Get to Know Twitch

Twitch.tv is a service that streams video game content for either a viewer or broadcaster. Anyone from a professional gamer to you at home can set up a stream to share the game you are playing with a global audience. Lately, there has been plenty for Twitch supporters to get excited about after announcements that Twitch has become the official streaming partner for E3; and streaming capability from Playstation 4, XBox One, and mobile devices.

Massive Audience

Technology has finally allowed gamers the opportunity to watch other people play. It sounds so simple, but even a few years ago there was very little content for gamers to watch and very rarely was it live. The content Twitch has made available is being consumed in a frenzy. According to recent data from DeepField published by the Wall Street Journal, Twitch is among internet heavyweights Netflix, Google, Apple, Hulu, and Facebook when it comes to traffic.

WSJ Twitch Data

Here are some amazing figures on Twitch viewership in 2013:

  • 45 million unique monthly viewers
  • 58% of those viewers spend more than 20 hours per week on Twitch
  • 68% of Twitch users have decreased watching TV to focus on their Online gaming entertainment
  • 25% of users broadcast gameplay
  • 900,000 broadcasters per month

Disruption

The data is incredible, however the most important number is that “68% of Twitch users have decreased watching TV to focus on their Online gaming entertainment”. That is the data point that scares Hollywood and the TV networks the most. The overwhelming majority of Twitch users are young people mostly between 18-40. This is a key demo for advertisers, and also the group most likely to be cordcutters, Netflix subscribers, and overall non-traditional TV viewers.

These people are being offered a new form of entertainment that the industry juggernauts don’t have a stake in. Broadcasting players are able to make money by running ads on their stream, much like the TV networks, however those gamers are keeping all of the profit. Team Dignitas Founder Michael O’Dell was recently interviewed and shed some light into how his players can benefit from this system:

“Imaqtpie” [Michael Santana] earned about $8,000 in streaming money in a recent month.
GQ

O’Dell went on to say that his team’s star player, “Scarra” [William Li] is likely to make $200,000 this year, despite having a base salary of $50,000 from the team.

Online streaming is beneficial to both viewers and content creators. The money is only going to increase as the audience grows and more advertisers get involved.

Outlook

The Atlantic recently took a look at some demographic data for broadcast TV viewing:

In the last 20 years, the median age of Americans has increased from 34 to 37. The median age of broadcast TV viewers has increased from 41 to 54. Not a three-year jump, but a 13-year jump.
The Atlantic

The article goes on to explain that the average broadcast TV viewer is 54 or older and the most watched show on TV is NCIS with an average viewer age of 61.

The internet is killing traditional entertainment because the old ways of delivering content cannot compete against new technology. Streaming video, mobile support, and online communities are driving viewers away from their cable boxes. The Atlantic’s article concludes with this thought about broadcast TV advertisers: “advertising that’s chasing a bunch of young live-viewers on the bigger screen are running short of non-sports options”.

Those advertisers are going to flock to the opportunities of eSports and other niche communities. The 2014 League of Legends Championship Series (LCS) counts among its official sponsors: Coca Cola and American Express. Advertisers are going to follow their desired audience wherever they go and increasingly that direction is towards online streaming platforms.

Twitch.tv serves as an example for all niche markets of how to create a platform that works for your broadcasters and viewers alike.