• 4 min read • •
There is something magical about Twitch and its community. It is an evolution of what YouTube did for gaming and is in a large way responsible for the massive growth of gaming in our culture. At the risk of hyperbole, it changed the way the media was consumed. Instead of a monologue, our content creators engaged in a dialogue with their fans.
Communication wasn’t just one way and these channels weren’t just for viewing. You went there for community. To engage with people who had at least one of your interests in common, be it League of Legends, World of Warcraft or PUBG.
The Formation of Gaming as a Community
Influencers and their audiences learned to use YouTube for different reasons. YouTube was for VOD’s and information.
Let’s say you’re a warrior tank in World of Warcraft. To understand a boss fight, you loaded a video of a great tank who has 130 pulls against Illidan. Or if you kept getting countered as a Gangplank main in League of Legends by Jax top lane, you’d find a video that would tell you how to play or build to survive laning phase. Just put in the type of video you wanted and immediately you had 8,000 results. It was a fantastic, but solitary experience.
Twitch was different. At some point that two-way communication turned into an actual community. Thousands of communities, actually. You didn’t go to Twitch to learn about an event or match-up. You could watch Twitch channels all day long and never see the exact event you wanted. It was more about who you were able to meet up with while you were there. The ability to spend time with people who care about the same thing you care about and talk about it.
That’s not to say YouTube wasn’t relevant. Twitch was community, but YouTube was discovery.
You go for a video, fall in love with a personality and you would find yourself in their Twitch channel in no time. Usually after you had watched all of their YouTube content. Twitter was used to get the word out when you were performing a 24-hour stream or when a new game or patch dropped and you were playing it for the first time. As an influencer, you needed ALL these tools, even if you lived in one more than the others. (I’m the CEO of a company that does another part of this ecosystem, but that’s a story for another post).
The problem is we have content coming from fragmented places, and we need different rules and tools to help the space achieve its final form. Google took the television advertising model and unceremoniously plopped it on the YouTube platform. It worked a little and a new industry was born.
But User Generated Content (UGC) doesn’t play nice with brands. We all know the struggles YouTube has with Pewdiepie and sponsors angry about his content. Twitch did better with subscriptions, which isn't subject to advertiser angst, but is revenue generated from people already in the space (audience). This is great, but what about revenue flowing into the community to really supercharge its growth?
What we need was a way to connect the big money of advertising and sponsorship to this incredible audience in a way that is scalable, stable and repeatable.
Picture a triangle that is represented at the top by the largest content creators in gaming. For people like Ninja, Shroud or, yes, even Pewdiepie, the top of the triangle is a financially lucrative place. Besides the top spots, there are very few content creators who can make a living with this kind of job.
On YouTube, if you have a video that gets a million views, you can expect anywhere from $2–2.5k in advertising revenue. Most videos don’t get anywhere near that size audience, so they make a few pennies or dollars at most. These audiences are more loyal and a better demographic than you typically get on traditional media (can you say “in the demo”?) and that type of monetization is garbage.
There still isn’t a unified story here.
The advertisers have the budget, but they will continue to be frustrated with their results until we convince them that they must go to this audience, not the other way around. Advertisers have had decades to get used to the model of traditional media. It makes sense that they would try to make this audience work in a similar manner. But after 10 years or so, I think it’s safe to say that this model isn’t as efficient as it could be and it’s time to try new ones.
We’re working on our own approach, but would love to hear what other ideas are out there. We’re looking to bridge the gap between the advertising community and the content creators. That isn’t as simple as a business or platform. I think it needs a new model.
Both sides need a solution, and anyone who is working on that problem is our ally. It could mean several powerful things. First, we could allow content creators to flourish in a way that will explode the content we love. Secondly, this process will create opportunity for game development itself and we will have better, more engaged games. Thirdly, we can move away from ads that we all don’t like to watch anyway. Finally, we can get the revenue flowing into the space with satisfied advertisers and sponsors.
If you have passion around the space or maybe an opinion on something I got wrong or missed, leave a comment below so we can start a discussion.