Over the years, the world of eSports and LetsPlay videos has developed sig­nif­i­cant­ly, with viewer numbers now in the millions. Gamers from all around the world get a kick out of watching each other play. Now with Twitch, the community also has a live streaming platform; a kind of gaming con­fer­ence for the community. So how does the platform work? What kinds of games do users play? And is it possible to make money using this platform?

The evolution of Twitch

The story of Twitch begins in 2007 with a developer called Justin Kan. Freshly graduated from Yale Uni­ver­si­ty, he decided to live-stream his life, 24 hours a day. With a webcam affixed to his cap and a laptop in his backpack, he allowed people to view his life day and night. With that, Justin.tv was launched. While this channel was the first of its kind, Kan’s unusual idea quickly drew in media attention, and numerous internet users followed suite by broad­cast­ing their own lives online. Kan ul­ti­mate­ly ended up adding more channels to the network.

Just one year later, the newly founded business boasted a community of 30,000 broad­cast­ers. At this time, live streaming tech­nol­o­gy was de­vel­op­ing at a similarly fast pace to span across new genres, including sports, music, news, and finally, gaming. In the latter, users would film them­selves playing PC and console games. This genre gained so much pop­u­lar­i­ty, it spawned its own streaming platforms, resulting in the launch of Twitch.tv in 2011. 

Since then, Justin.tv has closed its gates in order to focus on its much more suc­cess­ful daughter project. 2014 saw Amazon purchase Twitch In­ter­ac­tive Inc. for $970 million.

The streaming platform’s outreach is con­stant­ly expanding and as of 2016, has achieved record-breaking figures:

  • 292 billion minutes of video content have been watched in total
  • 2.2 million active broad­cast­ers
  • 14.2 billion messages have been sent via Twitch’s chat function.

What is Twitch?

Twitch is primarily a platform that allows its users to par­tic­i­pate in a shared gaming session. The video streaming site is enhanced by diverse features; these have helped to transform the streaming platform into an active community of users. But how can you use Twitch and what tech­nol­o­gy lies behind the broad­casts?

Functions

Twitch centers on broad­cast­ing video games in real time via screen­cast. Among these games, some of the most popular sessions are eSports. Here, headsets play an important role in addition to the video stream. Par­tic­u­lar­ly on Twitch, this factor is of central im­por­tance; the platform is not just about the match itself, but the per­son­al­i­ty of the gamers. Many users therefore use a camera aimed towards them. This is known as the face cam. As with YouTube’s LetsPlay videos, the streamer’s reactions are a sig­nif­i­cant area of fas­ci­na­tion for the audience.

In Twitch live streams, a small video recording the player is displayed in the corner of the current video. In order to make this pre­sen­ta­tion par­tic­u­lar­ly appealing, many players sit in front of a green screen with the visuals of their game playing in the back­ground. Players can use the self-pre­sen­ta­tion aspect of live streaming to entertain their audience and build a fan base. A profile un­der­neath the video informs viewers about the game. Channels often use this area to note the hardware used or give details of the player’s other social media channels. There is also a chat function next to the video, which viewers can use to comment on the video.

Games

Mul­ti­play­er games are by far the most popular on Twitch. Just like with sporting events, the com­pet­i­tive element of mul­ti­play­er games has the in­tox­i­cat­ing quality of creating ex­cite­ment and frus­tra­tion among players and followers alike. First-person shooter games, including classics like Counter Strike were the first runners-up in 2016, and they are still a firm favorite within the gaming scene after more than 15 years and numerous new de­vel­op­ments. Strategy and role-playing games such as League of Legends, World of Warcraft, and Dota 2 also attract a large audience. Other popular famous games include the online col­lectible card game Hearth­stone, the open world hit Grand Theft Auto V and, of course, the iconic Minecraft. Many lesser-known, whimsical games also pull in im­pres­sive viewing figures. These include games like onu! (a music game) and Farming Simulator. Arcade classics like Tetris also enjoy a large number of spec­ta­tors.

Ad­di­tion­al channels

Beyond gaming channels, Twitch now offers a range of other channels, split into the following cat­e­gories:

  • IRL: on the IRL (in real life) channel, viewers accompany the broad­cast­ers through their daily lives, as with the platform’s former in­car­na­tion as Justin.tv. The primary function of the IRL channel is to broadcast vlogs, which are a kind of video diary.

  • Talk shows: on this channel, broad­cast­ers discuss specific topics. This category is a place for every­thing from political debates to hijinks and horseplay.

  • Creative: Twitch shows support for its users’ creative pursuits with its ‘Creative’ channel. This category is mostly made up of videos of broad­cast­ers drawing, painting, and sculpting, but there are also cooking shows here too.

  • Music: the Music category is a platform for self-starting musicians to post record­ings of their work. This section is mostly used by DJs to present their sets but it is also used by singer-song­writ­ers in order to share their music with the community.

eSport events

Twitch retains the majority of its community through the eSports scene. Com­pe­ti­tion among players is therefore of great im­por­tance on this platform. The channel has many accounts that regularly broadcast live events, some even ex­clu­sive­ly. Unlike with private streams, live events oc­ca­sion­al­ly use multiple cameras, capturing the image from many different per­spec­tives. In­de­pen­dent com­men­ta­tors and in­ter­views transform the stream into an event, similar to sports shows on TV.

Fact

At eSport events, gamers sometimes play for millions of dollars in prize money.

What tech­nol­o­gy is used?

Many Twitch users transmit the contents of their screen with Xsplit or the open source software Open Broad­cast­er Software. The latter supports macOS and Linux in addition to Windows systems. Both programs are linked to Twitch and it’s therefore very easy to embed them. Most current games consoles (PS4 and Xbox One) already have the transfer function in­te­grat­ed in the system. In addition to this software, Twitch streamers also need good hardware for suc­cess­ful broad­casts:

  • PC, Mac, or games console: for the audience to be able to enjoy the stream, the computer in use should have suf­fi­cient pro­cess­ing power and a good graphics card. For a suc­cess­ful stream, it’s crucial to have at­trac­tive graphics; if the image jerks too much, viewers will lose patience and exit the stream. It’s also important to keep in mind that CPU power is needed to stream from a PC. With a video game console, however, this is no longer necessary; its hardware and software are co­or­di­nat­ed with each other.

  • Internet con­nec­tion: a fast con­nec­tion is required in order to present videos in a high quality and without time lags. For a full HD stream, an upload speed of 6 Mbit/s must be available. Prac­ti­cal­ly speaking, the video can be com­pressed using many streaming programs, which saves resources when uploading. Online gamers should also remember that the game itself puts a great strain onto the internet con­nec­tion.

  • Video camera: the face cam shows the player in action, capturing their facial ex­pres­sions and gestures. This is a massive part of the at­trac­tion for Twitch users. The tech­nol­o­gy used for this is therefore of great im­por­tance: if the screen transfer is of a very high quality, it’s important to invest in a high quality camera in order to provide a coherent overall picture.

  • Green screen: some broad­cast­ers opt to use a green screen. Using the broad­cast­ing software’s chroma key function, users can calibrate the back­ground to reflect the game, so that the gamer can embed them­selves neatly into the video. This only takes up an extremely small area of the screen (as most gamers are seated during the broadcast), so in principle, users just need a small green sheet as a back­ground in order to do this. It’s also possible to invest in a solution made par­tic­u­lar­ly with gamers in mind; for a modest fee, gamers can purchase a special backdrop that can be folded up and stowed away after their broadcast. Nev­er­the­less, some streamers prefer to film them­selves against the backdrop of their own room. If you decide to do this, ensure that your living space is tidy and not too dis­tract­ing.

  • Mi­cro­phone: in­ter­ac­tion between gamers and their viewers is enor­mous­ly important. Gamers should therefore use an effective mi­cro­phone for their trans­mis­sions, so that their com­men­tary doesn’t go unheard by the viewers. Many gamers choose headsets, as they were made specif­i­cal­ly for this purpose, but it’s also common to see streamers that use pro­fes­sion­al mi­cro­phones. When recording your voice, make sure that the sound of the game does not override your voice, and ensure your settings are cal­i­brat­ed to a suitable level. While the correct setting will ensure that the levels of your audio are correct, gamers must take care not to shout too loudly with ex­cite­ment while playing, as this can cause annoyance to the audience or lead to dis­tor­tions.

  • Capturing hardware: to create pro­fes­sion­al-looking streams, users can invest in special capturing hardware. With these in­ter­faces, the video signal from the PC and video camera is trans­mit­ted to another computer. The second PC or laptop then processes the video and transfers it to the network. This gives you the best CPU per­for­mance possible, with no delays in either the game or the stream. 

Ex­pen­di­tures

Twitch is es­sen­tial­ly a free service. Viewers don’t even have to register, and broad­cast­ers need only pay for their personal equipment. Since the ac­qui­si­tion by Amazon, users have been able to register with Twitch Prime, a special variant of Amazon Prime. In addition to Amazon’s regular services, such as Prime Video, Prime Music and Premium delivery, there are extras made es­pe­cial­ly for the streaming platform: sub­scribers can enjoy ad-free streams and ex­ten­sions (skins, char­ac­ters, in-game credits, etc.) as well as bonus functions for Twitch’s chat function.

What is Twitch’s de­mo­graph­ic?

The streaming platform’s target audience is mostly made up of gamers. People between 16 and 24 years of age make up the lion’s share of this group; 37% of users are under 25 years old. In general, the interest in streaming and video games decreases as age increases. According to one Twitch report, the majority of consumers are male. However, if you take a look at the broad­cast­ers, you‘ll soon notice that, despite being under-rep­re­sent­ed among gamers, female broad­cast­ers attract huge fol­low­ings. The gradual move away from tra­di­tion­al TV to streaming services such as Twitch, YouTube, and Netflix is often described as cord-cutting. Young people are leading the trend in using streaming services as opposed to TV. Twitch is becoming in­creas­ing­ly at­trac­tive to marketers who want to reach out to this target audience. In addition to banners and ads, popular streamers can aid marketers by becoming in­flu­encers and promoting products. The in­ter­ac­tive element of Twitch also provides in­ter­est­ing marketing op­por­tu­ni­ties. For example, cosmetics brand Old Spice used this aspect of the platform to create an in­ter­ac­tive live action game. Users guide a man with a webcam through a forest via the chat function and determine the route he takes and the tasks he has to complete. This concept high­light­ed the notes in their fra­grances.

How can I earn money with Twitch?

With Twitch, it’s possible for active streamers to monetize their live streams. Most earning op­por­tu­ni­ties involve some kind of part­ner­ship. Broad­cast­ers have to comply with certain guide­lines in order to ensure the providers check each advert in­di­vid­u­al­ly, rather than tick off a catalog of features after an ad:

  • Content: For its partner program, Twitch selects users who make a valuable con­tri­bu­tion to the community. Twitch decides judges each ap­pli­ca­tion in­di­vid­u­al­ly in order to decide which content is valuable. Of course, the user may not violate the terms of use of the platform or the copyright.

  • Community: Potential partners should have a large fan base, but Twitch does not publicly disclose any specific numbers. However, the number of followers is not the only factor con­sid­ered in the selection of broad­cast­ers. Prolific in­flu­encers on YouTube and other social media platforms also have a good chance of being ap­proached by Twitch for part­ner­ships.

  • Regular activity: Only streamers who are regularly active on the platform are eligible for the partner program. According to the official Twitch guide­lines, users must sign on at least three times a week to be con­sid­ered regularly active. Only those who are willing to spend a sig­nif­i­cant chunk of their daily life with the streaming service can hope for income - just like with other jobs.

Premium sub­scrip­tions

Twitch users can buy sub­scrip­tions in order to follow partners. The revenue generated is then shared by the streamer and Twitch. Premium viewers then receive a special status, dis­tin­guished by a badge and special images that can be used in the chat. Broad­cast­ers can also remove ads on their channel for their sub­scribers. Sub­scrip­tions are generally seen as donations for broad­cast­ers, so in order to thank their sub­scribers, some channels offer closer in­ter­ac­tions with followers, such as personal con­ver­sa­tions.

Twitch ads

Like YouTube, Twitch generates a large pro­por­tion of its revenue from ad­ver­tis­ing, which involves the use of partners. The partner then profits from the adverts displayed on their channels. The partner can then decide them­selves how many adverts they want to show. While the very first ad­ver­tise­ment is oblig­a­tory, the streamer can then choose to insert a com­mer­cial break up to every 8 minutes. The revenues are not always con­sis­tent, but on average, a partner earns $2 for every 1000 viewers.

Affiliate marketing

Streamers can generate ad­di­tion­al revenue with Twitch’s affiliate program or third party offers. If a user buys an item after clicking on an affiliate link, the streamer receives a com­mis­sion. These adverts primarily focus on video games and hardware used for gaming.

Donations

All semi-pro­fes­sion­al streamers have donation buttons in­te­grat­ed in their profiles, connected to their personal accounts. Using this, fans of the streamer can make a one-off payment without having to set up a monthly sub­scrip­tion. Streamers then often thank their donors per­son­al­ly on-air. The donation itself is usually made via PayPal, which means that it’s possible to get a reaction in real time (partly automated by bots).

Further sources of income

If streamers regularly interact with their audience and maintain their channel well, they will naturally grow strong con­nec­tions with their viewers. The most suc­cess­ful channels have fan bases that behaves in many ways similar to fans of musicians or athletes. Selling mer­chan­dise can therefore be a prof­itable venture; if the streamer becomes real star, it’s also possible to be sponsored by man­u­fac­tur­ers from the gaming sector. For example, some popular gamers receive the latest hardware and are sponsored to mention it in their profiles or streams.

It’s also possible to make money as an eSports gamer, rather than simply playing for pleasure. ESport events draw in major crowds for Twitch, and com­peti­tors can win enormous sums of prize money. Par­tic­i­pat­ing in a gigantic tour­na­ment like this can serve as an ad­ver­tise­ment for the par­tic­i­pants’ own channels. Fur­ther­more, if you have es­tab­lished yourself as an expert in the field of eSports, you can also turn your knowledge into money outside of Twitch. For example, many people create exclusive online tutorials that reveal how to build skills in a par­tic­u­lar game. Viewers can access these videos for a fee.

As with other content providers, like bloggers and pod­cast­ers, many streamers publish an Amazon wishlist, which includes products that the broad­cast­er would like to buy. Users can then choose to buy their favourite broad­cast­ers one of these items as a gift, rather than simply donate money. This helps to strength­en the re­la­tion­ship between the broad­cast­er and their fans even more. In general, gamers can secure a liveli­hood from any one of these above­men­tioned sources of income. However, combining these methods can of course lead to more donations. However, earning money in this way isn’t always as easy as it seems; without regular broad­casts and con­sis­tent in­ter­ac­tions with fans, Twitch users can quickly lose interest.

Con­clu­sion: Twitch proves an in­ter­est­ing op­por­tu­ni­ty for gamers and marketers

Without any doubt, Twitch corners a very specific market; video games are a niche area of interest. But despite this, the streaming platform is in­ter­est­ing from a money-making per­spec­tive for two main reasons. Firstly, due to the link to the gaming industry; with in­ter­na­tion­al revenues of more than $90 billion, the world of gaming has been beating the film industry in terms of turnover for many years now. ESports events and industry events like the E3 in Los Angeles and the Gamescom in Cologne, Germany draw in crowds con­sist­ing of thousands of people. And while these games are pre­dom­i­nant­ly loved by younger people, many gamers carry their passion for playing into adulthood. This indicates that the gaming industry will continue to be a crucial market in the future.

The second reason is relating to the evolution of consumer media. It is not necessary for ad­ver­tis­ers to dis­trib­ute content solely on the internet if they focus on offering a variety of ads and diverse, ex­per­i­men­tal content. This increases the level of in­ter­ac­tion between the content creator and consumer. Most internet adverts are com­par­a­tive­ly cheap and have fewer print runs than radio, TV, or news­pa­pers, so it’s possible to be more ex­per­i­men­tal. Because viewers can com­mu­ni­cate their reactions to the producer in real time, there’s an extremely close con­nec­tion between the content and its re­cip­i­ents. This means that, the­o­ret­i­cal­ly, any internet user can become a blogger, podcaster, YouTuber or streamer. In this way, Twitch is therefore also con­tribut­ing to the de­moc­ra­ti­za­tion of the media and will most likely have an impact on the future of the media landscape.

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