When it comes to online video, YouTube is still the king of content, but rival Twitch is attempting to steal the crown by offering millions to lure celebrity streamers away from the ’Tube.
Twitch has ambitious plans to scale its advertising business by broadening its streaming audience beyond gamers and offering content creators multiple ways to monetize.
Going beyond gamers
Amazon acquired Twitch back in 2014 when it was almost exclusively a platform for gamers. But, recognizing the advertising limitations of the gaming demographic, Amazon launched Twitch Creative a year later to broaden its streaming horizons.
Then, to attract new viewers with popular celebrities, Twitch began a campaign to recruit celebrities, offering minimum guarantees of “a few million dollars a year in revenue” to personalities from Will Smith to Christine, a 32-year-old amateur baker who now hosts CookingForNoobs.
An upstream battle
As of June, Twitch had just 11m viewers across all of its channels compared to YouTube’s 139m, but that hasn’t stopped Twitch’s CEO from setting a goal of $1B in ad sales.
In addition to offering generous sums of money upfront to lure creators, Twitch offers a partner program that lets creators share in ad revenue and offers up to 5% referral commission for anything sold from the stream.
Meanwhile, as YouTube invests money in new music services and studio-produced TV, many amateur creators are feeling squeezed out of the ’Tube — making Twitch’s commissions look even better.