A group of friends gather around the couch to watch the big game.  It’s the game they’ve waited all year to watch; there are plenty of snacks to last the friends for the duration of the event.  This is not the Super Bowl though, it’s not college basketball, it’s not even the world cup; this is the Defenders of The Ancient (DOTA) international competition, and they are watching it through the streaming juggernaut, Twitch.

Twitch started as a startup company called Justin.TV in early 2005, and has done nothing but expand in the past few years.  Amazon acquired Twitch for $970 million in 2014, and it’s safe to say they’ve seen return on their investment.  Per Business Insider, Twitch accounted for the largest amount of live video streaming at 43.6% in 2014, with the WWE network being closest accounting for less than half of that of 17.7%.  With this huge of a market, it raises some serious questions: where did it start? Who’s watching these streams? Why? These are questions are important to keep in mind when looking at this new trend.

The most important part of any trend is to look at where it starts, and it’s not as simple as just launching the service.  To look at streaming, you must first look at YouTube and the communities it created.  Before there was an easy way to stream, most people recorded their videos and would either record their reactions live or give post-commentary.  While this was not perfect, content creators could still interact with their viewers.  This created a sub-group called a “Let’s Play”.

The idea of a Let’s Play is that you record and upload an episode, and maybe change the way you play based on feedback from your viewers.  This gave a back and forth between the creator and their fans, but there still wasn’t immediacy.  Some people would record multiple episodes a day and break it out into three episodes, so the feedback might not make its way into the videos until days later.

The Technology Meets

Twitch didn’t start hitting big numbers until the last five years or so, but this meant new technology could be developed around it.  Late in 2013, we saw the release of the next generation of home video game consoles with the Xbox One and the Playstation 4 and with them new features; even some that can accommodate streamers.

The Playstation 4 is constantly recording your gameplay, so you can easily save videos and share them to various social media accounts.  There’s even an option built in to the system that supports streaming options.  The Xbox One shares some of these features.  While the stream quality may not be perfect in both systems, it’s a good start to help anyone who’s interested in streaming dip their toes in it.

 

 

By The Numbers

The one thing that speaks to broadcasts is the amount of views it gets, and Twitch has no problem with that.  According to TrackDOTA, there was roughly 58 million people watching worldwide, which is more than half of the peak Super-Bowl viewers, 115.5 million viewers.

This also attributes to the fact that Twitch has an extremely high attach rate with its viewers.  Per Business Insider, 58% Twitch viewers usually spend about 20 hours a week watching streams.  They also can help boost these numbers by holding and supporting charity streams.  Every year the Games Done Quick group hosts two, one-week long events a year where they invite multiple speed runners (people who specialize in beating games in record time) and stream for a week straight to raise money for charity.  They have raised hundreds of thousands of dollars for charity and continue to do so.

New Money

One of the reasons streaming has become so popular is because the lucrative nature of streaming.  Twitch incentivizes streamers by giving you an option to add a subscribe button if you get enough views regularly.  If people enjoy your content enough, they can subscribe to you on Twitch for five dollars a month.  The sub-scribe is not just a give-me-money button though.  Often streamers will offer benefits to subscribing like chat-room privileges and giveaways where only subscribers will be entered in to win free games.

For a lot of streamers, this is considered a full-time job.  World famous streamer, Felix “PewDiePie” Kjellberg, has an estimated net worth of $78 million dollars, per money nation.  While this may be an anomaly, streaming can be quite lucrative for others.  The successful streamers tend to “double-dip” with YouTube and Twitch money.  First, they usually broadcast through Twitch and YouTube gaming at the same time, doubling ad revenue.  While on Twitch, they can accept donations from viewers and have people subscribe to them for $5 a month.  Finally, they record their stream and post it to YouTube as video-on-demand, so people who missed out on the stream can watch it.

This, however, is not the case for all streamers.  For some, it is only a hobby that they do in their free time.  I talked to Scott “FalloutPlays” about his streaming.  Fallout only averages about 20-40 viewers a stream, and only streams for about 10 hours a week.  He works a full-time job and supports a gaming website between his streams.  Fallout prefers the features available on Twitch, but usually gets more views on YouTube gaming due to the popularity of his YouTube channel.

Why People Watch

As we understand the business and technology side of this trend, the last question is this, “Why are people watching other people play video games?” and there are quite a few different angles.

One of the major appeals to watching streams comes from the competitive side of gaming.  I talked to Steven Bertetto, a 22-year old who is a fan of streaming and he had this to say.  “It’s really fun to watch someone play at a high level, just like watching sports.  If you understand the nuances of the game, it becomes much more enjoyable to watch all how things play out”.  Fallout shared this sentiment, “It’s a combination of things, but at the end of the day it all boils down to entertainment… To that extent, it’s sort of like watching the NFL if you’re into football, etc etc.”

Not all the appeal comes from highly competitive games though.  Even some of the most popular streamers in the world are terrible at video games.  There is also the sense of community that comes from streaming.  Scott also believes that high competition is not the only sense of entertainment.  “The most popular streamers are usually very charismatic, outspoken and very entertaining to watch live. Combine that with the fact that they’ll frequently engage with their viewers, either in conversation, chances to play together, giveaways, and so forth, and it’s not really difficult to see why some people enjoy watching”.

This sense of community explains the high attach rate of viewers.  It draws from nostalgic memories of sitting on the couch with your friends while one person plays and everyone just chats casually.  From the streamers perspective, Fallout explained why he thinks it’s so special; “When your viewers are able to communicate with you live, you feel a meaningful kind of connection.”

As technology continues to progress, streaming will only become more accessible to those interested in streaming.  Modern day consoles have already dedicated a portion of their power to help record and stream gameplay.  With game developers now starting to steer away from the traditional games journalism, there is a lot of money to be made with advertising dollars.

There are also large communities to join and be a part of.  Not only is there TwitchCon where you can meet up with your favorite streamers, there is also conventions for single games.  There is now Guardian Con where all the major streamers who play Destiny can meet and greet with their hundreds of fans.  Becoming a streamer has never been easier or more popular, and you can partake in what can be described as a streamer’s paradise.

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Twitch: A Streamers Paradise

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