By: Adam Chebib
Introduction to Twitch
For many years now YouTube has dominated the online video space, especially when it comes to user created content. However, a new player has emerged in recent years to become a major player in the space. Twitch is a very popular online digital video streaming and broadcasting service with a whopping average of 46 billion minutes watched by users per month in 2018 and 3.3 million unique broadcasters per month. (“• Twitch Statistics (2019): Users, Viewers & Livestream Gaming Fun Facts”, 2019)
Twitch’s original foothold was based almost entirely off video games, where content creators would primarily live broadcast their gameplay
and often themselves on the edge of the screen via webcam while also interacting with viewers via a live chat. However since its early days twitch has vastly expanded into many other genres including ones traditionally not thought of as audience-friendly, with content now ranging anywhere from tabletop games-DJ sets-tv shows-music-talk shows to even professional sports and also having a major foothold on the e-sports industry. We’ll speak more on twitches evolution and expansion later. (“• Twitch Statistics (2019): Users, Viewers & Livestream Gaming Fun Facts”, 2019), (Stephenson, 2019)
Twitch can also be seen as an online streaming platform but also as a social network it has managed to build a bridge between the two and has generated a major user base in doing so. Twitches growth and expansion is a sight into not only todays ecosystem of video consumed content but the future as it starts to ask the question of how much life major networks have, as platforms such as twitch begin to affect their markets and viewership numbers.
When twitch launched in 2011, its focus was mainly on gaming as we stated previously and also on esports, where people would play video games and people would watch people playing games (Golby, 2019) and that still is the central of its core but it has evolved over time to where almost anything can be streamed live from people cooking at home to people playing poker to vlogs. Essentially today if a camera can be used to film it, Twitch can most probably host it, and with a user-base so big someone is destined to start watching it.
Today games such as Fortnite and its accompanying events being streamed via platforms such as twitch are out doing major tv networks such as the walking dead and the NFL draft in terms of viewership numbers (Geeter, 2019) and the platform also generates a large income for both the platform and the content creators with some content creators being able to make hundreds of thousands a month or even millions a year, we’ll get into the business model of it all later. (“How Much Do Twitch Streamers Make? Over $20 Million a Year.”, 2019).
During twitches first year it had gathered roughly 3.2million unique visitors each month, the company very rapidly grew. In its second year 2012 the visitor number jumped from 3.2 to 20 million which grew to an astonishing 45 million unique visitors a month in 2013 making twitch the #1 video streaming site in the video game category. Twitch’s fast rise gathered attention from the two big tech giants as both Google and amazon sought to acquire it with the later eventually acquiring twitch with $970 million all-cash deal.(Benjamin, 2019)
Twitch has rapidly evolved since its founding, shaking up the broadcasting industry along the way. It’s no longer just e-sports, Twitch now broadcasts Thursday night football games for the nfl. Many other brands have also taken interest in twitch with some even setting up their own Twitch channels. Twitch has truly turned into a mega giant today and for a long time there wasn’t much competition, Microsoft has their own similar service Mixer however whether it’s too late to the game to make an impact on twitch is unclear. (Barnes, 2019),(Benjamin, 2019)
Ownership, Business model, Competition
As mentioned earlier Twitch was purchased by amazon in 2014, since then many competitors are starting to appear. YouTube launched YouTube gaming in 2015 in response to compete with twitch, it was short lived with YouTube retiring it this year to instead revamp it as a gaming hub within YouTube itself (Gonzalez, 2019).
In 2016 Microsoft acquired beam and transformed it into now known Mixer, like twitch was, mixer is mostly aimed at gaming (Gonzalez, 2019). Mixer began causing waves this year when it began pinching big name streamers from twitch, luring some of twitches biggest names such as ninja and others (Bardwell, 2019), (Bardwell, 2019, 2nd article) with lucrative financial deals for exclusivity to their platform.
Even Facebook added to its Gaming creator pilot project with 21’st century fox also investing heavily into broadcasting platform caffeine. Amazon and twitch have more competition than ever, on that note however amazon’s twitch doesn’t appear to be phased, their market share is still extremely large, and their model doesn’t appear to be changing.
The Current Model:
Currently you do not need to have to register to view broadcasts, if you want to broadcast or participate in chats you are required to sign up to twitch which is free. Twitch appears to follow the concept of creating real time spectating environments where viewers cannot only watch their favorite streamers but also comment and interact with both the streamer and other viewers in real time. Twitch is also available to a large userbase through many mediums such as pc, gaming consoles and mobile devices through web browsers, dedicated twitch apps and also dedicated software for improved streaming of videos (“How Twitch.tv Works and Its Business Model”, 2019).
Twitch also uses events to gain greater ties with their users, by hosting real life events where they bring all their users streamers, viewers, partners and even brands together at events such as Twitchcon (“What is TwitchCon?”, 2019). This approach helps twitch build a tight knit community and keep people on their service.
The Business end:
Let’s dive into the deep end on how twitch generates money for both itself and partners
Advertisements: As every free streaming platform twitch runs part of its model off advertisements, it uses the standard IAB display, video media and native opportunities to run ads.
Subscriptions: twitch has two types of subscription services
- Twitch prime: Integrated with twitch’s parent company membership for their retail website amazon prime members get a free subscription to twitch prime. The benefits of twitch prime are mostly aesthetic however it also gives the subscriber the ability to donate half their monthly subscription to one of the streamers, roughly $2.50 dependent on region. Twitch prime subscribers also get free games every month, free in-game loot and some minor benefits in twitch(Beatman, 2019), (Fortney, 2019)
- Twitch turbo: roughly $8.99/month, the twitch turbo subscription makes the experience smoother by cutting out advertisements, increasing video storage and exclusive in chat emojis and colours and also priority customer support (“Twitch Turbo Guide”, 2019),(Fortney, 2019)
In-app purchases aka Bits: twitch has an in-app currency called bits, viewers can buy bits starting at roughly $1.40 for 100 about 1.4cents:1bit conversion, known as “cheering bits” users type cheer and the amount of bits they wish to donate depending on amount different animated emojis will appear in chat the more donated the larger and colourful they get. One cent of each bit is donated to the streamer with twitch taking the remainder. Since bits launch in June2016, users have sent more than $1billion Bits.(Fortney, 2019)
Amazon & NFL + more: As mentioned earlier twitch now streams NFL, twitch has also teamed up with privately-traded Pokémon company to allow users to binge-watch streams of Pokémon, twitch also streamed other professional content such as Saturday night live and others. Twitch also has exclusive streaming to many esports tournaments. (Fortney, 2019)
How streamers make dough:
There are mostly two ways or streamers to make money on twitch those who have been offered into the twitch partnership program receive ad revenue, donations and can also earn from subscriber numbers. Non-twitch partners can only get revenue from donations.
The social and industry ecology:
Twitch started off with an interactive niche it had similarities to YouTube but built an overall better model which isn’t strictly reliant on an ad base where advertisers much be kept happy, it has created a tight knit community where much of the revenue is based off subscriptions and viewers donating to their favourite creators a system that can be self-reliant and not as susceptible to issues competitors such as YouTube faced with “ADPOCALYPSE” (Thomson, 2019). Twitches social and industrial ecology works as a symbiotic relationship between all parties, the viewers support and watch the streamers which provides revenue through many different streams, which twitch takes a percentage off for supplying the services and twitch also works with other partners to broaden the content on the platform while allowing e.g the NFL to reach a wider audience.
A visual of Twitch’s ecology
Twitch has transformed the way we view and consume broadcasted media:
We’ve spoken earlier about how twitch has emerged as a social-media/Streaming platform hybrid but we haven’t spoken about how its changed the current idea of broadcasting, for years video content and tv was not truly interactive, sure you would yell at your tv during a sports cast but you never had any actual input. Twitch has transformed our view on this, your no longer just cheering or yelling at your screen, its now as if your in a sports arena interacting with other fans cheering (in many cases donating) with others to cheer on your team(esports or otherwise)/player on and in many cases actually motivating them to try harder as if you’re a crowd in Europe chanting on your favourite football team. As absurd as this may sound this is how twitch has transformed broadcasted media. Don’t believe me? Watch a few streams, you’ll witness how truly interactive this platform can be. Growing up as a child a signed jersey or book to my name by my favourite athlete would’ve meant the world to me. Today kids are making donations to their favourite streamers to get enough attention from that streamer to get their name shouted out during a live broadcast, as silly as this may sound its comparable to a parent buying a ticket for their child to sit front row at a sports stadium in the hopes of maybe getting a photo after the game. Perhaps now the transformation and shift are clearer to you.
Twitch has transformed so much, from the current business models of online streaming, to the way we interact when watching sports from home, the social and cultural shift this platform has accomplished is truly astonishing. It dwindles many of the larger mainstream shows at times in-terms of viewership. Twitch appears the be the direction many of the next generation are heading towards when consuming broadcasted content. In my opinion much of the appeal appears to be from personal interactions between viewers and creators, people like to be involved and see that when paying for a service much of the proceeds go towards the smaller guy than the major corporations/networks. Twitch has truly revolutionised streaming, the question now is as streaming continues to grow how will traditional tv respond?
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Images and videos
Cecilia D’Anastasio streams Overwatch on the Kotaku Twitch channel: https://www.techspot.com/guides/1555-how-to-stream-pc-games-twitch/
Bobby Quillard — Quillard Photography: https://www.sbnation.com/2019/10/8/20897184/twitch-streamers-gamers-self-care