Episode 3 — Twitch - Acquired  ## Metadata - Author: **Acquired** - Full Title: Episode 3 — Twitch - Category: #podcasts - URL: https://share.snipd.com/episode/7b7a4793-3857-481a-8dc8-e5892268e349 ## Highlights - The Origins of Twitch Key takeaways: • Twitch is a streaming platform for playing video games on your computer. • Twitch game play refers to any game where you have to very quickly move the mouse around the screen. • Twitch is a dedicated streaming platform for streaming yourself playing video games. Transcript: Speaker 2 And twitch, for for any one is not gamer out there, i actually was looking a little bit to day, i'm kind of where the name comes from. And and ecause it has a certain field til witn, you go to the sight, and it's purple, and it's got definitely the m kind of game revived, and it attracts a, you know, game or audience, and That sort of sort of arctype. And twitch game play is, the, is a reference to, you knowthat there are games that are much more strategy based, and there are games that are kind of turwich sot twitch. Twitch game play refers to any game where you have to very quickly move the mouse around the screen. And, you know, if it's a first person shooter or something, and you got to get one guy quickly move over, get the other guy quickly move over, and it's kind of like, it's a touch and finassan Andand moving very quickly to to do very physical actions, rather than a slowerind of strategy game. Speaker 1 And so twitch, i was a dedicated streaming platform for streaming yourself playing video games on your computer. ([Time 0:06:23](https://share.snipd.com/snip/54350cc0-78a2-4123-8a6f-9f7157001c94)) - The Twitch Monetization Model Key takeaways: • Twitch is making a lot of money from subscriptions, advertising, and tips. • Their margin is high, at 95%. Transcript: Speaker 1 But, ye, we're keeping the numbers simple here. A million subscriptions. Let's assume, on twitch at five dollars a month a and at a a 50 % revenue share to twitch. That's 30 million dollars a year a in basically 100 % margin. I mean, i guess twitch is paying credit card fees out of that, so takea six, double it, because taking half of the revenue shares, so they'repaying credit card processing fees on the Whole. So take six % out of that. Speaker 2 But so 95 % margin. Not ot margin. Thad be their take, right? Cause, like their margin, we're not figuring in, you know, a w s costs or b. Speaker 1 But this is, this s just complete. They're still monetizing in other ways, through advertising and andterbo. This is just like we'll all yearly incremental marginal. Speaker 3 Ra at's trueto. Speaker 1 No addition, no, literally, nos, except for credicar processing fees and putting a little purple button that says subscribe on their sight. And i'm sure there's some engineering cost ther tw bitla incramental margin, we tlk about s one ligto cod not to mention senergies with a w s. Ah, it's pretty incredible. It's pretty incredible. Ah, and then, and then, this might be end of being the biggest orm of a o mononization for twitch in the long term, is tips. ([Time 0:17:52](https://share.snipd.com/snip/846cfcef-2abb-4e1e-9273-4e3b673fc6f8)) - The Rise of Twitch tipping Key takeaways: • Twitch is still monetizing in other ways, through advertising and "other means". • This is just like we'll all yearly incremental marginal. • Ra thinks that the main advantage of Twitch over other streaming platforms is that it enables streamers to solicit tips from their viewers. Transcript: Speaker 1 But this is, this s just complete. They're still monetizing in other ways, through advertising and andterbo. This is just like we'll all yearly incremental marginal. Speaker 3 Ra at's trueto. Speaker 1 No addition, no, literally, nos, except for credicar processing fees and putting a little purple button that says subscribe on their sight. And i'm sure there's some engineering cost ther tw bitla incramental margin, we tlk about s one ligto cod not to mention senergies with a w s. Ah, it's pretty incredible. It's pretty incredible. Ah, and then, and then, this might be end of being the biggest orm of a o mononization for twitch in the long term, is tips. So there is this behaviour that's emerged on the twitch platform, a where a streamer, twitch doesn't enable this asall at all. Streamers are hacking this together with with third party software. Where as they're streaming and speaking to their ther fans and their viewers, as they're streaming the games they're playing, they'll solicita tip jus like you know, a street performer Would, they've got a tip jar, and they're using third party pluggins to m to do this and a, and people are paying them. ([Time 0:18:33](https://share.snipd.com/snip/825477fb-9a57-49be-bfd3-a63c94bfa622)) - What Twitch Could Acquire If It Stays on the Trajectory It's On Key takeaways: • Twitch could be acquired by Amazon. • If this happens, it could go wrong for Twitch because Amazon is a company with a lot of strengths and is also very monolithic. Transcript: Speaker 3 I think that a, it just bought elemental technologi, which is a veridio in coding verfily, focused on building at the video platform. Speaker 2 Yes, i it's a solid day. Oh, yes. Speaker 1 So here's li en again. We've been very a, no, we're looking for disagreement here. It's hard, it's really hard to disagree with if, you if twitch stays on the trajectory it's on, no doubt thitss lake, i i really think this could be an incete gram style acquisition. What would have to happen for it not? Oh, guess. So here's what i was going to go and by instogram style, i mean like when we, as we talked about on the last show, facebook bys instigram for a billion dollars. Two years later, city city group puts out equity research report on facebook, valuing its togram at 35 billion dollars within facebook. I really think the same thing could happen here. Whether it'll be two years, i don't know, but, you know, in a short period of time. Here's how it could go wrong. If we're thinking from the future, amazon a is incredibly strong at a lot of things. Amazon is also a company andcl that is very monolithic. ([Time 0:42:41](https://share.snipd.com/snip/e05b7782-3947-4acf-ac61-711a661314ac))