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Amazon bought two things with Twitch: 1) A social community 2) a monetization model. The video service itself is secondary. The past several years has shown th

by dexwiz 10y ago

Amazon bought two things with Twitch: 1) A social community 2) a monetization model. The video service itself is secondary. The past several years has shown the social communities grow organically. But its hard to make users adopt one. If you build it, they probably won't come. It's easier for a big company to buy one up than start one from scratch. (Think Instagram versus Google Plus). Second, Twitch is one of the few monetization models on the internet that is not pure ad based. Twitch does have ads, but streamers see more money through direct donations and monthly subscriptions. Also I am willing to bet the rate of ad blockers on Twitch is higher than the average site. Twitch has shied away from dark patterns that lock out adblocking users. I don't see any big modals or disabled video if I run an adblocker on Twitch. This is no doubt on purpose. So Twitch has locked on an monetization model of direct payment for digital content, which is rare on the internet. And best of all, it's completely optional. A video streaming service alone is nothing revolutionary. There are many Twitch clones that haven't reach near the same popularity. Its the community, and how its funded.

andreasklinger 10y ago
Two additional aspects: 1) Twitch can leverage the core support network that amazon can build Starting from aws - to prime video subscriptions 2) amazon will go strong into tv top as soon as apple and google take it more serious. at that point the got one of the bigger kinds of content under control - similar w/ google and youtube
- duaneb 10y ago
  What makes you think appletv will ever support Amazon video? The iOS app definitely needs chrome cast support.
  - dmoy 10y ago
    Given that, e.g. amazon stopped selling Chromecast, I don't have high hopes for interoperability here.
    - duaneb 10y ago
      Why do this to your customers. It means Amazon video money is wasted unless I own a fire stick--and who the hell owns a fire stick? The only reason to buy it is Amazon video!
      - dmoy 10y ago
        No, it is possible to get amazon video over chromecast. It's a bit hacky, but it works.
  - m_mueller 10y ago
    Recent move towards subscriptions and Apple's sign to give up on some revenue. What is it now, 15% after the first year? Could't that be viable for something like Prime video?
  - andreasklinger 10y ago
    i didnt mean that i think for now every of the big players will create their own apps/boxes - i imagine "prime TV" at some point the fragmentation will annoy customers so much that they will find ways to combine - but that's in 5-10 years
    - abraae 10y ago
      Might never happen. Chromecast is so cheap that its probably putting downwards price pressure on the devices themselves. And I don't personally have any issue flicking between all of my various "set top" boxes: chromecast, WD Live, Apple TV, old school dvd player, Tivo. After all, what issues does this fragmentation cause, apart from a bit of a mess of HDMI cables, and a shortage of HDMI ports on the TV?
      - duaneb 10y ago
        It's just a different type of DRM lockin. It's absurd the store from which we buy content can dictate how and where we consume it.
deleted 10y ago
[deleted]
ben_jones 10y ago
They bought, in one form or another, the very phenomenon of video game addiction. I'd love to see their user activity numbers because I really believe a large portion of the twitch demographic spends Facebook-esque # of hours on the site per day. And here's the thing, people love Twitch. Their seen as a champion of gamers that allowed streamers to stream, giving monetization strategies as a gift.
cpeterso 10y ago
> The active engagement of Twitch viewers can often help boost sales for games that prove popular among live streams. Can users purchase games (from Amazon) directly through Twitch? Amazon could offer streamers a referral cut, too.
- throwanem 10y ago
  That seems like posing a real challenge for Amazon, simply because the entire PC game market belongs within reasonable margin of error to Valve, via Steam. I don't know as much on the console side, but the impression I have is that that's moving more toward digital delivery as well, via the various console manufacturers' storefronts. Not sure how Amazon would be able to find a meaningful entry into that particular market.
  - deleted 10y ago
    [deleted]
- bloaf 10y ago
  I feel like selling the games directly on a twitch stream page would be a little too boorish. It would make every streamer immediately look like a paid advertiser. I think a smarter strategy would be to let the streamers advertise peripheral items (wanna order the beer I'm drinking?) and to encourage the viewers to buy things for the streamers to feature in their show (especially the crafty streams.)
iotku 10y ago
>Twitch has shied away from dark patterns that lock out adblocking users. I don't see any big modals or disabled video if I run an adblocker on Twitch. This is no doubt on purpose. I vividly remember this not being the case, whereas (at least in partnered streams) if twitch detected an ad-blocker it would stop the stream and then fill your screen with recommendations to subscribe to the streamer. What ended up happening if I recall correctly was the adblockers would just block the anti-adblock screens so they were rendered ineffective. I'm pretty sure there was other efforts, but I found this on their blog [1] [1] https://blog.twitch.tv/experiment-with-advertising-on-partner-channels-6eb6ecee7ef7#.64149468d https://blog.twitch.tv/experiment-with-advertising-on-partne...
- calgoo 10y ago
  I watch an average of 8 hours of twitch daily while working from home. I use adblockers without issues on their site. The only thing that I had to mess with was uMatrix, but that happens everywhere, especially with so many CDNs etc loading content.
ChuckMcM 10y ago
If this thesis holds true: > The past several years has shown the social > communities grow organically. But its hard to > make users adopt one. If you build it, they probably > won't come. It's easier for a big company to buy one > up than start one from scratch. (Think Instagram > versus Google Plus). Then the best use of someone's time might be to start as many social networks as possible on the possibility that one of them develops enough community to go "big." At which point you sell it to the highest bidder. Sort of "community farming" on a meta level.
- NhanH 10y ago
  If all else equal, I'd imagine that's true. However, starting multiple things while keeping high product quality might not be that simple, despite popular belief that social networks are "easy".
- paavokoya 10y ago
  Reminds me of irl communities where artists and entrepreneurs start local, homegrown businesses (think portland hipster) and then giant corps come in, tear down the old housing, throw up 5-story Ikea condos on every block (along with the white-bread cafes and clog shops) and ride the "trendy neighborhood" wave for a decade or two until the money leaves for another cool neighborhood
- forrestthewoods 10y ago
  My rule of thumb is that if you can get 100M monthly users you can sell your company for $1B. It doesn't matter what your product or platform or service is. It doesn't even matter if you have any revenue. If you can get a hundred million monthly users then you can sell for 1 billion dollars. At least that's what I've observed over the past few years. Twitch was bought $1B with a mere 50M users. But highly engaged users with successful monetization. So it fits my model. WhatsApp was bought for almost $20B under the assumption they could hit 1B users. A 2x premium for being so large. So roughly $5 to $20 per user. That seems pretty reasonable.
  - TeMPOraL 10y ago

by dexwiz 10y ago

andreasklinger 10y ago

Two additional aspects: 1) Twitch can leverage the core support network that amazon can build Starting from aws - to prime video subscriptions 2) amazon will go strong into tv top as soon as apple and google take it more serious. at that point the got one of the bigger kinds of content under control - similar w/ google and youtube

duaneb 10y ago
What makes you think appletv will ever support Amazon video? The iOS app definitely needs chrome cast support.
- dmoy 10y ago
  Given that, e.g. amazon stopped selling Chromecast, I don't have high hopes for interoperability here.
  - duaneb 10y ago
    Why do this to your customers. It means Amazon video money is wasted unless I own a fire stick--and who the hell owns a fire stick? The only reason to buy it is Amazon video!
    - dmoy 10y ago
      No, it is possible to get amazon video over chromecast. It's a bit hacky, but it works.
- m_mueller 10y ago
  Recent move towards subscriptions and Apple's sign to give up on some revenue. What is it now, 15% after the first year? Could't that be viable for something like Prime video?
- andreasklinger 10y ago
  i didnt mean that i think for now every of the big players will create their own apps/boxes - i imagine "prime TV" at some point the fragmentation will annoy customers so much that they will find ways to combine - but that's in 5-10 years
  - abraae 10y ago
    Might never happen. Chromecast is so cheap that its probably putting downwards price pressure on the devices themselves. And I don't personally have any issue flicking between all of my various "set top" boxes: chromecast, WD Live, Apple TV, old school dvd player, Tivo. After all, what issues does this fragmentation cause, apart from a bit of a mess of HDMI cables, and a shortage of HDMI ports on the TV?
    - duaneb 10y ago
      It's just a different type of DRM lockin. It's absurd the store from which we buy content can dictate how and where we consume it.

deleted 10y ago

[deleted]

ben_jones 10y ago

They bought, in one form or another, the very phenomenon of video game addiction. I'd love to see their user activity numbers because I really believe a large portion of the twitch demographic spends Facebook-esque # of hours on the site per day. And here's the thing, people love Twitch. Their seen as a champion of gamers that allowed streamers to stream, giving monetization strategies as a gift.

cpeterso 10y ago

> The active engagement of Twitch viewers can often help boost sales for games that prove popular among live streams. Can users purchase games (from Amazon) directly through Twitch? Amazon could offer streamers a referral cut, too.

throwanem 10y ago
That seems like posing a real challenge for Amazon, simply because the entire PC game market belongs within reasonable margin of error to Valve, via Steam. I don't know as much on the console side, but the impression I have is that that's moving more toward digital delivery as well, via the various console manufacturers' storefronts. Not sure how Amazon would be able to find a meaningful entry into that particular market.
- deleted 10y ago
  [deleted]
bloaf 10y ago
I feel like selling the games directly on a twitch stream page would be a little too boorish. It would make every streamer immediately look like a paid advertiser. I think a smarter strategy would be to let the streamers advertise peripheral items (wanna order the beer I'm drinking?) and to encourage the viewers to buy things for the streamers to feature in their show (especially the crafty streams.)

iotku 10y ago

>Twitch has shied away from dark patterns that lock out adblocking users. I don't see any big modals or disabled video if I run an adblocker on Twitch. This is no doubt on purpose. I vividly remember this not being the case, whereas (at least in partnered streams) if twitch detected an ad-blocker it would stop the stream and then fill your screen with recommendations to subscribe to the streamer. What ended up happening if I recall correctly was the adblockers would just block the anti-adblock screens so they were rendered ineffective. I'm pretty sure there was other efforts, but I found this on their blog [1] [1] https://blog.twitch.tv/experiment-with-advertising-on-partner-channels-6eb6ecee7ef7#.64149468d https://blog.twitch.tv/experiment-with-advertising-on-partne...

calgoo 10y ago
I watch an average of 8 hours of twitch daily while working from home. I use adblockers without issues on their site. The only thing that I had to mess with was uMatrix, but that happens everywhere, especially with so many CDNs etc loading content.

ChuckMcM 10y ago

If this thesis holds true: > The past several years has shown the social > communities grow organically. But its hard to > make users adopt one. If you build it, they probably > won't come. It's easier for a big company to buy one > up than start one from scratch. (Think Instagram > versus Google Plus). Then the best use of someone's time might be to start as many social networks as possible on the possibility that one of them develops enough community to go "big." At which point you sell it to the highest bidder. Sort of "community farming" on a meta level.

NhanH 10y ago
If all else equal, I'd imagine that's true. However, starting multiple things while keeping high product quality might not be that simple, despite popular belief that social networks are "easy".
paavokoya 10y ago
Reminds me of irl communities where artists and entrepreneurs start local, homegrown businesses (think portland hipster) and then giant corps come in, tear down the old housing, throw up 5-story Ikea condos on every block (along with the white-bread cafes and clog shops) and ride the "trendy neighborhood" wave for a decade or two until the money leaves for another cool neighborhood
forrestthewoods 10y ago
My rule of thumb is that if you can get 100M monthly users you can sell your company for $1B. It doesn't matter what your product or platform or service is. It doesn't even matter if you have any revenue. If you can get a hundred million monthly users then you can sell for 1 billion dollars. At least that's what I've observed over the past few years. Twitch was bought $1B with a mere 50M users. But highly engaged users with successful monetization. So it fits my model. WhatsApp was bought for almost $20B under the assumption they could hit 1B users. A 2x premium for being so large. So roughly $5 to $20 per user. That seems pretty reasonable.
- TeMPOraL 10y ago