What is Twitch?
Twitch is an online live streaming platform that enables users to view, participate in or share live video content with one another. The platform has seen significant growth in popularity in recent years, and currently dominates the streaming market, averaging over 950 thousand concurrent active viewers in early 2018.
Twitch’s success can largely be attributed to its participatory affordances. It’s chat functionality allows streamers and audiences to engage with each other in real time, creating a strong sense of community and connection (Sjöblom & Hamari, 2017). Due to its meteoric rise in popularity, Twitch has come to redefine the entertainment industry, taking elements of live sports, video games and social media and spearheading the creation of an entirely new market category (Sjöblom, Törhönen, Hamari, & Macey, 2018).
Many of these elements are immediately visible in Twitch’s layout (see Figure 1), such as the streamer’s content, the chat box, the friends and suggested channel feeds and the many buttons offering ways to engage with the content beyond simply watching it (e.g. sharing, following, subscribing and donating). The influence of Twitch has seen the likes of Facebook, Youtube and smaller competitor platforms like Ustream.tv and Dailymotion launch their own live streaming services to take advantage of this emerging market.
What Content is Available on Twitch?
While the platform is primarily intended for sharing video game-related content, Twitch’s growth has seen live streaming spread to a number of other activities, leading to the introduction of several categories including talk shows and live podcasts, cooking, arts and crafts, and music. Twitch is also diversifying its offering through partner-created content, with the introduction of 24/7 livestreams from media companies such as Red Bull TV, Machinima and IGN (Baumgartner, 2018).
Who Uses Twitch?
Twitch’s demographics are a reflection of the gaming industry as a whole. 81.5% of users are male, and more than half are aged between 18 and 34. The average user spends 95 minutes per day watching live content, and generally have favourable opinions towards advertising and sponsorships on the platform and in the wider gaming industry.
How Do You Access Twitch?
Twitch is available on a multitude of platforms, including desktop, mobile (both iPhone and Android), Xbox, Playstation, Chromecast and Amazon’s FireTV. Of these, mobile accounts for the largest proportion of viewership, at 35% (Gros, Wanner, Hackenholt, Zawadzki, & Knautz, 2017).
Twitch began life as a platform called Justin.tv, launched in 2007 by Justin Kan and Emmett Shear as a digital/social experiment whereby Kan strapped a camera to himself and streamed his life 24/7. While the Justin.tv grew in popularity as a ‘lifestreaming’ platform, it also saw considerably traffic from the gaming community. This resulted in the spawning of Twitch in 2011 as a dedicated spin-off platform catered specifically to esports and gaming.
In February 2014, Justin.tv Inc rebranded itself as Twitch Interactive, reflecting the company’s shift in focus toward the platform as a result of its success, with Twitch possessing the fourth largest percentage of peak internet traffic behind Netflix, Apple and Google. By August, the company sunsetted Justin.tv to focus resources entirely on Twitch. Later that same month, it was announced that Amazon would acquire Twitch for $970 million USD, its second biggest acquisition to date.
As of 2017, according to Twitch’s most recent annual report, the platform had more than 2 million unique monthly broadcasters , 15 million unique daily visitors and 355 billion minutes of content watched. Twitch is currently the dominant streaming platform in the market (see Figure 2), averaging 953 thousand concurrent viewers in Q1 2018, while its main competitor, YouTube Gaming Live, a considerable distance behind at 272 thousand. The platform is currently valued at $3.79 billion.
As mentioned, Twitch is a subsidiary of Amazon (see Figure 3), although the platform is operated independently of its parent under CEO and co-founder Emmet Shear. The company also owns Curse, a company that owns and operates dedicated video game communities, with a particular focus on third party and user-created add-ons for popular games. Curse was acquired in 2016 for an undisclosed amount.
In economic terms, Twitch users fall into the categories: consumers (viewers) or producers (streamers), although these are not mutually exclusive, with those fitting into both being referred to as ‘prosumers’ (Gros et al., 2017). Both are equally important in ensuring the functionality of the platform, with producers creating content for consumers, and consumers generating income for producers and the platform through subscriptions, participation and advertising. There are currently 2.2 million producers and 15 million daily active consumers.
The Twitch Ecology
The Twitch ecology is made up of a number of entities (See Figure 4). The company, streamers and viewers interact with one another on the platform itself, while external entities such as advertisers, media companies and competitors have more peripheral relationships.
Twitch users are able to view streams free of charge. Participation of any form requires users register an account, enabling them to utilise chat functionality and stream content of their own for others to view. The platform’s revenue comes primarily from advertising and subscriptions. Advertisers can purchase space on channels for particular games or streamers to expose audiences to display and video advertisements (See Figure 5). Average CPM (cost per thousand impressions) varies seasonally between $2 and $10. The platform also features prominently at gaming conferences and events, and will utilise these in partnership with advertisers for promotional purposes.
Twitch also receives revenue from user subscriptions. Users can sign up to Twitch Turbo, which offers several features including ad-free viewing of content. Users of Amazon’s video streaming service, Amazon Prime also have access to an upgraded Twitch account known as Twitch Prime, which includes game discounts and free promotional content.
Twitch users can also utilise the platform as a source of income. Twitch has partnership and associate programs that streamers can join if they meet certain content, frequency and viewership requirements. Twitch partners can then monetize their content through several means, including advertising revenue, merchandise, donations and channel subscriptions. Users can also purchase Twitch’s digital currency, known as bits. Bits are used to cheer for streamers in their chat, effectively showing audience support and contributing to their income.
While there are more than 27 thousand Twitch partners, streaming can be an extremely lucrative form of income for some. In essence these individuals become ‘microcelebrities’ who leverage and monetise their relatively small, but loyal followings (Senft, 2013). One such individual is Richard Blevins, who streams under the name ‘Ninja’ and has the largest subscriber base on the platform, earning an estimated $5 million annually.
Twitch leads the video game content market, accounting for 54% of total revenue in the 5 billion dollar (US) industry in 2017. The company’s biggest competitor is Google-owned Youtube Gaming Live and although the company occupies a significantly smaller share of the market, it does have considerably higher viewer reach – 44% of the total market audience. Microsoft’s Mixer is also a key player within the market, and although the platform only emerged in 2016, it very recently received a major update to its community features to challenge Twitch.
As relatively new platform in an emerging market, Twitch is not beholden to government regulators (such as the FCC) that oversee other mainstream forms of entertainment. In 2017, Germany’s media regulatory organisation, ZAK, pushed for greater regulation for streaming services. Thus far, Twitch remains largely self-regulated however. The company does have community guidelines and terms of service to regulate content and behaviour on the platform, primarily to prevent exposure to pornographic or explicit content, reduce harassment and curtail malicious or illegal conduct.
The success of Twitch has resulted in significant disruption to the media and entertainment landscape, leading to the creation of a category of platforms that blur the lines between social media, gaming and live performance (Burroughs & Rama, 2015). That said, the core components of the Twitch business model have all existed in some form or another prior to their implementation on the platform.
Microtransactions and token economies have been used in the gaming industry for many years now, particularly in mobile games. The producer/consumer content economy is also a familiar model, as is sponsorship and display advertising. While professional Twitch streamers are something of a novel concept, in reality they are no different to Instagram influencers, Youtubers or any other digital platform-based profession. Gamification and ‘badges’ have also been utilised in many platforms older than Twitch, and it’s well established that these elements promote greater user engagement with a platform (Hamari, 2017).
While the platform itself is novel (or was at the time of its inception), the ingredients that comprise it have existed for some time. Twitch partners are also an example of a much larger societal shift towards temporary or contract work, termed the gig economy. This is becoming increasingly prevalent not just in the entertainment industry, but in areas like transport and catering thanks to services like Uber and Menulog.
Community Value and Shared Customer Experience
According to Edge (2013), there are four primary reasons for spectators tuning in to streams: to be inspired, to learn, to be entertained, or to enjoy being part of the community. The value of this last motivation cannot be understated. A study conducted by Sjöblom and Hamari (2017) highlighted the importance of social affordances in determining the quality of customer experience for Twitch viewers. They found that not only does a strong sense of community increase stream viewers’ participation and time spent viewing, but also determines which streamers they follow and subscribe to. This finding is echoed in the work of (Gros et al., 2017), who found that socialisation was a key factor in determining the degree to which viewers spend money on the platform.
Whereas traditionally engagement with entertainment media was largely determined by the content, Twitch followers seem to value the sense of belonging over the actual footage or gameplay they are watching. This would be analogous to a sports fan barracking for a team because of how much they like its fans rather than its players. This drastically changes the relationship that both Twitch and its streamers have with viewers, as they are heavily incentivised to concentrate on creating quality communities, just as much as they are on creating quality content. This has resulted in a radical departure from traditional customer relationships in the media and entertainment industry, and will no doubt continue to disrupt the current landscape for some time.
Content Is Key
Despite this, content is still important. Research has shown that while genre is less important on Twitch than other mediums, content ‘type’ or ‘structure’ is a greater determinate of viewership (Sjöblom, Törhönen, Hamari, & Macey, 2017). That is, choosing between watching a first-person shooter or a farming simulator is a less influential decision than say, choosing to watch a first-person shooter tournament stream, or a first-person shooter tutorial. To continue the sporting analogy above, this would be akin to weighing up a decision to watch either amateur or professional rugby, regardless of the actual code.
Applications for Learning
Twitch has also shown to be a powerful educational tool thanks to two key affordances of the platform. Video-based instruction has always been popular, however the benefits of this medium, combined with Twitch’s capability for real-time demonstration and interaction between teachers and learners has enabled novice teachers to engage in large-scale, ‘vicarious experience’-based learning (Payne, Keith, Schuetzler, & Giboney, 2017).
Twitch has been particularly transformative in creating an entirely new category of digital entertainment, and producing an entire new industry to accompany it as a result. Twitch has blended elements from a number of different platforms and types of media, incorporating elements of video games, social media, live performance and sports broadcasting. The platform has also provided new avenues and opportunities for advertising, events and promotions. Perhaps most importantly, Twitch has enabled the growth of a vibrant and passionate community of diverse backgrounds, motivations and interests.
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