The rise of Twitch: Amazon, cord-cutting, and why it’s just like Kickstarter

With north of 100 million monthly users, Twitch is one of the biggest livestreaming portals in the world, and is perhaps best known for people broadcasting themselves playing video games to the global masses.

Speaking at the Guardian Changing Media Summit in London yesterday, Twitch CEO and cofounder Emmett Shear pointed to “democratization” as a key factor in his company’s success, and even drew parallels with the success of crowdfunding platform Kickstarter, which saw half a billion dollars worth of pledges in 2014 to help bring products to market. The two firms couldn’t be much more different though, so what are the similarities?

“It’s [Twitch] the same sentiment that’s behind the rise of Kickstarter — it’s the democratization of media and it enables everyone to be a patron now,” says Shear. “You don’t just have a few rich people who are able to fund the media they want — it can be done in a distributed, democratized way.”

So, while Kickstarter lets anyone bypass banks and venture capitalists to garner funds to build innovative products, Twitch follows a similar ethos and lets anyone sidestep networks to become a sort of mini media-company in their own right, garnering millions of followers,

The rise of Twitch has been impressive since it was spun out of livestreaming company Justin.tv back back in 2011 — Justin.tv was actually shut down last August ahead of Amazon’s billion-dollar Twitch acquisition later that month.

A clue to Amazon’s interest in the company, which outmaneuvered Google to make its purchase, perhaps lies in the “stickiness” of the Twitch platform — its gargantuan army of viewers consume more than 100 minutes of content on average each and every day. That’s a huge audience of ad-viewing young men right there. It’s also for this reason that Shear reckons Twitch is part of the so-called “cord-cutting” trend we’ve seen in recent times, and Twitch helps enable this through tight integrations with PlayStation and Xbox, and support for the likes of Chromecast and Apple TV.

“We have attracted this set of people who are cord-cutters — our viewers tell us they’ve often replaced the television with Twitch,” says Shear. “Twitch is very much like a TV experience — if you look at how people watch short-clip videos on the internet, they watch five minutes at a time, but if you look at how they watch Twitch, they sit down and have multi-hour viewing sessions. That’s much more akin to how you’d watch a linear format on TV.”

A little more than six months since the Amazon acquisition was announced, little has changed at Twitch, but a handful of interesting moves have happened. Though Twitch is tightly aligned with the huge online gaming community, the company has been making small steps down other avenues of entertainment in recent times — it is now livestreaming poker matches and it offers music-streaming to broadcasters too. So does this signal a shift in focus for Twitch? Not quite — it’s not like Twitch will eventually morph into YouTube or Vevo, but if a particular new addition complements the core raison d’être of Twitch, then it will be considered.

“Poker is really just another video game — for us, people don’t play poker with physical cards, they just play video poker,” says Shear. “Music is definitely different, and we’re being cautious in bringing cool music to our existing community — it’s music that they want, rather than trying to push something that doesn’t make sense for our community.”

Shear also explained a little of his thinking behind selling to Amazon, and why the two companies are a good match. “They’re a big game-selling company — they sell a vast quantity of games, and they care deeply about the games industry,” says Sheer. “Also, EC2 and Amazon Web Services are incredibly important to the gaming industry — over half of game developers are using EC2. ”

So Amazon brings the retail and backend technology to the gaming table, while Twitch brings the missing piece of the puzzle. Prior to buying Twitch, Amazon didn’t have a big community of gamers, and through the acquisition Twitch got direct access to technology that would’ve taken it forever to build itself.

“Sometimes with acquisitions, it’s a big company buying a small company that’s threatening their core business,” says Shear. “Those can be destructive to the small company. Twitch obviously isn’t core to Amazon’s existing business — it’s more complementary.”