- BY JEFFREY L. WILSON
- MAY 19, 2014
The ESPN of streaming video game content is a succulent morsel that YouTube wants to claim for its own. Here's why.
Unconfirmed reports surfaced this weekend that video giant YouTube is in talks to buy Twitch, the ESPN of video game content, for more than $1 billion.
That's no small sum. On the surface, YouTube's potential Twitch purchase may leave many scratching their heads, but it represents not only an expanded video footprint, but a way to tap the money-spending, 18-to 34-year-old gaming video game-playing demographic.
Twitch Defined
Twitch is the destination of choice for streaming video game content. Twitch content include trailers, personality-driven shows, Let's Plays (video walkthroughs often containing commentary), and competitive versus play in popular eSports games like StarCraft II and Ultimate Marvel vs Capcom 3. Twitch can be viewed using a Web browser, or apps on the Android, iOS, PlayStation 4, and Xbox One platforms. Twitch is everywhere and highly accessible.
Visitors can watch live video game streams from both professionals and amateurs dig into archived footage, and chat with others. Twitch draws 45 million unique visitors per month who view an astonishing 8.5 billion minutes of video per month.
Big Money Potential
YouTube executives surely salivate over those numbers as the company could extend Google's AdSense advertising platform to help companies market everything from video games to soft drinks. In fact, Twitch already has its own advertising structure in place that enables hosts to generate income by broadcasting video games or gaming-related shows. As a result, the community wouldn't find it unusual should ads appear in Twitch videos.
Currently, gamers who wish to ditch display and video ads subscribe to Twitch's $8.99 per month Turbo premium service. Should this remain in place post-purchase, YouTube would have a seconday Twitch revenue stream, especially if the company adds more features to make upgrading an even more attractive option.
Potential Blowback
However, that doesn't mean that the Twitch community should be excited about this possible aquisition. On the contrary, they should probably be leery if they were to use YouTube as an example of what may be in store for Twitch.
Many YouTubers became enraged when Google forced them to use the company's then-new social network, Google+, to leave comments. Even worse, many YouTube videos featuring video game playthroughs were flagged as copyright-violating material and blocked in late 2013. Select publishers rallied to have the videos reinstated and YouTube went on to fix its ID system that caused the content blocks. Although those auto-removals appear to be a thing of the past, gamers who invest in live streams haven't forgotten the incident.
A Power Move
Still, the purchase hasn't been confirmed by either company, so this is, admittedly, all speculation. Even if the rumored deal is met with consumer outrage, YouTube's potential play is still quite strong because there isn't a viable alternative streaming video game service...at the moment. Twitch is deeply embedded in gamer culture and it may take a ball drop of massive proportions to truly sever the ties. In terms of business, this is a smart move for YouTube.
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