The Itch for Twitch
Amazon’s little e-sports streaming site is redefining the TV business model.
In August, producer-director Bernie Su and the rest of the creative team behind the scripted, AI–themed series Artificial won an Emmy for Outstanding Innovation in Interactive Media.
But the series is on Twitch, a platform that airs live streams of people playing videogames. Is that even "TV"?
Twitch, which Amazon acquired in August 2014 for $970 million, isn't TV the way Disney+ or HBO Max are. But its endless flow of user-generated content, its growing audience and its diversified, ad-supported model have made it one of the most exciting — if overlooked — streaming platforms.
Operating out of San Francisco's financial district, Twitch has benefited from the rise of e-sports, or the evolution of videogaming into as watchable an enterprise as the NFL or NBA.
From July through September, Twitch streamed around 2.6 billion hours of live content, far more than YouTube (595.3 million), Facebook Gaming (124.1 million) and Microsoft Mixer (107.5 million), according to Arsenal, an analytics firm.
Amazon doesn't break out financials for acquisitions, but Twitch makes money in a few ways. The primary revenue sources are display and video ads from blue-chip brands eager to reach a coveted male-dominated demo aged 12 to 34. They pay up for an "advertiser-safe" environment built around vetted games like "Fortnite" and "League of Legends."
Twitch is also the "broadcast" home to e-sports leagues such as the powerful Overwatch, and it makes sponsorship money from those relationships. Plus, Twitch allows users to subscribe to favorite players' channels for five dollars a month.
"Amazon and Twitch make great partners," says Jana Werner, head of content development and programming for Twitch.
"We have a young, very digitally engaged audience that they don't necessarily have, and they want that audience to grow and thrive. They've enabled Twitch to continue to innovate by being the absolute best place to commune around live content." Unlike Amazon Prime Video, which invests billions in original series, Twitch has a low-cost, low-risk, user-generated content model, much like Google's YouTube.
On Twitch, the "streamers" — gamers, some of them pros who live-cast — are the stars, and they get paid on a revenue-share basis. Some earn more than $20,000 a month, including tributes from fans and a portion of subscriptions (the most popular streamers take a 70 percent cut). They also receive an unspecified portion of ad revenue.
With his 14 million subscribers, Tyler Blevins, aka "Ninja," was Twitch's most popular streamer when he bolted to Microsoft Mixer in August (he cited harsh comments in Twitch's popular chat rooms as a reason for leaving).
Arsenal says his departure has had little to no impact on viewership. Twitch began nearly a decade ago as part of a broader, youth-lifestyle-focused "web video" platform known as Justin.tv. By 2014, the Twitch component was ranked fourth in peak U.S. internet traffic. Backers naturally zeroed in on the videogames.
Lately, Twitch and Amazon have discussed further broadening programming, to include more scripted series like Artificial and live-streamed sports and events. Twitch was among the first companies to stream terabytes of live video; connecting to the cloud-computing resources of Amazon Web Services has helped.
Amazon has shown live content licensed from the NFL and NBA on Twitch for several years. And in October, Twitch signed a two-year deal to live-stream every game from Australia's National Basketball League (NBL), home of LaMelo Ball (a star of the Facebook Watch reality series Ball in the Family).
"People crave community, stories and watching competition together," Werner says. "It's the same energy of a good story told around a campfire or watching a game at a bar. Twitch makes it more engaging than just watching a broadcast stream, whether it's traditional sports like the NBA or NFL, videogames or live music performances."
This article originally appeared in emmy magazine, Issue No. 11, 2019
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