Twitch – a gamers social network, a brave new world for marketers or Amazon’s bid for our TV future?

[quote]
“It wouldn’t surprise me to see Twitch become the new Netflix, appearing on any system with an Internet connection and a few players willing to play live.”[/quote]
– VentureBeat

Twitch as is a live streaming app that, at its simplest, allows people to watch other people play video games.  Like this idea or loathe it, The 3-year-old company reached a one million milestone in January 2014.   That means one million active broadcasters.  In a month.  In 2015, 100 million viewers spend 106 minutes daily watching live gaming on Twitch.  Over 1,000,000 broadcasters share their games live on Twitch monthly, inspiring viewers to become broadcasters themselves..  Influencers are the top 5% of broadcasters who have become “internet famous”.

To put the viewing figures into perspective, Twitch came in just behind web giants Netflix, Google and Apple as the place US web users like to go online during prime time..  Twitch is in a very “buzzy” market right now along with  live streamers Meerkat and Periscope though Twitch is the only social platform for gamers.  Twitch is already on pc, next generation consoles and mobile.  The fact that Amazon bought Twitch for  nearly a billion in 2014 may change the state of play for Twitch for ever.

What is streamed on Twitch?

Twitch content seems to fall into 2 main categories: e-sports and hobby playing.  E-sport or electronic sports is increasingly attracting both players and brands. For those not in the know, esports is professional competitive videogaming.  Not only do people game for a living, but there are professional commentators who sound exactly their hyperactive  regular sports equivalents.  One of the most popular tournaments is Call of Duty, where players win up to around £260,000.  According to The Wall Street Journal, last October, more people – 32 million — watched the streaming of  the on-line game League of Legends championship than saw the finales of “The Sopranos,” “24” and “Breaking Bad,” combined.

If you still doubt that e gaming is a legitimate sport, it has come of age with its first illegal drugging scandal.  British players will be subjected to random drug testing at competitive video game tournaments after Kory Friesen, a top player, admitted to taking Adderall  during an ESL tournament in Poland.  In an interview, which can be seen online, Mr Friesen admitted to using the drug, which is usually prescribed to people with attention deficit hyperactivity disorder, and said his former teammates were also using it.   He said: “We were all on Adderall. It was pretty obvious… tons of people do it.”  With the largest prize pool in the world,  roughly £6.5 million, at stake, it’s no wonder they felt under pressure to find a competitive edge.  E-sports is being taken so seriously now that there are now even scholarships for e-sports athletes, including one at Robert University in Pennsylvania.

Out of the million or so broadcasters on Twitch, the vast majority – 99-plus% – are fans who use Twitch to share their passion for gaming.  In the same way people use Facebook, Twitter or Reddit, Twitch has become a form of social media network for sharing the hobby of gaming.  When an anonymous Australian programmer streamed live footage of Pokemon Red in an emulator that was slowly played by thousands of spectators, it drew in a community of over 10 million viewers.  Watching the real-time streamers isn’t the same as watching T.V.  The audience can comment in real time,  “yell” from the on-screen sidelines, record the live streams, or they can host their own Twitch sessions and invite friends to watch virtually.  Twitch  has its own celebrities who have become “internet famous”.  While they may have gained notice first because of being experts at the games they play, more are developing a following through keeping their viewers entertained.  While Twitch is free, it offers a  subscription model that allows viewers to support both the Twitch community and their favourite streamers. Subscribers get perks like avoiding ads, gaining moderator status in live chat rooms and access to emoticons. If he wishes, any viewer can contribute to the prize money of a local game tournament or directly donate to streamers to keep them playing and entertaining.

Can brands market on Twitch?

According to Quantcast, nearly 94% of Twitch users are male and 64% of them fall into the sought-after consumer demo aged 18 to 34. This is a very attractive and normally difficult-to-reach demographic for marketers.  We would expect to see game brand marketing on Twitch, but what about non-gaming products?

Old Spice launched “Old Spice Nature Adventure,” on Twitch to introduce the new Old Spice Fresher Collection.  The campaign invited Twitch viewers to control a “live human” for three days in April over the video game viewing platform. Consumers could use the chat feature to command “Nature Man” to do whatever they want him to in a forest. It’s up to the viewers to decide what happens. As suggested by Old Spice, perhaps he can “give that antelope a massage,” or “eat strange berries.”  Old Spice called it is the first-ever crowd-sourced gaming experience by a non-videogame brand on Twitch.

To promote the second season of the HBO comedy series “Silicon Valley” the stars of Silicon Valley live streamed a Q&A for the Twitch community and, naturally, played games online during the programme.  Twitch live streamed the show’s pilot episode, marking the first time a network has done so on the platform. Silicon Valley and Twitch seem a natural fit, considering actor Thomas Middleditch (who plays main star Richard Hendricks on the show) already is a streamer on the site and the show is about a bunch of geeks.  But, more importantly, promoting “Silicon Valley” highlights how Twitch’s live streaming capabilities can be used, live streaming being in the marketing conciousness now,  with the releases of Periscope and Meerkat.

Can streamers make money on Twitch?

The answer will depend on how many viewers a streamer can attract.  Top streamers can earn anywhere from $1000 to $10,000 per month.  A pro League of Legends gamer and Twitch streamer Aphromoo makes $8000 a month from streaming.  Twitch partner pays $3.50 per 1,000 people that watch an ad during a stream.   However, people that run ad block will not be counted towards the total. Sometimes fans  turn off their ad blocks to watch ads to help support their favorite streamers.

When people like a stream, they can choose to become a subscriber. When somebody subscribes to the stream, Twitch gets $4.99 and the streamer gets half of that.  A subscriber will have the privilege of not viewing any ads while watching that particular stream that he or she subbed to. He or she might also get special icons or things that are custom made for them.  A popular stream can have 1000 subscribers easily and that will bring in another $2,500 monthly.

When you are watching a stream, often times you will see some donations pop up on the stream. The streamer will also thank the donator and his name is shown on it. Donators can also add a custom message if he or she wishes.Streamers usually set up minimum donation amounts to make them show up on the stream. Most streamers will have a minimum of $2 or more for it to show on the stream.  Donations can be in the thousands of dollars.  The good thing about donations is that the streamer gets a 100% of it. Donations are to show support for that streamer and to encourage them to keep on going.

What will ownership by Amazon mean?

Amazon bought Twitch shares for approximately $970 million in August 2014.  It was a twist as just the previous month it was reported that Google had agreed to acquire Twitch for about $1 billion. That deal, however, was never officially confirmed.

Michael Frazzini, vice president for Amazon Games, explained the Twitch purchase in  simple terms in an interview with Time magazine.

“I think it’s fairly safe to say at this point that on anything with a screen, games are the No. 1 or 2 activity,” he said.

Tom Standish, the Economist’s Digital Editor, gave an example of how that might work on the newspaper’s Babbage blog :

“From my perspective, I go over to Twitch because there’s a new game out and I want to see what it’s like… I’m probably quite interested in buying this game… (and now) Amazon can just put a ‘buy’ button, right there, underneath the video. So one way you can think about this is that Amazon has just bought access to millions of user-generated adverts for games.”

Another way of looking at it is that Amazon is making a bid for the future of T.V.  More and more content is watched on-line, rather than on a television set.  Amazon already sells the screens like the Kindle, Fire TV and Fire Phone.  Amazon has the content, not only from deals with Netflkix and the like, but with its own high-quality streaming content .  With the series “Transparent”, Amazon won its first Golden Globe awards.  Twitch brings its own infrastructure and a dedicated built-in audience into this equation. Brands seem to be responding to the marketing possibilities as in the last few months brands such as Coke, T-Mobile, Red Bull, Pizza Hut and Foot Locker have advertised on Twitch.  It seems fair to say that gamers aren’t the only people interested in Twitch these days.

***Update***

The “Super bowl of Gaming” aka the International is streaming on Twitch now.  They have smashed prize pool records by offering over $11,000,000.   There’s 246, 412 viewers currently.  Blog worthy Update, folks?  If you care to have a look, there is rampant sponsorship, over-the-top intros, glitzy stadium and  an orchestra..

http://www.twitch.tv/dota2ti