How Did Twitch Get So Successful?

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How did one streaming community pave the way for a generation of people who broadcast themselves playing video games and bring forward those who are willing to watch?

Twitch is a streaming platform and community for video gamers where users can watch or broadcast live gameplay. Players can live stream gameplay by recording footage from their PC, Mac, or consoles (Xbox 360, PlayStation 3, or PlayStation 4). These broadcasts are usually accompanied by audio commentary and webcam footage of the player, which appears at the edge of the stream. Like with YouTube, every broadcaster gets a ‘channel’ page. On Twitch, these pages come with built-in chatrooms. Unlike YouTube, however, users have the ability to broadcast live gameplay for as long as they want—24/7, if they so wish.

As of February 2017, according to statistics published by DMR, Twitch has:

  • 100+ million monthly users
  • 7 million daily active users
  • 2+ million monthly broadcasters
  • 241 billion minutes of gaming content streamed
  • Average user watches 106 minutes of video per day.

So what is the secret?

Supply in abundance

Anything that can be bought or sold in a marketplace—online or otherwise—is at the mercy of the simple rule of supply and demand. Video games are obviously an entirely different category from the regular hodgepodge of VOD content. You wouldn’t watch somebody describing what they bought at Target for four hours. Providing a large volume of live content means having the kind of content people are willing to watch live. It helps when all that’s required for content creation is a video game, computer, and easily downloadable software.

Demand for variety

Luckily for Twitch users, there is almost an unlimited supply of video games out there to choose from. On top of that, there are also endless ways to interact with said content as a broadcaster. No one user can offer the same commentary or strategy of gameplay of another. And this is what viewers are really seeking: original content that gives them a reason to tune in, whether the player behind the stream provides funny commentary or tips on mastering a particularly difficult level of a game.

Content creators making paper

JaysonLove (ManVSGame) started streaming in 2010. In 2015, he was making a six figure income off of his Twitch streams, even as he focused more on his personal life and saw his viewership go down, averaging 3,000 to 5,000 viewers a day. This still seemed to be enough to make a very comfortable living. Twitch makes its money in a number of traditional ways: ad banners, video ads, and promotions. As it would be, promotions are almost always for certain video games.

Revenue from video ads is split with broadcasters. The interesting part is that Twitch users have the option of choosing how many video ads appear on their channel. In addition, fans can directly support streamers by subscribing or donating to them. Subscriptions are $4.99, and even if a user only gains a meager 2000 subscribers in a year, they’re still looking at close to $10,000. But, combined with general ad revenue, this method of direct monetization allows individual broadcasters to see significant profits—significant enough to not need a day job—without hundreds of thousands of followers. In comparison, YouTubers who have a million subscribers may still need to work the night shift at The Krusty Krab.

Endgame

Ultimately, Twitch’s surprising success is the result of a niche user base coming together to form a community. If you ask any Twitch user why they stream or tune in (or both), chances are they will tell you that it it’s all about the community built around their content. Community building and user engagement is Twitch’s shining glory and the bottom line for live streaming success.

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