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Does Amazon's Twitch have a Twitch problem? Or a livestreaming problem?

Jul 30, 2024, 02:06 IST
Business Insider
Tyler "Ninja" Blevins, pictured here in 2018, became one of the best-known streamers as the format's popularity exploded.Robert Reiners/Getty Images
  • Amazon paid about $1 billion for Twitch in 2014, hoping it would become the next YouTube or Instagram.
  • That hasn't panned out. It loses money on very modest (by Amazon's standards) revenue.
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Amazon bought Twitch, the livestreaming platform, 10 years ago, with the hopes it would be buying the next YouTube or Instagram — an up-and-coming media app that would explode in popularity and profit when hooked to a Big Tech platform.

Instead, The Wall Street Journal reports, Twitch has fizzled: It's losing money on annual revenue of $2 billion — a nothingburger by Amazon's standards — and usage seems stalled.

This year, the company reportedly cut a third of Twitch's staff, and there's worry about its place in Amazon at a time when CEO Andy Jassy is looking to tighten the company's focus.

The Journal digs into complaints from current and former Twitch employees about management, including Dan Clancy, who became CEO last year. I have no idea how to judge those critiques — and Amazon told the Journal it's committed to Twitch over the long term.

But I also wonder how much of Twitch's problems are Twitch problems, and how much of it is a category problem: Are there that many people who want to watch someone play video games — the primary use case for Twitch livestreams — or anything else, live?

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I've spent time in the past interviewing streamers, trying to understand what they do and why people watch them because I don't get it. But I worry that when I talk to those folks, I end up coming off like Steve Buscemi — or worse.

So I asked a livestreaming veteran who lives in that world to try to decode the WSJ piece for me; they asked to keep their name out of this because they don't want to upset their employer.

Here's their TLDR:

  • Yes, livestreaming skyrocketed during the pandemic, just like lots of other digital activities, and of course, it has slowed down since. But, just like e-commerce: If you look at usage over time and pull out the pandemic years, it looks like a fairly steady march forward.
  • What has happened is that livestreaming no longer belongs to Twitch. Streamers now hop around to lots of places — namely TikTok and YouTube — and some of those competitors offer them more or better ways to make money. YouTube, for instance, makes it easy to cut up live streams into short clips that are more monetizable. And creators of all sorts have learned that you can't depend on any one platform to make a living — you need lots of them, in part for reach, and in part so if things go badly for you on one of them, you have backups.
  • But Twitch, my industry explainer tells me, still ought to be doing much better than it has — for years, it had livestreaming to itself, and it ought to be the clear leader today. "They had a moment during the pandemic, and they failed to capitalize on it," my guide tells me. "They have good streaming tech. What they don't have is a place in the culture beyond being YouTube's little brother."
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