Twitch Goes Mainstream - Another Nail in the Coffin for Linear TV?

Way back in 2014 I wrote a blog called – Mindless Entertainment or a Glimpse of the Future, asking if it made sense for people to watch others play video games (the answer was yes). Six years later no one under the age of 40 would ever consider asking that question. League of Legends tournaments or other eSports events are truly global mass media events and during the Covid-19 crisis have literally become the only game in town. And, because of the success of Twitch, many competitors have come along, including from such heavy weights as Microsoft and Google, but in the game streaming world Twitch reigns supreme. The last serious rival was Mixer from Microsoft and it was announced in June that Microsoft is closing it down for good.

From LOL to Live

Since that old blogpost in 2014 we have seen a gradual, slow decline of linear TV. But until now, the triple combination of the loyalty of older viewers, live (especially sports and news), and what we might call populist TV (Love Island, American Idol) has allowed linear channels to more or less maintain their appeal, even to a certain extent amongst younger viewers. Broadcast TV, while acknowledging its overall decline, has been confident that these three areas would provide them with enough of an audience to buy them time until they find a way to transform their business models. It would seem that Twitch (i.e. Amazon) has other ideas.

Twitch is now clearly positioning itself to go mainstream, offering live sports and more and more non-gaming content: 11 NFL games and 4 Premiere League games will be offered this year and Twitch won its first Emmy last year with Artificial, an interactive sci-fi series. At the same time, the live streaming of the Black Live Matters protests was, for many, the go to platform to be truly (virtually) immersed in the happenings: multiple viewpoints and perspectives, multiple opinions, all available live, unfiltered, in real time with the possibility to comment, discuss, argue with like-minded viewers or opponents.

As another fundamental milestone, in October 2019 the non-gaming “Just Chatting” category on Twitch surpassed both League of Legends and Fortnite to become the most popular on the platform.

And if we look at the live content with highest ratings on broadcast TV - sports, reality TV, song competitions, dating shows, etc. - they increasingly rely on social media. What would Love Island, Koh Lanta or American Idol be without Twitter or Facebook? Twitch is all about communities and replicates the social media experience but with the social interaction integrated with the video – no need to go outside looking for interesting feeds, they are all there! – with the added incentive that these communities can have influencers or stars of the show as participants or moderators.

Twitch is now clearly positioning itself to go mainstream, offering live sports and more and more non-gaming content.

As Twitch branches out into mainstream content, viewer data is getting more and more valuable.

Data Flows Downhill

Which brings us to possibly the most important point. Data! When Twitch was just a game streaming platform, viewer data may not have been particularly valuable. Is someone’s reaction to or views on a League of Legends character worth anything in the data marketplace? Probably not much. But as Twitch branches out into mainstream content, this changes radically. If Twitch were only an independent platform then the data being generated by user activity would be a valuable commodity; but the fact is, Twitch is owned by Amazon. All of this data is controlled by Amazon and can be combined with the data being generated by Prime and the Amazon online shopping platform. Added to that, Amazon can subsidize content for Twitch, as they already do for Prime, in dollar amounts no broadcaster (or anyone else) could possibly challenge. The nearly a billion dollars paid for Twitch in 2014 was a bargain and Amazon is taking steps to further align Twitch and Prime - the Amazon store + AWS + Amazon Prime + Twitch seems invincible!*

And a couple of other trends:

1. Broadcasters don’t have demographics on their side. The average age of a BBC One viewer is over 60 and going up every year, and similar dynamics can be seen in every country.

2. Especially outside of the USA, broadcasters are finding it harder and harder to afford premium sports content and so their live offerings are declining in attraction.

3. Increasingly viewers watch content on their mobile devices (though Covid-19 has, probably temporarily, reversed this trend), Twitch was always mobile, broadcast not so much.

4. Esports have also gone mainstream during Covid-19. Some of those new Twitch esports viewers will stay and consume other non-gaming content as well.

Linear TV was already struggling and now broadcasters are being challenged by in some of the areas of relative strength that remained to them. Linear TV providers will need to react now before this threat is too embedded, but solutions are not easy to come by. Broadcasters have been trying to slow the decline amongst younger viewers for years and this is yet another challenge that will require a level of creativity, flexibility and resources that they may lack in times of economic distress such as now.

*The Premium service for Twitch is available to Amazon Prime customers and has been recently had a name change from Twitch Prime to Prime Gaming, emphasizing how they are both part of one mega-platform. There is a possible fly in the ointment here for Amazon though, we are starting to hear voices calling for the breakup of some of the big tech companies and if, one of these days Amazon were to be broken up into pieces, it seems sensible to think Twitch would be separated from the Amazon store.

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About Paul Moore Olmstead
Director of Strategic Business Development for Global Media, Atos and member of the Scientific Community
Paul Moore Olmstead has been working in the area of innovation in the media market for over 15 years. He is based in London, UK and has dual Canadian/Spanish citizenship and degrees in Economics from the University of Toronto and Computer Business Systems at Ryerson University. Previously he spent many years on the BBC Account for Atos where he was responsible for Innovation and Sustainability and before that was the head of Media in Atos Research & Innovation. With over 25 years experience in IT, Paul has worked in wide variety of areas, including public procurement, accounting, mobility, Smart Cities, analytics and media. Paul has worked in such areas as video streaming, 3D, digital preservation, social media, video analytics and recommender systems. He has been collaborating as an external expert for the European Commission for over 10 years and has been a member of the Atos Scientific Community since 2011 where he leads research in the Media area. As well, Paul is responsible for the Media Industry in the Atos Expert Community.

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