Stream On! — Twitch Rises in Quarantine
I have always been an extroverted person.
In fact, my MBTI showed that I’m more than 90% “E” compared to “I”. At the same time (being the only child), finding activities while I’m alone has never been a problem for me. When I was young, the internet provided me an escape, a means of education, a place to socialize, and a platform for entertainment — I considered myself quite well-versed in any internet pop culture references. There was, however, one thing that I couldn’t really “get” until I was forced to stay inside the past couple of weeks:
This quarantine definitely increased the majority of people’s screen time as we spend more of our waking hours in front of devices. Personally, I never understood the joy of watching other people’s life when it is more exciting to experience it ourselves; but then, COVID-19 struck and now I’m starting to be able to relate with those who enjoy live streaming.
I believe that this phenomenon is not just happening to me, but to a lot of people simultaneously around the world. An article from theverge stated that the total viewership on Twitch, one of the most popular live streaming platform, increased by 10% within one week. In Italy, the viewership increased by more than 66% ever since the first week of February when the quarantine began.
My observation is simple; as the majority of people are forced to stay home, the speed of online content consumption increases while the content creators’ ability to produce materials in the quality that they’re used to decreases. The result is a lack of material for people to consume, hence why binge watching stats on Netflix and other streaming services have been increasing, and one of the easiest (time-wise; once you’re used to it) way to produce content is live streaming — especially since the content creators/streamers are also forced to stay home. Additionally, live streaming provides a more genuine connection that people are seeking for in times of isolation.
The “rawness” of live streaming personally reminds me the old Youtube days when every single video are not as polished and professionally produced as they are right now.
Just like e-commerce and online grocery shopping, I believe live streaming’s growth will be exacerbated because of the current pandemic.
The Economy of Twitch
Streamers on the platform typically earn their income through three different ways. Subscribers (monthly fixed fee), donations (sort of like a tip), and sponsorship with brands. The most transparent data that we can publicly gather and quickly analyze is the number of subscribers that each streamer has. Currently, Twitch takes a 50% cut from the subscription money that the majority of these streamers receive, and there are three different sub-tiers:
- Tier 1 for $4.99
- Tier 2 for $9.99
- Tier 3 for $24.99
Data from twitchstats shows that there are currently 345 streamers that are receiving a base income of $150,000 (if we consider all subs are tier-1 and don’t include donations/sponsorship) , which is equal to the US top 1% average income at the age 25. Obviously, I’m not saying that live streaming is a replacement to your career, especially when getting your name out there as a content creator is very challenging. However, live streaming is one of the few avenues that most people can just do as a potential side hustle without taking too much time as it usually overlaps with one’s hobby.
Who’s behind the scene…?
And….. its Amazon!
One of the contributing factors into Twitch growth is without a doubt Amazon’s endeavor into the entertainment industry (Amazon owns Twitch). Every Amazon prime member is also given a Twitch prime membership for free, which can be used for a channel subscription every month at no additional cost. Obviously, this means that Amazon is ready to subsidized its creators on Twitch up to $375,000,000 if we assume that all ~150 million subscribers of Amazon Prime decides to use this benefit (highly unlikely). The number is currently closer to Twitch’s total daily active users, which is 15 million.
That’s it for this piece. Stay safe, things are looking a bit better.
Originally published at https://www.marcomanoppo.com on April 21, 2020.