAI?

The Business Behind La Velada 4

Overview of La Velada

• La Velada 4 is a boxing event featuring influencers and YouTubers, selling 880,000 tickets in under an hour at Santiago Bernabéu.

• The event attracted significant attention not just from internet natives but also from a broader audience across Spain and Latin America.

Monetization Strategy

• The video explores why the event was streamed for free on Twitch instead of monetizing through ticket sales or television rights.

• Typically, broadcasting rights for such events are sold for millions due to their high viewer counts.

Value of Broadcasting Rights

• Sports events command high prices for broadcasting rights because they attract massive live audiences, appealing to advertisers.

• For instance, the Super Bowl sells advertising space at premium rates due to its large viewership.

Comparison with Major Sports Contracts

• In 2021, the NFL signed TV rights deals worth $110 billion over ten years; Amazon pays $1 billion annually for exclusive Thursday Night Football rights.

• The Indian Premier League (IPL) sold its broadcasting rights for approximately $6.2 billion over five years, highlighting lucrative sports contracts.

Unique Approach of Ibai

• Contrary to expectations, Ibai chose to stream La Velada for free on Twitch, which he believes is a strategic decision.

• By combining influencers and boxing matches, Ibai taps into two powerful attention-grabbing elements: social media influence and live combat excitement.

Attention Dynamics in Events

• Dana White's insights emphasize that physical confrontations draw immediate public focus; this principle applies to La Velada as well.

• Anticipation builds around fights through speculation and hype, creating a demand that culminates in the live event experience.

Origins of La Velada Concept

• The idea originated from a casual conversation during a livestream on January 22, 2021; it evolved into an actual event after initial discussions between popular streamers.

The Rise of a Major Twitch Event

Overview of the Event's Growth

• The event has become the most-watched sports event in Twitch history, peaking at 1.544 million simultaneous viewers and averaging 1 million viewers.

• Attendance has significantly increased over the years: from no tickets sold during the first event due to COVID-19, to 12,780 in the second, 67,000 in the third, and 81,000 in the fourth.

Sponsorship and Financial Viability

• As viewership grows, sponsors are more willing to invest; initial skepticism fades as demonstrated success attracts attention.

• Notable sponsors for this latest event included major brands like Vicio Prime and Spotify, indicating substantial financial backing.

The Concept of Flywheel

• The speaker introduces Jim Collins' concept of "flywheel," emphasizing that initial struggles can lead to exponential growth if managed correctly.

• A flywheel requires consistent effort; early challenges can be overcome with persistence and strategic actions.

Mechanisms Behind Successful Business Models

• Transformations within companies occur gradually through sustained efforts rather than sudden breakthroughs.

• Using Amazon as an example, lowering prices attracts more customers which leads to increased competition among sellers—creating a self-reinforcing cycle.

Application of Flywheel to Ibai's Events

• Ibai is transforming his audience into a more valuable asset by shifting from general content consumption (like YouTube videos) to live sports events.

The Impact of Free Events on Audience Growth

Benefits of Offering Free Events

• The event is free for viewers, allowing a broader audience reach. Initially, selling rights to a television network may not have been financially viable.

• A large viewership from the first event leads to increased popularity and engagement with regular content, creating a cycle where more people return for future events.

• Providing significant value at no cost encourages many viewers to eventually purchase tickets for subsequent events, demonstrating the effectiveness of offering free content.

Sponsorship and Business Growth

• As the audience grows, it becomes easier to attract sponsors who are willing to finance part of the costs due to increased visibility and reputation.

• The success of each event builds momentum (the "flywheel" effect), making it easier to book well-known artists and celebrities who want to participate in future events.

Future Opportunities and Sustainability

• There are potential avenues for business expansion such as merchandising, additional sponsorship types, or subscription models that offer extra content while maintaining free access.