*Twitch is where millions of people come together live every day to chat, interact, and make their own entertainment together.* [Source](https://www.twitch.tv/p/en/about/) ## Twitch is a platform for live, interactive broadcasting Twitch started out as a live streaming service for games, but now lists games, music, talk shows, sports, travel & outdoors, just chatting, food & drink and special events as their categories. The company evolved from Justin.tv on which founder Justin Kan broadcasted his life 24/7 and popularized the term lifecasting. In 2007 the platform extended, allowing other to stream as well, broadcasting within their own live channels. In 2014 Justin.tv rebranded into Twitch.tv. In 2014 [[Amazon]] officially acquired Twitch for a reported $970,000,000. ## T-Algorithm Assessment -> *For an older assessment, look at [[Twitch#Assessment 2015]]* -> *Created for the Prof G Strategy Sprint, October 2020, based on [[T-Algorithm]]* Link to final project: https://1drv.ms/b/s!AqOZTZQjL_UzqvcnyymraVds5H0Kpg?e=xTIagG Direct competitors (Live game streaming services): * [[YouTube]] Gaming: https://www.youtube.com/gaming * [[Meta (Facebook)]] Gaming: https://fb.gg * (Mixer: Dead, previously by [[Microsoft]], just merged with Facebook Gaming, lots of learnings, though). So essentially we have Amazon, YouTube and Facebook in the mix. I will try and separate the sub-brands from the parent ones, but connect them back where it makes sense. Wider competition (Live streaming services): * [[TikTok]]: https://www.tiktok.com/ * Periscope: https://www.periscope.tv/ * Instagram Live / IGTV: https://www.instagram.com/ * (Snapchat Live: https://www.snapchat.com/live/) ### Appeals to Human Instinct Twitch goes all out with an emotional brand. The first thing you will see on the [about page](https://www.twitch.tv/p/en/about/) is an invitation to join chat. Indeed the chat functionality is so central to the experience that "Twitch chat" is almost a personified brand in the community. The brand is bright cheerful and full of humor, "community" is one of the most used words in their company introduction. Beyond that they have a strong partner program, not only taking care of the broadcasters, but providing a lot of tools for the community to support them. Verdict: Advanced 💙 [YouTube Gaming](https://www.youtube.com/gaming) is just a part of YouTube live, which is just a part of YouTube. To the extent that makes you wonder why they even have a brand / specific feature around gaming? It is known that Google did bid for Twitch when Amazon acquired it and created YouTube Gaming as a result, which they [closed in 2018](https://techcrunch.com/2018/09/18/youtube-to-shut-down-standalone-gaming-app-as-gaming-gets-a-new-home-on-youtube/) and rolled it into main YouTube. It looks to me they understand the size and potential of gaming as a community and market, but failed to grasp pretty much every other aspect around it. This is literally just a filter on their normal content, which is pure "more for less": an endless isle of things to watch, somewhere buried in there. That makes it hard to evaluate, but I will treat "Live Gaming" as a subgroup that is not managed very well within the YouTube universe. Verdict: Intermediate 🧁 [Facebook Gaming](https:/fb.gg) is very utilitarian. It looks like an adapted / simplified form of a Facebook page. You can browse games and streamers as well as tournaments. The UI looks looks very simple, neutral and borderline emotionless and .. well, like Facebook. Each stream is treated as a Facebook post, so instead of a chat it's comments. I think although Facebook Gaming tries to be Facebook, I'd argue it actually fails at that. It's not effective to bring together people and fostering relationships, it's feels more like a consumption play. Something I look at and share in my feed, but I don't interact with the content per se. It feels tacked on, just another source of content that can be shared and talked about. Verdict: Novice to intermediate 🧁 [[TikTok]] has live streaming. It's very personal, very on-brand with the app and people use it mostly as a "hang out with fans". It's well integrated, easy to discover in the app, there is a lot of interaction going on between viewers and broadasters, including "gifts". Verdict: Advanced 💙 [Periscope](https://www.periscope.tv/) / [[Twitter]] Live: is a live streaming service owned by Twitter. Data is hard to come by, but it seems it has around [10 million users, 1.9 million active daily](https://comparecamp.com/periscope-statistics/) and a young audience with 75% of users between 16 and 34. The UI seems outdated and it's hard to discover good content. It's about news, getting a message out and you have to build your network to make sure people will see it. Verdict: Novice 🧁 Instagram Live / IGTV: TBD ### Career Accelerant Twitch might be owned by Amazon, but due to it's strong separate brand I would rate them as separate entity. There are around 9700 Twitch employees on LinkedIn. 482 of those previously worked at Microsoft, Google, Facebook or Amazon. So there isn't a big pull from the other big tech companies / competitors. On Glassdoor the company has a rating of 3.4 / 5 and only 55% would recommend Twitch to a friend and only 62% agree with their CEO. It is a little bit better on Indeed, but looking closer there are also a significant amount of negative reviews. Verdict: Novice 👎 **How does the competition do?** Google and YouTube are far and away the most advanced here. Leading engineering paired with good compensation and a strong brand makes them 🔥. In fact, according to LinkedIn more people went from Twitch to Google / YouTube (105) then the other way around (88). Facebook is still a 🔥 accelerant, but due to [[Meta (Facebook)#Facebook's effect on society negative view]] it might not be for long anymore. According to LinkedIn more people went from Facebook to Twitch (72) than the other way around (45). **Sources**: * Glassdoor: https://www.glassdoor.co.uk/Overview/Working-at-Twitch-EI_IE639426.11,17.htm * Indeed: https://www.indeed.com/cmp/Twitch/ ### Growth + Margins In 2015 Twitch had 1.7 million broadcasters streaming every month, 241 billion minutes of video streamed and 550k average concurrent viewers. More interestingly, they had an average monthly view-time per user of 421.6 minutes - 7 hours! Compared to 291 minutes (4.85 hours) on YouTube! So a VERY loyal and engaged fan base. In 2019 it was 600+ billion minutes watched, 17.5 million avg. daily visitors, 1.6 million average concurrent viewers and 400+ million unique streamers going live every month. With more than half of all Twitch users between the ages 18 to 34, and 14% ages 13 to 17. 3 it's a very young age group. This is lower end Facebook and more Instagram / TikTok territory. The average viewers grew steadily at around 25-30% until 2019, where it leveled off, mostly due to heavy investments by Microsoft, but also YouTube and Facebook, poaching top streamers from the platform. With COVID however there was a spike, growing the active viewer numbers by 83% since January 2020. In terms of margins, Twitch has multiple sources of revenue: * [Twitch Advertising](https://twitchadvertising.tv/): Influencer-marketing based advertising platform. * [Twitch Turbo](https://www.twitch.tv/turbo): Pay 8.99.- per month for ad-free viewing. * [Amazon Prime Gaming](https://gaming.amazon.com/): Rundle-integration with Amazon Prime. * [Streamer Subscriptions](https://www.polygon.com/2018/6/25/17502380/monteization-youtube-channel-memberships-patreon-twitch-affiliate-partner): Viewers can subscribe to their favorite streamers for 4.99 (9.99, 24.99), which is split 50/50 between the streamer and Twitch. * [Bits](https://www.twitch.tv/bits): Digital tipping made through Twitch’s own currency that can be obtained through real money. A Nielson SuperData report estimates that Twitch generated $1.54 billion USD (£1.18 billion) in GVC last year, compared to YouTube Gaming’s $1.46 billion (£1.115 billion). GVC, the report explains, is the sum of ad revenue, donation revenue, subscription fees, and sponsorship revenue earned on any kind of gaming-related streaming video content, whether it’s a livestream or video on demand. As long as the content is about a videogame title or event, its revenues count toward GVC. According to Forbes, Twitch was hoping to see ad revenues between 500 million-600 million in 2019, with the service eventually hitting $1 billion. That would put the revenue from Twitch's non-ad products at around 900 million to 1 billion. Meaning they make twice as much with subscriptions than with advertising, which is pretty strong. Verdict: Came back strong after a slow 2019 due to increased competition 👍 **How does the competition do?** While YouTube massively outstrips Twitch in terms of viewers (2 billion monthly viewers to 140 million at last count), the smaller rival is clearly seen as enough of a threat that YouTube has offered content creators big money to stay exclusive as well as defect. YouTube closed down its standalone gaming app in 2018, bring live gaming streaming into its main app. More recently Facebook Gaming is reported to offer much better payouts for gamers than rival platforms. Facebook offers revenue to who stream through its Gaming Creator program through a partner program which pays creators, with an additional tipping-based revenue stream – as offered by Twitch. **Sources:** * Twitch ad network page: https://twitchadvertising.tv/audience/ * Twitch statistics: https://twitchtracker.com/statistics * Twitch Revenue and Usage Statistics: https://www.businessofapps.com/data/twitch-statistics/ * Twitch generated more revenue than YouTube Gaming in 2019: https://www.theloadout.com/twitch/youtube-revenue * Amazon’s Twitch Not Meeting Ad Revenue Expectations: https://www.forbes.com/sites/mattperez/2020/01/08/report-amazons-twitch-not-meeting-ad-revenue-expectations/ * YouTube statistics: https://www.businessofapps.com/data/youtube-statistics/ * Facebook statistics: https://www.businessofapps.com/data/facebook-statistics/ * Facebook Gaming grows 210% in 2019 as it battles Twitch, YouTube: https://venturebeat.com/2020/01/09/facebook-gaming-grows-210-in-2019-as-it-battles-twitch-youtube/ * Livestream Viewership Grew 99% In A Year, Microsoft’s Mixer Grew 0.2%: https://www.forbes.com/sites/paultassi/2020/05/16/report-livestream-viewership-grew-99-in-lockdown-microsofts-mixer-grew-02/#42e3f1976cb7 ### Rundle ### Vertical Integration How I see the traditional vertical steps of the ladder in live streaming: **Raw materials -> Broadcasters and events** These are sources of content that Twitch turns into their products. As such there are three major groups: * **Individual streamers**: Are turned into [partners](https://www.twitch.tv/p/partners/) if they reach a certain size / relevance. The path to become a partner is gamified along the way, checking off criteria to make sure they are consistent and a fit for the platform. Only partners have access to the monetizing features of the platform. So the gamified bootcamp keeps streamers engaged initially while the monetarization keeps them engaged long-term. * **Hero streamers**: Or simply: stars with in some cases millions of followers. In some cases Twitch will sign exclusive contracts with individuals to bind them to the platform. This has become more common as Facebook Gaming (and Mixer) started paying huge sums to poach streamer from Twitch. * **Events:**: This is similar to exclusive broadcasting rights, for example for huge esports events (League of Legends world championship), but more recently also music festivals. They also signed a contract with the NBA to [live stream Minor League games with fan-interaction features](https://variety.com/2017/digital/news/twitch-nba-g-league-live-streaming-games-1202638843/) Binding top streamers to the platform and signing exclusive streaming rights for events is essentially going vertical in the raw materials category as it secures access and prevents the competition accessing the same resources. Verdict: 🔥 **Design -> Streaming Apps & game integration** Twitch creates very good apps. [Twitch Studio](https://www.twitch.tv/broadcast/studio) is their free streaming software designed for new streamers. So instead of having to look into a number of third party solutions like OBS, XSplit etc. Twitch offers a quick and easy way to get high quality results. Finally, Twitch has a great [API](https://dev.twitch.tv/) to let game developers stream their games directly to Twitch, but also give community developers the ability to extend the platform. This gave rise to memes like "Twitch Plays" or provides "hover information" for certain games. Verdict: 🔥 **Manufacturing -> Streaming ingest & distribution technology** This is the technology of the platform itself as well as the in- and out-technology that Twitch creates. The platform itself is solid. It has been ingesting and streaming absurd amounts of video for years now with relatively few [outages](https://status.twitch.tv/history). The company also invests in adjacent technologies to solve adjacent issues like rights management. Recently Twitch introduced "Soundtrack by Twitch", a rights cleared music library and tool designed specifically for Twitch creators. Verdict: 👍 **Distribution -> Endpoints to watch the content on as well as discoverability** Their streaming apps are on every platform, including: Web, iPhone, iPad, Apple TV, Android, Windows, macOS, Fire TV and Roku (non-certified). With Amazon as parent company, they do have good access to the TV, but given their extraordinarily young audience, I think mobile is more important. Verdict: 👉 **Consumer life cycle -> Loyalty & merchandising** ### Benjamin Button Product Twitch does not have much AI or self-improving systems. If there is a recommendation system, it seems rudimentary. That said, they achieve immense stickiness by focusing on community. Not only the brand is focused on community interaction, so are the features and the UI. Streamers have numerous tools to attract, manage and cater to their viewers, turning them into regulars and into subscribers. The more users are active in a channel, the more value there is for every other viewer. In short: Twitch is a social Benjamin Button - something that you don't want to leave as you interact with the community, find friends and invest in a channel. This also caters to another aspect of Twitch: Retention and viewing time. The numbers hint that the average viewing time per user on Twitch is way higher than Facebook Gaming and even all-up YouTube (which has more users, but each are not watching as much). I would argue that the Twitch community aspects make viewers stay longer and more loyal. ### Visionary Storytelling There is honestly not much Yogababble here. Twitch is laser focused on bringing together people around live broadcasting content. * First thing on their about page: *We saved you a seat in chat - Hey Guys.* * Their mission statement: *Twitch is where millions of people come together live every day to chat, interact, and make their own entertainment together.* * Promise to viewers: *Unabashed fans, welcome home. Watch what you love, connect with streamers, and chat with tons of communities.* * Promise to content creators: *Your creative content thrives here. Bring your passions; we’ll help you build a community around them.* This is a master class in clarity and approachability, especially since Facebook and YouTube are so bad at it. Also, Twitch started shifting it's language away from just gaming to interactive live broadcasting, including music, talk shows, sports, travel & outdoors, just chatting, food & drink and special events. They signed some ambitious events and sports leagues and there is a strong drive to extend into other topics. While they "won't save the world" with this, they are most compelling player to extend into remote events and festivals as the world re-organizes itself around COVID-19. Verdict: 👍 ### Likeability Emmett Shear is the current CEO of Twitch and has been with the comapny since he co-founded Justin.tv in 2006. He doesn't really stream on Twitch, [Tweets](https://twitter.com/eshear) occasionally and with long hiatuses in between, his [Instagram](https://www.instagram.com/sarbandia/) is private and there isn't much visibility around him. This year, Twitch faced allegations around a toxic work culture allowing systemic sexism, racism, and abuse. This was backed up by current and ex-employees. Additionally well-known streamers were exposed for sexual harassment as well, in some cases with underage partners. The scandal started in June as part of the #MeToo movement and still goes on today. While Twitch reacted with press releases and by announcing a [Twitch Safety Council](https://blog.twitch.tv/en/2020/05/14/introducing-the-twitch-safety-advisory-council/), the controversies didn't stop and did indeed get worse as the council members came under fire themselves. While the brand is hyper focused on enabling community building and does a great job of creating the tools and identity around it, they seem very bad at maintaining their own community. Verdict: 👎 **How does the competition do?** Well, I guess Twitch is lucky that Facebook is even less likeable and ... I'd say nobody really cares about YouTube as a brand. **Sources:** * Emmett Shear: https://en.wikipedia.org/wiki/Emmett_Shear. * Twitch Staff Cite a Workplace Culture Steeped in Sexism, Racism, and Abuse: https://www.fanbyte.com/news/twitch-staff-cite-a-workplace-culture-steeped-in-sexism-racism-and-abuse/ ### Other data Nielsen announced an in-depth, first of its kind research study of esports fan attitudes and behaviors in the U.S. to feature data from Twitch, the leading service and community for multiplayer entertainment: https://www.nielsen.com/us/en/press-releases/2018/nielsen-releases-unprecedented-insights-on-esports-fan-attitudes/ ### Strategic recommendations Go vertical with Amazon: Offer Amazon produced, transacted and delivered merchandising for partners Go vertical with an outrageous content bid: The Olympics, Formula 1 or soccer world cup. -> Most popular sports in age group? Amazon has game studios. RUNDLE IT UP! Extend the Rundle from digital goodies into real ones. ## Amazon influence Twitch -> Twitch Prime -> Prime Gaming New name. More great benefits. Prime Gaming continues to include a free monthly Twitch channel subscription, tons of free content in your favorite games, 5+ free PC games every month, and more with your Amazon Prime membership. ## Twitch & gaming as a supercharger between brand and consumers Looking at gaming chairs as a strong signal. I think it was the [Maxnomic](https://www.needforseat.de/en/maxnomic-originals) Pro Series that was one of the first "canonical gaming chairs". They made partnerships with the most known esports teams to create their own skins so fans could order a team chair. This added office chairs to the official merchandising lineup of most esports teams. Now others like [Secret Lab](https://secretlab.eu/) are also getting into this. ## Assessment 2015 -> *I looked into Twitch in 2015 as part of my annual digital trends talk. Specifically how digital games bleed into reality* Twitch in a nutshell: Gamers were fed up by not being able to watch and engage with their content, so they made up their own platform. So it's ESPN or Eurosport, but for video games. In 2015 Twitch had 1.7 million broadcasters streaming every month, 241 billion minutes of video streamed and 550k average concurrent viewers. More interestingly, they had an average monthly view-time per user of 421.6 minutes - 7 hours! Compared to 291 minutes (4.85 hours) on YouTube! So a VERY loyal and engaged fan base. Setting it further apart from YouTube was the great partner program. Whereas YouTube allowed you to upload things and at some point give you money, Twitch had 13.5k partners - special broadcasters that people could pay 4.99 per month to subscribe to them. For honestly not much tangible benefits except some emojis in the chat. Viewers mostly did this to support their favorite streamers. My analogy was: If YouTube is a blog, then Twitch is a social network. So, you have a platform with very specific content for a well defined audience, which is willing to pay regularly and substantial amounts of money for it, which in turn attracts people that can make a living creating live content on the platform. Even in 2015 Twitch was becoming the most successful platform for live events, mostly in the gaming scene. The 2014 League of Legends world championship final had [32 million viewers](http://www.ibtimes.com/league-legends-2014-champions-closer-look-winners-samsung-galaxy-white-1707879) - and btw. 1 million USD price money for the winners. So Twitch was there at the right time when game events exploded. Further, in 2015 Twitch expanded into other live content, streaming the [Ultra festival](https://www.twitch.tv/ultra) and supporting it with their full production crew. That led me to the prediction: "*I wouldn‘t be surprised if Twitch would bid for the digital rights to stream the Olympics by 2020*" I added that it wasn't likely, but also not unthinkable. I also looked at Meerkat (now Houseparty) and Periscope as signals for live video content apps & platforms. ## (One of) the most successful media campaigns in 2014 What did you get when you searched for „Samsung White“ in Google in 2015? Hint: It wasn't a white Samsung phone or TV. Instead it was the League of Legends team "Samsung White" - officially sponsored by Samsung, wearing Samsung swag. And did I mention that Samsung White won the 2014 LoL world championships? Remember that 32 million viewers? Let's do the math: * Hiring a team with the best LoL players in the world in 2014: Around 750k * Decking them out with Samsung swag: 50k * Getting 32m live viewers while your team wins + 1 year free earned media whenever someone talks about professional esports: Priceless Simply put, this was probably the most efficient media spending anyone did in 2014.