GLOBAL: In 2016, six billion hours of eSports were consumed - much of that in China - in a 19% year on year increase, but the slow pace of adspend suggests backers will have to play the long game, a new report shows.

IHS Markit's eSports and the Future of TV report estimates that the industry, primarily an online phenomenon with some encroachment from broadcasters for large events, received $280m from advertising revenue in 2016, a figure forecast to reach $1bn by 2021.

Despite the increased amount of time spent viewing eSports, a fragmented audience has deterred advertisers looking for the solid viewership of mainstream sports.

As a result, the industry has carved out a diverse revenue stream through rights sales and e-commerce, in addition to advertising, according to the Financial Times. In terms of medium, spend was directed into video, sponsorship and influencer marketing.

"The rapid growth of eSports audiences has attracted some the industry's largest media and technology companies to the genre, with the likes of Amazon and MTG [Sweden's Modern Times Group] acquiring key assets," said Ted Hall, research director for IHS Markit.

In 2014, Amazon acquired the game streaming platform Twitch for $1bn, amid a flurry of investment from games publishers, as well as Chinese e-commerce rivals.

"Some of these acquisitions are initiating shifts in eSports business dynamics, with players such as China's Tencent seeking to control assets across the value chain, and publishers moving into league operation," Hall observed.

Last year, 57% of all eSports broadcast was consumed in China: an average of 11.1bn streams that dwarfed North America's 2.7bn. As a result of this appetite, the Olympic Council of Asia announced that eSports would feature as a medal event in the 2022 Asia Games.

The industry's backers claim the eSports audience includes "some of the hardest to reach and most sought-after demographics for marketers and advertisers," according to games publisher, Activision Blizzard CEO Robert Kotick, speaking to investors.

Kotick emphasised the share of millennial fans, which is "two to three times higher than any of the big four US sports", and suggested that "long term", eSports could achieve a "similar scale" to the NFL's $12bn in revenue.

Dan Cryan, an analyst at IHS Markit and one of the report's authors stressed the industry's youth, but also the demographic potential of its millennial audience.

However, he cautioned, "demographic changes always take time".

Data sourced from the Financial Times, Guardian, Seeking Alpha; additional content by WARC staff