Twitch the new TV?

Introduction

Twitch is a very popular platform used to view and livestream video. Twitch lets anyone publicly broadcast their content via live video for anyone to watch, leave comments and possibly even participate in the content (“Twitch: Most Innovative Company | Fast Company”, 2019). Twitch is symbolic of democratization of content and financial flows we see everywhere in today’s gig economy  (Rubinstein, 2019). That and the fact that it’s user base has been constantly expanding during its eight years of existence, where for example it’s average concurrent viewers at any moment in 2016 were 617 thousand while that number jumped to 1 million in 2018 (“Drop the clicker. Twitch has a vision for the future of live television”, 2019) leads me to believe that Twitch is a social media company that warrants further investigation.

What is Twitch?

Jumping straight into it, twitch online service for watching and streaming digital video broadcast. It was founded, in its current form, in 2011 and originally its main focus was entirely on video games but since then it has expanded into streaming of artwork creation, music, talk shows, and even some TV shows (“Twitch: Everything You Need to Know”, 2019).
Its early steps

Twitch had its start as a startup called justin.tv created by the then Yale student Justin Kan, justin.tv was originally meant to create a “Big Brother Style” site which would allow people to stream their lives (Cook, 2019).
Its content was grouped in several categories, but of all the categories the gaming one grew very rapidly and soon became the most popular on the website (Lynley, 2019).

The birth of TwitchTV

Consequently, in June of 2011 (“The ESPN Of Video Games”, 2019) the company made the decision to spin of the gaming section as TwitchTV, the name being inspired by the term twitch gameplay. By 2014 twitch accounted for about 40% of all the live streaming traffic in the United States and 1.8 % this number being second only to Google, Netflix and Apple. In 2017 its audience size surpassed the legacy media network EPSN and it live streamed more content than ESPN, WWE and ML combined (“How Amazon’s Twitch Platform Makes Money”, 2019).

It is projected that by the 2020 the number of viewers of Esports will grow from 380 million to 589 million according to the research company Newzoo (“E3 Press Conferences Generated over 16 Million Hours Watched on Twitch”, 2019).
While it was mainly ignored by most of the mainstream media and big advertiser, the numbers speak for themselves, as strong evidence that such a platform for online games, gamers and spectators was long needed.

Important Points

  • Twitch is a live streaming platform
  • It’s a offers a community place for gamers and game fans
  • It boasts 3.9 million daily broadcasters, and 15 million daily Twitch viewers on average, average of 41,000 concurrent Twitch broadcasters, and 1.6 million concurrent Twitch viewers
  • Twitch also makes money through its two subscription models, the Amazon-affiliated Twitch Prime, as well as Twitch Turbo
  • Twitch also earns a cut of the site’s in-app currency called “Bits;” viewers buy Bits to fund live shout-outs to streamers they like

(“Twitch Revenue and Usage Statistics (2019)”, 2019)

 

Amazon Acquisition & Business Model

All this success did not go completely unnoticed as Google did try to buy out twitch for a cool 1 billion USD in May of 2014 (Spangler, 2019) (Takahashi, 2019). This deal did not go through but on August 25 Amazon acquired Twitch for 970 million US dollars (Kim, 2019).

Since the amazon acquisition the two ways Twitch earns money are its subscription schemes and advertising.

Fig 1, How Amazon Changed Twitch Live Streaming, By CNBC

Integrated Advertisements

Similarly, to all video sharing platforms such as YouTube, Vimeo and others, Twitch integrates advertisements into its streams and on the sidebars of its website which can range in price from 2 to 10 dollar per view. We do not know for certain how much Twitch earns from add revenue but according to estimates from Newzoo it’s around 173 million dollars (Takahashi, 2019).

Twitch Subscriptions

Twitch offers two primary subscriptions services. The first one being a regular subscription working in tandem with the Twitch Partner Program. The Twitch partner program allows a content creator who has garnered a certain number of regular viewers and followers to enter in a contract with Twitch enabling their followers to subscribe gaining access to special privileged chats and special in chat tied to that creator emoticons. This subscription can be purchased at the prices of 4.99$, 9.99$ or 24.99$ per month of which a percentage goes to the content creator (“Twitch.tv – Partners”, 2019).

Twitch Prime

The second subscription, the Twitch Prime subscription is a premium experience on Twitch that is included with Amazon Prime (link here) and Prime Video (link here) memberships. Essentially if one has an Amazon Prime or Prime Video subscription, both services of the parent company, Twitch Prime allows the user to subscribe for free to a partnered content creator. It also includes bonus games and exclusive in-game content, exclusive emotes, and chat badge (“Customer Support”, 2019).

Twitch Turbo

Another subscription that warrants mention is Twitch Turbo. It costs $8.99 per month, the membership enhances the game viewing experience by cutting down on adds, increase video storage capacity, it also offers unique and exclusive chat emoticons and colors (“Customer Support”, 2019).

Bits

Fig 1. Twitch Bits, by Twitch

Bits are a sort of virtual currency, a twitch user can buy for real currency, and then use them to “cheer” their favorite content creator on the platform. They allow the user to send special message in a chat of the content creator that everyone viewing the channel can see, also Twitch pay their affiliates 1 cent per bit spent on their channel incentivizing them to promote their usage by their supporters (“Bits”, 2019) (“How to Make Money on Twitch”, 2019).

Partnerships

Fig 2. Games Ranking By hours played, by Newzoo.com

One important is the partnership with RIOT games as the 2018 League of Legends Championships organised by the video Game Company Riot garnered 9.6 million views and the final match had at one point 44 million concurrent viewers. To put these number in context this viewership rivals that of the US super bowl (“The 2018 League of Legends World Finals had nearly 100 million viewers”, 2019). The key thing to note here is that Twitch has a partnership with RIOT Games and rights to streaming the above-mentioned event.

Another key partnership that was recently announced was that with the video game giant Blizzard (link here). Where Twitch agreed to pay out 90 million dollars over two year in order to gain exclusive streaming rights for the “Overwatch League” (OVL) (“Sources: Overwatch League-Twitch Deal Worth At Least $90M”, 2019)(Walker & Grayson, 2019). The OVL finals in 2018 had reached 1.1 million average viewers, its regular season viewership saw a rise of 34 % while its final viewership saw 41% rise from the past year. (“Overwatch League Grand Finals Grows Audience to 1.1M Average Viewers”, 2019).

Competitors

As Twitch focuses on user created content, such as video game streams, different video game competitions, different kinds of live streaming content even something as In Real Life also known as IRL streaming where massive creators from the platform stream their daily lives, (Stelzner, 2019), almost making homage to the original purpose of justin.tv. Therefore, I won’t be comparing it to the standard suspects such as Netflix, Hulu, ESPN and other video sharing platforms.
Instead I will focus on two platforms that have arisen as a sort of response to the hegemony that Twitch has in the genre of livestreaming.

YouTube Gaming

This is YouTube’s answer to twitch. It’s its own video live sharing platform dedicated specifically to creating and livestreaming video game content. And while Twitch remains dominant with over 813 million hours watched in 2018. There are signs of YouTube Gaming catching up as it has seen an increase in the same year with 10% increase from March to September of 2018 alone, adding up to a total of 226 million hours watched in 2018 (“Top 5 Things You Should Know About YouTube Gaming in 2019”, 2019).

Mixer

Mixer is a free video game streaming service that is owned by Microsoft, it was originally named Beam, but it was later rebranded to Mixer due to issues with the name. It is a direct competitor of Twitch as it focuses on video game and video game related content streaming. It also offers integration and streaming capability from Microsofts extremely popular gaming system called Xbox further increasing its appeal (“What Gamers Need to Know About Microsoft’s Mixer Streaming Service”, 2019).
To prove its potential all I need to do is point out that within a few days of Ninja, a very popular content creator on Twitch, decided to jump ship and move to Mixer. Following this, talent agents that specialize in the video game industry have received many messages from former clients asking them if Mixer was looking for more talent (“Once dominant, Amazon-owned gaming platform Twitch has more competition and more problems – Digiday”, 2019).

User-base

As you might have surmised from the text so far, most of the user base is young. Over 55% of the user base are between the ages of 18 and 34. Also notable is that the overwhelming majority of the users are male, making up 81.5% of the platforms userbase.
A break of the viewer base by country shows that the majority of the user are from the US accounting for over a fifth of the website traffic, the US is then followed by Germany and Russia each of whom constitute about 6% of its traffic who are in turn followed by Brazil and UK each with a share of 5% (“Twitch Revenue and Usage Statistics (2019)”, 2019).

Fig 3, Viewership by Country breakdown, by similarweb.com

As can be inferred from the information stated above the most popular language of the streamers is English with all but one of the top 10 creators speaking English, the one exception being Russian (“The Most Popular Twitch Streamers, November 2019”, 2019).

The Twitch Ecosystem

Is it Innovative?

Twitch essentially created a new career for people, as well as opening a new avenue for advertiser to reach their desired audience. Before twitch video game streaming was not a career choice anyone could make. But with its advent, video gamers have gained a perspective and very lucrative career prospect (2019) and in the process became celebrities in their own right. Ones that interact with their audiences daily and in a more personal way than what a “standard” or legacy media celebrity ever could (Gandolfi, 2016)(Woodcock & Johnson, 2019) (“Twitch Users Watch Billions of Hours of Video, but the Site Wants to Go Beyond Fortnite”, 2019).
With its increased interest in IRL focused streams, and the announcement that they will be making a reality tv style show for aspiring content creators on its platform it is even entering the world of legacy competing with the ever-popular reality TVshows (“Twitch is making a reality TV show for aspiring streamers”, 2019).
Lastly with its many contracts and partnerships with various gaming companies, to broad cast their various competitions i.e. Esports it has not only opened a new market for advertisers, but it has created major competition for standard platforms. Managing number that rival even commercial TV shows and major sporting channels like ESPN (“Is Twitch the next ESPN?”, 2019).

 

Takeaway

Twitch enabled people who love video games, people who love watching them and who love playing them to have a place where they can interact with each other and play either for their own sake of for the enjoyment of others. In the process it created new career options for gamers, and new advertising avenues for companies. It has changed how the world perceives gaming and it has even taken content similar to “reality tv” to a whole new level and as such I believe it deserves a spot among companies that get to claim that they have changed how we interact with the world.

 

 

 

 

References

 

Cook, J. (2019). Twitch Founder: We Turned A ‘Terrible Idea’ Into A $970 Million Company. Retrieved 7 November 2019, from https://www.businessinsider.com.au/the-story-of-video-game-streaming-site-twitch-2014-10?r=US&IR=T

Drop the clicker. Twitch has a vision for the future of live television. (2019). Retrieved 7 November 2019, from https://www.fastcompany.com/90298949/twitch-most-innovative-companies-2019

E3 Press Conferences Generated over 16 Million Hours Watched on Twitch. (2019). Retrieved 7 November 2019, from https://newzoo.com/insights/articles/e3-press-conferences-generated-over-16-million-hours-watched-on-twitch/

Gandolfi, E. (2016). To watch or to play, it is in the game: The game culture on Twitch.tv among performers, plays and audiences. Journal Of Gaming & Virtual Worlds8(1), 63-82. doi: 10.1386/jgvw.8.1.63_1

How Amazon’s Twitch Platform Makes Money. (2019). Retrieved 7 November 2019, from https://www.investopedia.com/investing/how-does-twitch-amazons-video-game-streaming-platform-make-money/

Kim, E. (2019). Amazon Buys Twitch For $US970 Million In Cash. Retrieved 7 November 2019, from https://www.businessinsider.com.au/amazon-buys-twitch-2014-8

Lynley, M. (2019). Live-streaming site Justin.tv buffing up for e-sports channels. Retrieved 7 November 2019, from https://venturebeat.com/2011/03/10/justin-tv-esports-channel/

Rubinstein, P. (2019). The rise of the Twitch-preneurs and the evolution of tipping. Retrieved 7 November 2019, from http://www.bbc.com/capital/story/20180924-the-rise-of-the-twitchpreneurs-and-the-evolution-of-tipping

Spangler, T. (2019). YouTube to Acquire Videogame-Streaming Service Twitch for $1 Billion: Sources. Retrieved 7 November 2019, from https://variety.com/2014/digital/news/youtube-to-acquire-videogame-streaming-service-twitch-for-1-billion-sources-1201185204/

Your Bibliography: Takahashi, D. (2019). Google’s $1B purchase of Twitch confirmed (updated). Retrieved 7 November 2019, from https://venturebeat.com/2014/07/24/googles-1b-purchase-of-twitch-confirmed-joins-youtube-for-new-video-empire/

Takahashi, D. (2019). Newzoo: Esports could hit 380 million fans and $906 million in revenues in 2018. Retrieved 7 November 2019, from https://venturebeat.com/2018/02/21/newzoo-esports-could-hit-380-million-fans-and-906-million-in-revenues-in-2018/

The ESPN Of Video Games. (2019). Retrieved 7 November 2019, from https://www.forbes.com/sites/davidewalt/2013/11/13/the-espn-of-video-games

Twitch Revenue and Usage Statistics (2019). (2019). Retrieved 7 November 2019, from https://www.businessofapps.com/data/twitch-statistics/
Twitch.tv – Partners. (2019). Retrieved 7 November 2019, from https://www.twitch.tv/p/partners/

Twitch: Everything You Need to Know. (2019). Retrieved 7 November 2019, from https://www.lifewire.com/what-is-twitch-4143337

Twitch: Most Innovative Company | Fast Company. (2019). Retrieved 7 November 2019, from https://www.fastcompany.com/company/twitch

Bits. (2019). Retrieved 7 November 2019, from https://www.twitch.tv/bits

Customer Support. (2019). Retrieved 7 November 2019, from https://help.twitch.tv/s/article/twitch-prime-guide?language=en_US

Customer Support. (2019). Retrieved 7 November 2019, from https://help.twitch.tv/customer/en/portal/articles/973896-twitch-turbo-guide

How to Make Money on Twitch. (2019). Retrieved 7 November 2019, from https://influencermarketinghub.com/how-to-make-money-on-twitch-5-ways-to-earn-more-money-from-twitch/)

Once dominant, Amazon-owned gaming platform Twitch has more competition and more problems – Digiday. (2019). Retrieved 7 November 2019, from https://digiday.com/media/dominant-amazon-owned-gaming-platform-twitch-competition/

Overwatch League Grand Finals Grows Audience to 1.1M Average Viewers. (2019). Retrieved 7 November 2019, from https://www.hollywoodreporter.com/news/overwatch-league-grand-finals-grows-audience-11m-average-viewers-1245225?fbclid=IwAR1lzC576P8CXXNUwc0PWBOfR0xq1IEg6FoE7qfLHrWBMoVeynZY2qUWIgo

Overwatch League Grand Finals Grows Audience to 1.1M Average Viewers. (2019). Retrieved 7 November 2019, from https://www.hollywoodreporter.com/news/overwatch-league-grand-finals-grows-audience-11m-average-viewers-1245225?fbclid=IwAR1lzC576P8CXXNUwc0PWBOfR0xq1IEg6FoE7qfLHrWBMoVeynZY2qUWIgo

Sources: Overwatch League-Twitch Deal Worth At Least $90M. (2019). Retrieved 7 November 2019, from https://www.sportsbusinessdaily.com/Daily/ClosingBell/2018/01/09/overwatch.aspx?fbclid=IwAR2XbEgu10RnJfANUKtec0aUYIAo6U2NXl7iBRW_7_RGOXGi0s8WIcAV5rY

Stelzner, M. (2019). Twitch: What Marketers Need to Know. Retrieved 7 November 2019, from https://www.socialmediaexaminer.com/twitch-what-marketers-need-to-know-luria-petrucci/

The 2018 League of Legends World Finals had nearly 100 million viewers. (2019). Retrieved 7 November 2019, from https://www.riftherald.com/2018/12/11/18136237/riot-2018-league-of-legends-world-finals-viewers-prize-pool

Your Bibliography: The Most Popular Twitch Streamers, November 2019. (2019). Retrieved 7 November 2019, from https://www.twitchmetrics.net/channels/popularity

Top 5 Things You Should Know About YouTube Gaming in 2019. (2019). Retrieved 7 November 2019, from https://restream.io/blog/top-5-things-you-should-know-about-youtube-gaming-in-2019/

Twitch Revenue and Usage Statistics (2019). (2019). Retrieved 7 November 2019, from https://www.businessofapps.com/data/twitch-statistics/

Walker, A., & Grayson, N. (2019). Report: Twitch Signs Two-Year Deal With Overwatch League Worth At Least $115 Million. Retrieved 7 November 2019, from https://www.kotaku.com.au/2018/01/report-twitch-signs-two-year-deal-with-overwatch-league-worth-at-least-115-million/?fbclid=IwAR3t7qptoS4LJYE-7dfJxBOWU8qYf8by3qZ6s-K0DjLeZ0zKvrdBJkTlhi0

What Gamers Need to Know About Microsoft’s Mixer Streaming Service. (2019). Retrieved 7 November 2019, from https://www.lifewire.com/what-is-mixer-4156866

(2019). Retrieved 7 November 2019, from https://www.tubefilter.com/2018/10/10/twitch-streamers-earn-per-month-breakdown-disguisedtoast/

Is Twitch the next ESPN?. (2019). Retrieved 7 November 2019, from https://medium.com/@simonowens/is-twitch-the-next-espn-975ca7c085cb

Twitch is making a reality TV show for aspiring streamers. (2019). Retrieved 7 November 2019, from https://www.theverge.com/2017/12/19/16792998/twitch-stream-on-reality-game-show

Twitch Users Watch Billions of Hours of Video, but the Site Wants to Go Beyond Fortnite. (2019). Retrieved 7 November 2019, from https://www.nytimes.com/2019/09/26/business/media/twitch-twitchcon-ads-redesign.html

Woodcock, J., & Johnson, M. (2019). The Affective Labor and Performance of Live Streaming on Twitch.tv. Television & New Media20(8), 813-823. doi: 10.1177/1527476419851077

 

 

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