“The Gogglebox of livestreaming,” is how Steve Ford, the vice-president of sales of Twitch, describes the Amazon-owned social video app to The Drum. It’s his shorthand for getting brands and marketers to look at his service with rose-tinted goggles.
His comparison with Channel 4’s mundane, or mundanely compelling, British reality TV ticks many boxes. The public tunes in to Gogglebox to watch the public watch TV. With Twitch it’s the same, but mostly with video games.
The Gogglebox comparison helps contextualize the power of a shared experience, says Ford. “10 years ago, the idea that one of the UK’s most watched and most loved TV programs would be people watching other people watching TV would have been a difficult pitch. Twitch takes this further by allowing viewers to connect with the streamer or other viewers sharing the broadcast in real-time. So imagine how cool it would be if Gogglebox was live and you, as a viewer, could communicate with your favorite Gogglebox star and they would speak back to you through the TV. Twitch brings this to life every second of every day.”
Twitch is certainly odd – but it has excelled where other livestreaming apps like Periscope, Meerkat and Kamcord failed. Facebook Live, Instagram Live and YouTube Live compete, but they are cluttered toolboxes when compared with Twitch’s live social video USP. Ford says Twitch’s laser-focus on community and creators, rather than on the encroachment of its competitors, has steered it well. Founded in 2011, two months after the launch of rival YouTube Gaming, Twitch now has 15 million active viewers a day, who each spend an average of 95 minutes a day tapping into streams from more than 2.2 million creators. The majority of this audience is aged between 18 and 34 and is 81.5% male, although female users have grown by 10% this year. While traditionally a gaming app on which viewers have watched everything from a gamer beat notoriously hard fantasy game Dark Souls using only his feet to two fish controlling a Street Fighter battle, it has spilled over into new niches like anime, sci-fi and traditional sport.
To this end, Twitch also screens old TV shows like Doctor Who, Bob Ross and The Power Rangers for an audience to discover, or rediscover. “Our approach is to look at these areas of interest, acquire content that serves this core audience and enable them to enjoy more of what they love on Twitch in a way that’s ‘Twitchy’ – so live, interactive and shared. These kinds of projects have been performing well, especially when you look at the engagement that marathons and series get.”
The company’s development has itself been a marathon, and there was one consistent challenge throughout. “Historically, the difficulty has always been the limited means of monetization available to creators. This was a key focus.”
Since Amazon purchased Twitch in 2014 for $970m, there have been notable integrations with Amazon
Prime – particularly on the e-commerce side. Subscribers receive free games and loot boxes each month to incentivize their membership, and they can subscribe to creators to help fund them. But creators can also bring on partners and affiliates, monetize through ads, game and merch sales, and by receiving Bits (like a Facebook ‘like’, but worth credit). Notably, creators can also utilize affiliate links and earn commission by sharing their specs and gear on Amazon Wish Lists. Here, content is driving commerce on the parent platform.
Its users are keen to see it monetize and bring in partners. Twitch claims 82% of its users believe sponsorships are good for the gaming industry, and 80% want to see more brands in the space. FMCG brands are increasingly coming on board. Kellogg’s and Unilever in particular have taken “a significant leap onto the platform in the last 12 months,” says Ford, as it helps them “build brand credibility among a young and savvy audience”.
At this stage, their involvement consists of pre-roll ads. “These meld a brand’s message with Twitch’s culture – popular influencers and gaming vernacular has proved a highly effective tool. They drive reach, association and awareness for these brands, which then helps them to enter the live activation space on Twitch in an authentic way.”
Twitch is also riding the wave of eSports as it grows in popularity and commercial heft. NewZoo estimates that the global eSports economy was worth $905m in 2017, with 77% of this coming from brands. It is set to reach $1.4bn by 2020, it says, pulling in an audience of 380 million people a year.
According to data from the eSports marketing intelligence company, in the first quarter of 2018 Twitch generated 2bn hours of gaming content. From this share, eSports comprised 11.6% (or 228m hours) of Twitch’s content. A big part of this is partnerships with eSports leagues like the Overwatch League, NBA 2K League, Tekken World Tour and other such events. Ford concludes: “We’ve found that the key to increasing the entertainment value of eSports is to make it a live, interactive, and shared experience.”
Liam Thompson, the gaming and influencer manager at Havas’ sports and entertainment agency Cake, agrees that Twitch and YouTube are market leaders is streaming, but says Microsoft’s Mixer and Facebook sit on the periphery. “Twitch has subscriptions and Bits (donatable e-currency) and YouTube has sponsors and donations, while Facebook has recently added donations with ‘Stars’ – which is less known – and Mixer doesn’t have these functions yet.”
It is content discovery that currently distinguishes these platforms. “It’s very easy to find content and streams on YouTube and Twitch,” says Thompson, “whereas these other platforms again aren’t as clear on how someone can be discovered”. And once you are discovered, how do you earn?
He notes that while there are more monetization options than ever before as a creator, there are also more creators to compete for audience share. “Anyone can stream, from those with a high-end gaming PC to those with a standard PlayStation console. Millions of hours of content are viewed every month, so who does a viewer choose to support?
For those with higher disposable income they can choose to support multiple streamers through subscriptions or donations, whereas others might only be able to support one. Twitch Prime makes it easy. While claiming the benefits of Amazon Prime you can subscribe to one Twitch channel every month. However, you must manually re-subscribe to them.” Thompson predicts that Twitch might soon look to push VOD and non-live content functions, and that YouTube might add widgets where viewers can directly engage with a streamer’s gameplay.
Ultimately, it is about opening up the functionality of each platform and allowing streamers and viewers to express themselves and build those all-important communities. “Nowadays people don’t want to just watch gameplay,” says Thompson. “The streamer needs to have a facecam and personality in order to engage with viewers.”
He adds: “As a gaming streamer, a lot of your success relies on the popularity of you as a person or the game you are playing. You either need to have a great personality and be fun to watch or a highly skilled player that produces top quality gameplay. The most successful streamers can do both.”
With Channel 4 airing its 12th series of Gogglebox from September, it’s clear there is longevity in the compellingly mundane. Whether or not candid live streams will prove as durable, and continue to direct eyes away from premium linear content, remains to be seen. Twitch certainly hopes so.
This piece was first published in The Drum's Future of Video edition in August.