Twitch for Business?
How Amazon may be selling its live-streaming service to brands.
Up until a few years ago, it’s likely you wouldn’t have known about Twitch unless you were a fan of computer games (or, more specifically, a fan of watching other people play computer games). When Amazon purchased the service in 2014 for US$970 million, it was seen by many as an investment rather than a reflection of its then-current worth. Now, after the phenomenon of (getting mercilessly humiliated by 10-year-olds in) Fortnite and a large chunk of the world’s population confined indoors thanks to Covid-19, Twitch has reached mainstream levels of recognition. Its stars now earn as much (or more) than those on YouTube or TV, and the diversity of content is almost unrecognisable, from live music and cooking shows, to Bob Ross marathons. So, what’s next?
Well, if rumours are to be believed, Amazon will be offering up the impressive live video streaming technology for brands, as part of its AWS brand.
What is Twitch?
Formerly the gaming channel of the Justin.tv streaming platform, Twitch’s popularity grew to dominate the entire service, leading to a full rebrand under the Twitch label shortly before it was acquired by Amazon in 2014 for just under US$1 billion. Twitch’s focus was content creators streaming gameplay, while also allowing them to appear alongside it, commenting and interacting with their audience through stream chat and other tools.
Due to the robustness of the streaming technology, and the ubiquity of the apps (you can watch seamlessly on most major desktop, mobile, and home entertainment platforms), the service has become increasingly popular with a variety of content creators, both amateur and professional. The ability to reach out and instantly interact with your audience has proved invaluable during the pandemic, with many “live” and broadcast opportunities otherwise restricted.
How can Twitch be useful to businesses?
The reports of the death of the trade show may be greatly exaggerated, but the reality is that we may never fully return to the old way of doing business face-to-face on a conference floor. Even before the coronavirus opened our eyes to the dangers of such gatherings, there were already signs that some brands were looking to move product launches and similar events online.
By combining smooth video streaming and easy audience interaction, it’s not hard to see why Amazon feels it has a compelling package to offer to brands looking to host their events or Q&As. Add in the ability to customise and embed the player in a branded space, and it seems like an attractive solution to help companies strengthen the bonds between them and their customer base.
Digishare has also had the opportunity to see how this service might look. At CES in January this year, Amazon ran several “Livestreaming from the Brand” segments that they broadcast to their app and selected product pages, offering the viewer an opportunity to explore some of the stands at the show, and see product demonstrations. Although we felt it had limited utility in this format, it’s clear that there’s potential for a similar service if large trade events are limited in the future.
Why is Amazon doing this now?
As popular as Twitch is, it’s not meeting Amazon’s revenue expectations. According to The Information, Twitch was on track to reach $300 million in ad revenue for the year before Covid-19 hit, which is below the $500 – $600 million target. It’s also struggling with rival services, with both Microsoft and Google stealing share for their respective platforms, and poaching Twitch’s stars in multi-million dollar deals. Many commenters have pointed out that it’s Amazon’s inability to nurture and retain its talent that is causing problems, with the lack of investment and frustrating policy decisions driving many creators and viewers to rival services.
With some insiders claiming that Twitch isn’t even profitable at this point, it’s no surprise that Amazon may go looking for a new (and more comfortable) way of making money from the service.