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A Billion Dollars for Twitch? Google May Go There

TMCnet Feature

May 19, 2014

A Billion Dollars for Twitch? Google May Go There

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By Steve Anderson
Contributing TMCnet Writer

The word “twitch” in video gaming is used to describe everything from a kind of gaming with high action levels, such that the controller “twitches” through a series of rapid movements, or even what happens when gaming has gone on too long on too much caffeine. But Twitch is also one of the greatest places online for games streaming, and when gamers want to exhibit skill to a large number of players, said gamers turn often to Twitch. That may have made it a tempting target for Google (News - Alert) and YouTube, and may explain why reports of a $1 billion offer may be going out soon in Twitch's direction.


While some may question the overall value of Twitch—it is, after all, essentially just a video storage repository for game streaming, whether it be broadcast from gamers or later viewed by other gamers—the numbers behind Twitch make it a surprisingly attractive media property. Twitch's monthly audience at the end of 2012 came in around 20 million, but by the end of 2013, that number had more than doubled to 45 million. By way of comparison, for the week of May 5, 2014, the highest-rated program was CBS' “NCIS,” which brought in 15.8 million viewers that week.

But it only gets more interesting as the numbers play out. Back in February, Internet infrastructure firm Deep Field declared that Twitch represented the fourth largest source of network traffic in primetime hours, and Twitch's viewers watch an average 106 minutes a day, as around 900,000 broadcasters release six million videos to the site monthly. The League of Legends Season 3 World Championship on Twitch, meanwhile, brought in 32 million viewers in one day by itself, with a peak total of 8.5 million.

At this point, some might wonder why YouTube—and by extension Google—would be interested in such an operation to the point where a nine-figure offer would be a good idea. The answer is actually quite simple: Twitch is a fairly major YouTube (News - Alert) competitor, and one that would make an excellent complement to YouTube itself. YouTube has a wealth of game-related content, from “Let's Play” videos to assorted commentary to original content based on gaming. For instance, YouTube's current most popular channel is that owned by PewDiePie, which boasts fully 26.4 million subscribers and almost 300 million views just in the month of April alone. PewDiePie routinely tackles video game content, recently running sessions of “Outlast” and “The Walking Dead: Season Two.”

For YouTube to get hands on Twitch would pretty much make YouTube the biggest source out there right now for video game-related video content. That means a huge number of users getting in on the action, and a massive number of very engaged users for advertisers to target. In an era where advertising is increasingly easy to avoid with ad blockers, time skipping, and other such technologies, getting advertising to potentially interested viewers has never been so difficult. But that in turn means that engaged viewers are especially valuable, and with video game content, engaged viewers aren't quite so hard to come by. That billion dollars today could generate several times that over the life of the investment, and video games—and video game-related content—aren't going away any time soon.

Indeed, some may balk at the idea of shelling out that kind of money for one video game channel. But Twitch's numbers are impressive by any stretch, and better to have Twitch under Google / YouTube's wing than have it competing for viewers down the road.




Edited by Maurice Nagle


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