TikTok doesn't focus on gamers, but attention is finite. TikTok surpassed Twitch a while ago in revenue and it's accelerated since then. TikTok + Youtube (very profitable) makes Twitch at best a flat third place. Not a great business to be in when ZIRP ends.
> Nine years after Amazon’s acquisition of the company, the business remains unprofitable, according to the people, who asked not to be identified discussing private information.
This ... is wild, I had no idea Twitch wasn't profitable. If you're pushing that much live video you really need to find a business model that works, especially when Youtube arguably does it better. Kind of surprised it took this long to start to wind it down.
[1] https://appfigures.com/resources/insights/20210924/amp?f=4
> Youtube (very profitable)
The "very" part is probably not true, and that's with Google's massive advertising empire behind it. There's a good reason why Google is going so hard at anti-adblocker initiatives.
You can't run a profitable video streaming service with "just throw the video on a CDN" as the strategy, you have to be the CDN because at the scale you're operating at, you'll be murdered by external CDN costs.
But you're also correct that Twitch's content makes it incredibly hard to serve cheaply. Same reason why Mixer (competitor by Microsoft) folded so quickly and Facebook Gaming and Youtube Streaming have been neglected projects since launch.
There's only two viable video streaming business models right now: your content is essentially free (TikTok/Snap/Instagram), or your bandwidth is essentially free (HBO before the divorce with AT&T, maybe Comcast-Peacock+). Netflix sorta had near free content for a while before the studios cut them off.
I think Amazon was betting that AWS efficiencies could push Twitch into profitability, guess not.
It was fun to play with it for a couple months. But there's no business here. Twitch.tv is also finding that out.
There's absolutely a business, if you have license to good content that people want to see. If you don't, then you're in a horrible commodity market -- you're reselling bandwidth.
One thing that surprised me is how they never managed to grow the VOD side. They basically handed that side, arguably a less costly and easier to monetize segment to Youtube.
For content producers, twitch often seems like a not the primary revenue stream. They put out lucrative sponsored content, or have twitch as an advertizing channel for their Youtube VOD/clips or their onlyfans. All revenue Twitch misses out on, while bearing the streaming cost.
Hack, I'd say livestreaming (Twitch, the livestream part of YouTube/TikTok etc.) is a very different business altogether compared to normal "video streaming" (serving VODs).
Also when talking about livestreaming business, one can't ignore China. They have some massive platforms (in both cashflow and audience size) despite being unknown outside China. Like Bilibili, Douyu, Huya, etc.
People choose what they want to watch on Twitch, which they have to pay as a portion of subscription costs to the channel.
For streamers with even a moderate following, they'll be in some status with Twitch to earn money off Twitch's ads. Don't recall if it's Affiliate or Partner or what, but the follower counts were surprisingly small to qualify for ad revenue.
Twitch pays out $3.50 per 1k ad views to those creators, so Twitch is paying for their content.
Tiktok has something that pays out to creators, but it's $0.20-$0.40 per 1k views and you need 10k subscribers to qualify (this seems much harder than Twitch's, which is in the hundreds iirc). It also looks like it was a one-time thing, where they set $300 million aside for that but I haven't seen any plans to continually fund it.
Twitch seems to pay normal rates for AWS. And they are around the profit-zone for several years now it seems, just not making big money. So they are in fact very profitable, just not for Twitch, but for AWS and Amazon.
I don't think any significant chunk of the Twitch infra runs on AWS.
This is in-line with Amazon's departure from "customer obsession" overall. I can't wait for bigger tournaments to move to a better platform.
They'd have done better with some sort of integrated commercials or banner bar or something else.
Or even just buffering those 3 minutes. So I do watch on twitch but I wait till the match is over.
What also sucks about twitch is you can't rewind. So many problems there
The streamer you were watching didn't bother to reduce ads to short 15 second chunks or run them manually during slow points like sitting in-queue.
And apple tv app isn't abandoned, I use it every day.
that being said, you're not compeltely off-base, some streamers are now simulcasting on youtube , presumable to mitigate some of this.
Prerolls in particular are super annoying to the point that I've moved on to twitch turbo, even though I have a subscription to the vast majority of the creators I watch regularly. Just opening a stream of some other creator to see quickly what is going on and just getting slammed with a 30s+ AD is not a good experience.
In fairness to twitch though, they do cover all the bandwidth usage from all these streamers, including the ones which don't even qualify for partnership and ad revenue. I'm just glad they offer the option to pay to get rid of these things.
>This ... is wild, I had no idea Twitch wasn't profitable
Indeed very wild. Ironic too, considering the co-founder (Michael Siebel) is a managing director of YC and has advised hundreds of startups about creating businesses.
Mark Cuban also sold broadcast .com to Yahoo for 5.7 billion
If I was a startup, I'd think hard about whether a guy who may well just have been lucky (and certainly didn't do anything significant after his first big win) rather than skillful, should be talking to me about conducting my business.
But I'm not a startup, and thank my stars for that.
Other streaming services, which can use all of the tricks to save bandwidth and compute, have eye-watering AWS costs. Even with their high take rates, I bet there's a lot of streamers that, once accounting for their share of infra costs, end up losing twitch money.
But actually doing the hard lifting of moving lot of bytes for users is the expensive thing. Ordering taxi and then updating location every few seconds is pretty light load. And there is not too many users doing it at one time.
You'd be surprised. I have no idea what Twitch does now, but when it was JTV, we had quite a bit of our streaming video on CDNs. We built a complex infrastructure to arbitrage bandwidth.
But yeah, if you do it naïvely, you'll hemorrhage money.
Amouranth used to stream exclusively on Twitch.com but now has moved mostly to Kick.com and streams the majority of her time there.
In this respect, Twitch's draconian content policing needs mentioning. People would receive week-long bans for unnamed reasons or super petty things. They rode the woke train as hard as they could and it was a sight to behold! They've recently slightly relaxed some of their disallowed content policies.
[1] Kick - Statistics & Facts https://www.statista.com/topics/11394/kick/#topicOverview
Their ad is pushing their own Stake.com gambling site and having contracts with streamers to gamble on stream
Like how Uber sold itself on "no need to tip" and there's a big fat tip screen on the App.
They saved some cost on building the UI etc. by well semi-stealing it from Twitch after a leak but that's just a saving bootstrapping cost not long term operation cost.
When it comes to general advertisement friendliness they are far worse then Twitch, i.e. where Twitch struggles to sell AD slots Kick probably wouldn't even bother.
Like many other start up like companies Kick is not currently profitable and lives from investor capital hoping to make it through.
Kick is deeply intertwined with gambling and many streamers on it frequently are in legal gray area when it comes to gambling law in the EU, they tried to somewhat get way from it but AFIK failed for now.
Kick has many streamers which are often seen as ethical problematic, like being associated with neo-Nazis, making it a no go for most advertisers. But also many streamers stay away from it for that reason and also (maybe more so) the gambling reason.
So AFIK Kick isn't likely to make it longer, except maybe as legally and ethically questionable gambling paltform.
You can't just say they are going to fail if we disclude the main reason why they are going to succeed!
There is a ton of money in gambling. That's why it's a very serious competitor.
They have a rare luxury of being able to tell advertisers to shove it, if they can make all their money doing gambling conversions.
He noted that his views were down, and he likely suspected some of his audience had moved to TikTok.
Or something along those lines :-)
Doug is a massive Car Review YouTuber - maybe the biggest?
I can’t imagine seeking out the same content I get on YouTube but on TikTok.
But then it’s not content I guess, it’s attention. Is TikTok just stealing attention and will watch anything that served to them on the platform they happen to on that day.
Makes you wonder how much power personalities actually have :-/
https://jacquesmattheij.com/story-behind-wwcom-camaradescom/
Enjoy!
Amazon has for years been saying that they think that Twitch is under monetized. In their minds, 20% of watch time could be ads, just like regular TV. Streamers don’t like ads: it kills the vibe when your audience gets a 2 minute timeout. So streamers aren’t running enough ad breaks, and try to support themselves via memberships, merch and other alternative monetization methods. And for some, Twitch is only advertising for the real money-maker on another site. So Amazon doesn’t get the ad money they think they should get, and they only get a cut of memberships.
So then it’s a question of how many servers and engineers are needed to support Twitch, because that will determine profitability.
But that's just 5% of ads.
And if you change that to 10% it is, as far as I can tell, already in a area where most would seriously consider leaving the platform for good and at 15% I think hardly any streamer would still be on twitch.
Lets be honest the only reason normal TV got away with 20% is because it had no alternatives, and often anyway just ran in the background.
But most funny because how few companies buy ADs on Twitch you might just end up seeing the same 3 ADs in a loop for 20 minuts. As far as I can tell at least outside of the US twitch is sometimes even incapable to run a 3-5min AD break properly due to the lack of bought ADs...
Also they should primarily look at other ways to monetize. Subs are still the best way, but not everyone has that kind of money.
One other big problem is that there former heads just didn’t get streamers and they ran a lot of big ones out of the building. One streamer with a crazy amount of paid members was treated poorly in an amateurish way.
I think they have new management now which at least seem to be a bit more in tune with what streamers needs are and some of the painpoints.
Streamers have to run a certain amount of ads per hour or they both lose a larger "share" of the ad revenue, and there is a preroll. Prerolls cause a huge impact in viewership so streamers don't want it.
The problem Twitch faces is that it now has multiple competitors: tiktok, youtube, and kick.
It's not just servers/engineers. Twitch has a lot of moderation issues and that requires a lot of labor. That's partly why the others are eating their lunch - little moderation.
Amazone provides something like a "live streaming infrastructure service" which they sell to Twitch and others (including the competition like Kick).
For them buying Twitch was good as it allowed them to thoroughly test that service somewhat "in-house", have an initial customer for it to show what it can do etc.
But now that this is done for Amazone there is little value in Twitch, mainly:
- can it make profit (currently no)
- does it improve our image (surprisingly yes, a bit)
- does it allow us to sell more prime memberships (in the past for a short time yes, I don't think anymore)
- does it send bad signals if we shrink/close it now which could affect Amazone stock (somewhat, but if you slowly try to fix it show that you do and then if it doesn't work sell it probably no)
(parts in brackets are speculative)
I've been in streams with less than 100 viewers and seen hundreds of dollars in bits & gifted subs being spent in a single hype train. Are those really unprofitable for Twitch?
Large streams are more expensive but those get the subs. Ad revenues they are also splitting but they play 3 minutes of ads that interrupts the entire content every 10 minutes.
Large steams do amortize cost while the bandwidth cost is somewhat scaling per viewer there are other cost which scale per used resolution and per region the stream is streamed to. So on a per-view bases large streams are often not the most expensive. But very small streams with viewers across continents have the highest per-view cost.
AD revenue is split but the main problem is Twitch ADs are not worth much and a bought way to little, often leading to no ADs playing at all for many (non US) regions.
>they play 3 minutes of ads that interrupts the entire content every 10 minutes.
They do not (typo?), it's depending on the streamers setup but ADs are normally more in the 3min per hour basis which is fine to be honest. There are sometimes some additional banner ads but they don't cover the content, don't "play" and are not that disruptive. And there is Twitch Turbo which disables all ADs but streamers still get the AD money. Through that isn't worth it's money for a lot of people.
My guess would be their ad spend is bad in comparison to the other networks (Google, Facebook, TikTok). Could be because their audience isn't worth as much, could be because the ad formats are bad, could be because they can't get advertisers. But unless they are serving ads from Google's network, my guess is they are 4th place at best.
As noted on other threads, their streaming infrastructure must be a burning dumpster fire of money. Live streaming is super hard since you can't edge cache it, and it requires actual hard computer engineering to make work. If a mere mortal company were to try to run a clone of Twitch on AWS, it would run out of money in days. It also likely uses the same hardware as other high-value products, such as AI.
If I had to guess, I'd speculate they're doing encoding on their Graviton ARM CPUs: https://community.arm.com/arm-community-blogs/b/infrastructu...
operating a reasonable reliable live streaming service is quite expensive and Twitch is not Amazone. Sure it's owned by it but it still has to buy all computation resources from Amazone, for similar prices then some of the competition like Kick (which deeply interwinded with gambling streams which are profitable but ethically and legally problematic and hence banned on Twitch)
and while they do take a cut this is only profitable if a streamer gets enough subs/bits etc.
but most streamers on twitch do not get that, but might still have people watching across two continents+. E.g. having less then 50 viewers but viewers across 2 continents with a stream earning less 1€ income (not profit) per-hour in average isn't that rare
So the "big streamers" would need to subvention the cost of Twitch being free for streamers, which isn't easy. That some people do use Twitch as a form of marketing platform to goat people on other platforms and then there earn money from then doesn't help (and given how little twitch does against that but often simply could I'm seriously wondering if there is some internal employee corruption scandal to be uncovered).
Then there is another issue Twitch has compared to YT, it ADs are worth way less. Actually often Twitch doesn't even get enough ADs bought out so that some people in some regions sometimes see no or hardly any ADs (no one bought any) or ADs repeat too often...
Lastly and maybe for some people surprisingly given how some tech channels love to blow up any small negative news about twitch it's trying to act "reasonable ethically", i.e. not "oh they are grate people ethically" but "they have limits on how evil they act which are more then the law requires" ethically. You can see this if you compare the usage of dark patterns and highly addictive feedback loops between Twitch and TickTock. The later maxes out everything they can wrt. dark patterns which have addictive effects (at least for vulnerable people) and obfuscate how much money you spend. While Twitch, well does not do so.
Oh and probably there was some mismanagement, not now but a few years ago.
Every single Twitch streamer in my list is profitable. Twitch gets 50% of each subscription. 1 subscription per streamer. You have to subscribe to each streamer individually. Egress is a fixed cost. You pay flat rate for 10GE or 40GE or 100GE. Then people buy virtual currency (bits) so they can "support" their streamers. Some people dump huge amounts of money to be displayed on top of some monthly donation list. I've seen some guy dump $5k every few minutes to some travel streamer. I guess that's what the *coin money gets spent on.
Twitch aka Amazon is surely not losing money.
Then add the annoying ads every so often. Sometimes up to 20 ads in a row. Ridiculous.
2. The core product is pretty mature.
3. Elon raised the bar for how large of a staff cut you can make.
4. Most of their revenue is split with content creators.
5. They lost their CEO about a year ago. New guy has to make his mark.
They also said they’ll be supporting AV1 and NVENC codecs soon which can help reduce bandwidth costs. They currently only support h264.
If you think about it, the less bandwidth that Twitch consumes through their CDN network, the less money a stream costs per minute. A viewer still watches ads with the same CPM, a viewer still subscribes for the same amount per month per broadcaster, a viewer optionally pays the same for ad-free viewing (Turbo), and a viewer pays the same premium for bits, regardless of what quality they're watching at. So, interestingly enough, the economics of limiting transcoding are more about limited capacity and ensuring a positive cost per streamer. If a streamer does not become an affiliate or partnered broadcaster on the platform, the only revenue Twitch gets from the streamer is the ad money from its viewers. By virtue, they want as many casters on the platform as possible to become affiliates, as being able to get commissions from bit sales and subscriptions gives Twitch more revenue streams for the same content.
So, to your point, they definitely want to be able to support more efficient codecs that are not as patent encumbered as h.265 (which IIRC did have limited support in SE Asian markets), because at the end of the day, if streamers are generating the renditions for the ABR ladder, and ultimately, folks are using lower bitrates, then overall, this cuts costs for the same operational cost.
You mean HEVC (x265)? I believe NVENC is just nvidia's hardware accelerated implementations of existing codecs.
Anyways, that sounds really interesting for both streamers who want more control over their streams' encoding, but obviously for Twitch, as it saves them compute power (though upping their intake bandwith?).
I wonder how feasible it would be for most streamers. Pushing one stream vs 3 or so is quite the difference.
Did he? Their revenue is way down, and they've had a lot of downtime. Unlike Netflix, they make most of their money on ads, not subscriptions, so more downtime is more money lost.
They're also on a huge hiring spree right now. Go look at how many roles they're hiring for. I don't think they'd be hiring that much if everything was fine and dandy.
It’s strange to see hiring as an indication that a company is doing poorly; regardless, obviously Twitter is in a position where they’ve needed to eliminate much of their headcount and replace much of the rest.
Twitter is possibly the website most well known for downtime, and has been since literally the beginning. There's no real measure for whether it's true it's down more than usual lately, and sensationalist journalism and anecdotal reports from people with an axe to grind aren't really reliable.
The closest thing I can think of is looking at Google trends, which shows that "twitter down" is pretty consistent over the years:
https://trends.google.com/trends/explore?date=all&geo=US&q=t...
There's a spike in Nov 2022 when the layoffs happened, but again that's not indicative that it's especially bad - just that people were especially whiny about it or anticipating it would be bad
Usually you dont hire if your business is not working or expected to grow
exactly. most people with good enough internet stream at 6 mbps CBR. A streamer with 1k viewers costs them several terabytes! egress for a quick 2 hour stream.
Every member of staff fired now has a beef with the company, and being a social media company those staff will probably be big social media users with quite a lot of influence. Some may set up competitors or just badmouth you and your product.
Elon discovered this the hard way.
Genuinely curious to hear why you think this is the case. It's my anecdotal experience that the average social media company employee is just an average person like you and I, with an average number of followers.
The idea that software engineers at Twitter are influential on the platform is laughable.
How many of these accounts are software engineers? https://en.wikipedia.org/wiki/List_of_most-followed_Twitter_...
Big tech companies keeping tens of thousands of engineers on staff despite their core product not seeing substantial changes for years are just wasting money.
In big tech, having services without anyone having a semblance of maintenance responsibilities tends to lead to relatively quick failures. Even in boring enterprise companies, handing out maintenance to a 3rd party is still going to cost you, and is likely going to lower quality. I've seen way too many companies that ended up rewriting things after leaving a system mostly unmaintained for 5 years made it sop being fit to purpose.
If there's a lesson of software from the last decade is that undermaintained services become zombified software, and can eat your company's brains. That's why a place like google often would rather shut something down than claim it's finished.
With software, once you find PMF, it's not the building that's hard, but keeping the users paying and using your product. The entry barrier to building a copycat is very low. So you have to pile on resources to keep your software be the best available.
This is all fine and expected, you sacrifice engineering quality for development speed in the early days. Just expect to pay it back by keeping a large engineering team for many years to come, or see your entire tech explode in flames.
Those 'years' are finite however, Twitch has been mature for like a decade already. So finally the tech debt is all paid off, and given failure to develop major successful features, time to cut the staff.
I know some of my friends watch Twitch less because the ad policy became toxic.
[1] https://twitchtracker.com/statistics
[2] https://sullygnome.com/longtermstats
[3] https://streamscharts.com/overview#:~:text=Twitch%20growth%2...
Lockdowns were in 2020, not 2021.
Yes, April 2020 gave a huge bump to Twitch and the pandemic obviously had a large impact on the following years. Twitch had really good growth.
But look at the sources I linked. Looks to me like viewership has been down every year since 2021.
*I pay for youtube premium
Besides the ad policies, the Twitch revenue split for subscriptions has been changing over time. Historically it defaulted to 50/50 and most streamers of any decent size audience would have a contract to be granted 70/30 split. However, the 70/30 split has been phased out and today nearly no streamer on the platform has it anymore. This is a huge difference for streamers. The CEO of Twitch was handing out 70/30 split "coupons" as a prize in a live event[1], it's a big deal.
Besides subscription revenue, Twitch is constantly battling to reduce other sources of income, like branded sponsorships. Last year they announced significant restrictions on streamers displaying branded content with sponsors.[2] While these rules were soon reverted, it suggests Twitch is in a fight for its life. All indications point that this is going to continue to be a problem in the future. In short, streamers need to deal with the ads because their revenue from other sources is constantly at threat.
1: https://www.dexerto.com/entertainment/twitch-ceo-surprises-s...
2: https://www.theverge.com/2023/6/7/23752437/twitch-new-ad-rul...
Is it exploitative? Empowering? Toxic? Who knows! Everyone argues about everything.
Twitch is ban happy with anything even remotely controversial. Things that can be suggestive or comments that can be interpreted as offensive will garner a ban. And they hate anything even remotely sex-related.
Honestly, this stuff needs to move P2P. Platforms are indecisive and fickle. Just a month ago, they flip-flopped on their policy in just two days [1]. And it happens time and time again.
I don't blame the ad networks (after all Twitter had all of the world government and news orgs plus sex and nudity). I blame the Twitch leadership.
If you follow Twitch, the entire leadership is embroiled in the kind of drama you'd expect in a middle or high school.
The community is moving to mostly Kick [2] and somewhat to YouTube Gaming.
[1] https://decrypt.co/209998/twitch-walks-back-changes-after-su...
On the other hand: they host everything on AWS. Which Amazon owns. So while Twitch might make a loss the parent company might be perfectly happy making up the difference in AWS profits.
Unfortunately tech is probably the ur-contrarian and ur-isolated field, and from the reactions I see to this, I worry there will never be a systemic response by employees.
I think that has always been Amazon.com since it runs on AWS.
I'm surprised they don't have a 'choose your own revshare' setting, allowing the creator choose how much to pay twitch.
Obviously twitch will recommend more profitable creators, so you get a kind of 'race to the top', with creators offering twitch a larger and larger revshare, knowing that unless they do, their audience size will dwindle.
It also encourages creators to come in from other platforms - if you already have an audience and just want to extract money from them, then you don't need to be in twitches recommendations and can choose a low revshare to milk the subscribers.
Especially when I imagine a sizable portion of revenue comes from the very biggest streamers, who may not need discovery from twitch at all and would then default to the lowest value. Like, this model has sort of flipped setup from what I'd think you want; the more successful you are the lower twitches cut.
I suppose they could just make the minimum value 50% (iiuc this is the current value). But I'm still not sure how much it would help.
A 35% cut indicates something with the business is fundamentally wrong.
EDIT: I apologize for the completely unintentional derail.
It now eliminates the ability for businesses to deduct their R&D expenditures as an expense.
Another article I ran across: https://blog.pragmaticengineer.com/section-174/
Twitch started showing a purple "disable your ad blocker" screen when a block of ads failed to run. I think they probably would have made a lot more money and reduced a lot of churn by simply advertising Turbo instead, which many users don't even know is an option.
Which is the more likely scenario?
1. OP buys bits and throws them at their favorite streamers despite not being willing to pay for subscriptions.
2. OP pays nothing for Twitch and doesn't watch a single ad.
It's absolutely true that there have been a ton of layoffs in the past ~12 months. But I've seen zero evidence of actual sales slowing down. 2023 saw a ton of big hits, from Zelda to Diablo to Baldur's Gate.
The games you mentioned are extreme outliers (no one expected BG3 to do as well as it did), and there have been a number of studio-killing bombs this year.
this kind of running-it-dry is what is killing "AAA" (big quotes) games: https://en.as.com/meristation/news/ubisoft-has-11-assassins-...
That's what is happening right now.
May well be that in 2025/2026 we see a light year of releases.
The price hike fight was the last straw. They've had a ton of time to fix these issues but haven't responded to users asks, up to the point where viable open-source alternatives are starting to take root.
For a large enough product company there's always a years-long queue of feature requests, fixes, optimizations, and other things to do. All of it will never get done! The doable amount of highest-priority items will get picked through a combination of pressures from different people and departments, and will get more or less implemented.
If you cut the workforce by 50%, instead of doing 30% of the infinitely growing backlog, you'll do 15%. Since most of the completed work gets obsoleted or thrown away due to various inefficiencies, there will be some effect, but it will be far from dramatic.
As for the individual workload, you'll carry as much as you let the company put on your back. And that mostly depends on your negotiating skill, and somewhat on the supply/demand dynamics of the current labour market. The latter will tough for the couple of years, but the former is up to you to level up.
I've never seen a layoff actually care about what team they're removing from when it comes to ENG.
In this case it's probably 500 across twitch, which for some teams is going to be devastating.
Also, I think A) is a little bit of red herring designed to create agency and opportunity where there is none. If we mean "negotiate" in an airy high-minded vague sense of "negotiate but don't", sure. At the end of the day these moves, whether intended to or not, leave less room for negotiation.
Keep in mind that execs will get bonuses for cutting costs but the real workers have additional work without a raise.
The downward spiral seems almost inevitable - attrition, drop in quality, services turn shitty, loss of revenue, repeat.
Execs are lauded for cutting costs, parasitically enrich themselves on the carcass of a once-productive business, jump ship to a new host before it all comes crashing down, repeat.
"In the final months of 2023, several top executives announced their departures, including Twitch’s chief product officer, chief customer officer and chief content officer. Twitch also lost its chief revenue officer, who worked on Twitch from within Amazon’s Ads unit."
https://americandialect.org/2023-word-of-the-year-is-enshitt...
And Twitter apparently had 20 million lines of microservices so it's not like their engineers were doing a good job, despite it being a legacy codebase, all they shipped for 10 years was 1 major redesign and Spaces + NFTs before Dorsey was fully out.
That said if they fired the report moderation team then yes it scales linearly.
I wonder if it's just me, or if this is part of the reason for the userbase's stagnation.
(Like are the layoffs usually accompanied by them reducing the streamer's revenue share, or things like that?)
It's a very good strategy as the Korean market is lucrative and the Korean companies have opportunities to spread worldwide. (they just suck at it)
Twitch got sent a foreigner-tax and didn't pay it, that's all. Korea already has a thriving version of Twitch called AfreecaTV. (edit: Oh it's not that thriving on their international site, maybe Korean site is better.)
Ultimately, the cost to operate Twitch in Korea is prohibitively expensive and we have spent significant effort working to reduce these costs so that we could find a way for the Twitch business to remain in Korea. First, we experimented with a peer-to-peer model for source quality. Then, we adjusted source quality to a maximum of 720p. While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries. Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country.
tl;dr is that SK has some big fees for data users that have a disproportionate impact on non-Korean companies
These entrenchment laws are there to favor the big ISPs in SK, it would stand to reason that they would be happy to make money in such an arrangement, and Twitch gets a secondary downstream benefits that they can reap.
I dunno why I was thinking twitch to be much bigger... when you look at unity which was 7000...
I'm not interested in it, but I'm not against it. Yet I genuinely question how it works in Twitch's favor in any material way.
Basically, I look at the softcore streams as those streamers using Twitch as a platform to provide additional content for no meaningful capital cost to the themselves (the streamers, not Twitch). It's basically a free additional discovery and advertising channel to attract new users to their core monetization platform (like OnlyFans) where they make their actual money. Twitch is basically giving them a free platform to direct most of the money to another platform, not to Twitch.
So where is Twitch making real money in that? If you're telling me through subs and bits, you're out of your mind, because that's peanuts compared to what those gals are getting from their OnlyFans, merch, other donation platforms, etc. They're snatching up nickels while the comparative money firehose is pointed elsewhere, all while diluting their brand at least a bit. Granted, I feel they need to expand their audience regardless out of the video game niche, but I question if this has been materially moving the needle.
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Don't even get me started on the other core issues. The abhorrent recommendations and difficulty of discovery, the inadequate monetization options for streamers, the limited number of advertisers and where I only get recommended product categories (like energy drinks) I have never bought in my existence, etc.
I don't really understand this logic. The fact that they make more money somewhere else means that they should have to somehow give that money to Twitch as well? If Twitch isn't set up to be able to make a profit from subs and bits, that sounds like an issue with their business model, and they should find a better way to monetize users on their site. From some very basic searching, it looks like there are NBA, MLB, and NFL players who stream on Twitch, as well as professional musicians and actors, and I imagine most of them aren't making the majority of their income on Twitch either, so should Twitch be trying to get a cut of their product endorsement deals and other sources of income that come from being famous?
I'm not saying you're necessarily wrong that that Twitch is losing money on them, but I don't really see how that's something specific to one type of streamer. If the issue is the ratio of subscribers/donations to the number of people watching those streams, why not just make policies about that specifically, like putting limits on how frequently someone can stream after a certain number of hours without having a certain amount of revenue either via subs/donations or showing ads? I think they'd make much more effective strides towards profitability focusing on stuff like that.
Donations is a great example. Look at how much large streamers get from third-party donation sites, versus what streamers get from subscriptions and bits. It is wildly unbalanced in favor of third-party sites. That's on Twitch, for failing to figure out how to better incentivize viewers to pay via Twitch, as opposed to those viewers going to a third-party platform to pay instead.
That's my real point. Twitch has monetization options, but they pale in comparison to third parties, ergo that's where a lot of a streamer's (not talking just softcore streamers, but in general) revenue comes from -- third parties, and not Twitch. Twitch desperately needs to figure out how to provide more competitive and appealing options to both viewers and its platform streamers, lest it continue to lose out on revenue by simply being a vastly inferior option to everywhere else.
What’s going on suddenly? Did the holiday earnings sucked for tech? Is it new tax laws?
My guess is that it just isn't competitive and so Twitch can't monetize.
Or maybe it is the demographic. But the ads network is my first guess.
Their advertising machine is third largest revenue generator next to sellers fees and AWS.
It's a guess as to the root cause.
I'm surprised they're not just letting natural attrition run its course.
The WARN Act calls mass layoffs at just 50 employees. https://www.dir.ca.gov/dlse/WARN-FAQs.html
I agree with the other poster, Esports isn’t a massive money maker like how the world championships for scrabble aren’t a massive money maker either.
It’s extremely niche and the audience demographics are mostly poor, it’s not a boon you think it is.
You can be smart about it like Valve and Riot or you can be stupid about it like Blizzard and Faze. Although Faze seems to be smart in how stupid the execution was.
If esports couldn’t make it during the pandemic, I doubt it would make it now when money is very expensive.
But they’re also still in the mindset that they need to prevent boobs at all costs.
Say what you want about the anything, ZIRP being on pause is about the greatest thing going right now.
Unless you’re trying to buy a home I guess.
Companies that have spent the last decade “cooperating” by flexing their monopolies and enjoying their artificially pumped up numbers, should have to deflate.
I am hopeful for at least two more rounds of cuts at all of these giants. They have done absolutely nothing customer focused in years and it is about time they feel some heat.
Between censorship, data selling and collection abuses, anti-competitive practices, stale services, outright harmful manipulation of every age group, known and exploited mental health and echo chamber issues, narrative pushing, government collaboration… yea man, watch me shed a tear for these texh companies.
Twitch and all of these other platforms have competitors eating their lunch, but they're paralyzed and unable to do anything about it because of they made a deal with the censorship devil. It's also been implemented for too long to reverse course and allow boobs, as they cannot risk upsetting their few remaining skittish advertisers.
Rather than weathering the storm with their endless supply of capital, most of the tech platforms caved to idealogical pressure and implemented algorithmic moderation systems and ideologically motivated content policies starting in 2017. The result has been alienating the undercurrent that really drives traffic to their platforms. It's ridiculous that most creators view getting banned as a rite of passage and indicator of future success on upcoming platforms like X, TikTok, and Rumble, but here we are.
I would feel bad, but these stagnant tech companies really have nobody to blame but themselves. They're ideologically captured to such a degree they don't see what's happening, and if you explain it, they'll deny it rather than entertain the idea.
Just kidding. They will probably double down on it and make it a onlyfans lite.
And if you find something you think breaks that, report it.
I am being facetious of course, but I honestly haven't heard of anyone using Twitch in quite a while. Maybe I'm just out of touch, but it doesn't seem to have much mind share anymore. Hope they all find better positions soon.