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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Executive Summary - What does the future hold?

Striving Exponential Growth Within Twitch's Own Niche Market

Company Twitch Analysis for Entertainment and Media Industries

Presentation delivered on May 4, 2016

Presenters: Andre Koo, Rafiki Johnson, Olivia Mignone, Jung Chen, Samantha Weintraub

Purpose/ Overview:

Twitch, acquired by Amazon in 2014, is one of the most steadfast streaming services that are to be forecasted with potential growth compared to its competitors. Twitch provides a niche experience that no other rivals can reimagine. Twitch triumphs as the biggest online platform for live streaming and gaming - changing the video game industry by bringing the gaming community together as well as creating new technology and creative content. Twitch will continue to stride from its easy marketing potential for game developers. By offering popular streamers early access to upcoming games and having those streamers play such games for their viewers, the developer has instantly reached millions of consumers at no cost.

Methodology:

Describe your research process.

Reference your attached list of resources.

Key Findings/Insights:

·   Twitch has +100 million users and growing –

Twitch managed to grow more than double its 45 million users in 2014 to 100 million users in 2015. With 1.5 million gamer streams, Twitch is not only a lucrative venture for its c-suite but on the other hand very profitable for its users providing low-risk cash incentive and encouraging broad usage.

·   Twitch Raised +17 million for charity –

Twitch also serves as a way for the gaming community to give back. In 2015, Twitch and its streamers raised $17.4 million and donated to over 55 different charities including Save the Children, St. Judes, the Prevent Cancer Foundation and more. Twitch is one of the only live streaming services in which broadcasters; viewers and charitable companies come together to raise money for various causes.

Source:

https://blog.twitch.tv/twitch-gives-back-2015-charity-recap-ac9b0e1a15bd#.dddzcyg6x

·   Twitch holds 43.6% market share of live streaming traffic volume –

Twitch is a community platform

Twitch has built a community among gamers that was previously not possible. With over 100 million unique viewers and over 1.5 million unique streamers monthly (Investopedia), Twitch is a way for gamers to connect over shared interests, chat and form friendships. The majority of streamers use webcams and/or microphones to interact with their viewers while playing games. Additionally, Twitch provides a chat room for each streamer, allowing the viewers to talk back and among each other. Some of the most popular streamers have over 1 million subscribers, such as streamer PhantomLOrd (Twitch). According to another “Twitch star” Sean Plott, “On the surface, Twitch may look simply like a video-streaming site. At its core, though, Twitch serves as a social network for gamers…” (BusinessInsider). Twitch even has a dedicated yearly convention – Twitch Con – where just this past October, over 20,000 fans paid to attend in order to meet their favorite streamers and play video games (TheHustle). Twitch has over 12,000 “partnered” streamers, which allows streamers to earn money off subscriptions and advertisements on top of any donations given by viewers and personal merchandise sold. Countless streamers make live-playing video games their full time job. Overall, Twitch has not only created an accessible community among gamers, but opportunities for new jobs and ways to earn a living.

Source:

http://www.investopedia.com/articles/investing/082115/how-twitchtv-works-and-its-business-model.asp

https://www.twitch.tv/phantoml0rd

http://www.businessinsider.com/sean-plott-explains-why-twitch-is-so-successful-2015-3

http://thehustle.co/get-rich-or-die-streaming-making-money-on-twitch-tv

Twitch is Innovative

Twitch takes the world of gaming to a new advance, by not only making streaming easier, but also by allowing their users to be a part of the action - inspired with programming opportunities. Inheriting the new features and products into their beloved hobbies and passion encompasses the majority of users. Twitch capitalizes on both of the aforementioned audience and user needs. On the other side, PlayStation and Xbox solely entitle the user aspect of the experience with no interactive notation. However, instead of competing within such saturated market of console games for decades, Twitch decided to integrate its technology with these consoles directly. Moreover, Twitch is creating new revolutionary ways to intertwine audience influence hand in hand to the gamer's stream, to affect point-to-point decision making. Ultimately, Twitch's end motif is to take gamers into a new dimension of biological user and viewership experience.

Twitch is a Marketing Proponent

Twitch allows new methods for game and software developers to market their products. By offering popular streamers early access to upcoming games and having those streamers play such games for their viewers, the developer has instantly reached millions of consumers at no cost. Some developers even create their own Twitch channels to stream updates, press release, content and more (Luisbaugusto). According to (Luisbaugusto), game developers can use Twitch in 3 major conducts:  “1. Brand Awareness - This is a platform for your game to grow. 2. Community - Create an interactive environment for fan of your games. 3. New-Age Game Journalism - More and more often, gamers are turning to their favorite streams as their source of news and reviews. A broadcaster could say great things about your game, leading to an increase in your fanbase and sales, but they can also say negative things. Don't let the negative things bring you down however, because all press is good press. If people are talking about your game, it is help you reach a new audience.”

Source:

http://blog.luisbaugusto.com/post/112705596398/how-game-developers-reach-new-customers-with

Conclusion:

Twitch has impacted the gaming industry on many heights – from creating new creative content and new technology, to creating a new community and even new jobs. Since the inception of Twitch, the video game content market has skyrocketed in popularity and size. As of October 2014, video games are the #1 category on YouTube and more than 55 million people watch Twitch streams every month. During peak traffic hours, Twitch makes up 1.8% of the total US internet traffic, behind only Netflix, Apple and Google, and 58% of Twitch users spend more than 20 hours a week watching streams on the website (BusinessInsider). Due to Twitch's wide success, several other companies have cropped up in attempt to capitalize on the video game and live streaming markets, including Hitbox.tv and Gaminglive.tv (PCinvasion). YouTube respectively created a dedicated platform to video games called, “YouTube Gaming” and has added the capability to live stream videos (Investopedia).

At the moment, Twitch's biggest on par competitor is YouTube since both platforms can be used to upload or broadcast content related to video games. With the addition of live feed and streaming to YouTube, both of these companies have the same target audience. For instance, PewDiePie is the most subscribed YouTube video game commentator channel with 43 million subscribers. This proves prevalence in this prominent market category in which people are absorbed. Recently, YouTube has been sterner about video game footage by taking many down due to copyright infringement (IBTimes). Therefore, many of these users have directed their content to Twitch so that their gaming footage won't be expelled. In addition, Twitch supplies the ability to run live user streams for 24 hours a day without halt. This affects YouTube's business because as more users translate to Twitch. Although this may not directly assess the market breakdown of YouTube, which consists of music and videos, gamers still make up a large percentage of YouTube's audience, which concludes the decline of revenue.  

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