Twitch to Cut 500 Employees, About 35% of Staff
bloomberg.comNot mentioned in the article but definitely the elephant in the room: The rise of TikTok streaming [1]
TikTok doesn't focus on gamers, but attention is finite. TikTok surpassed Twitch a while ago in revenue and it's accelerated since then. TikTok + Youtube (very profitable) makes Twitch at best a flat third place. Not a great business to be in when ZIRP ends.
> Nine years after Amazon’s acquisition of the company, the business remains unprofitable, according to the people, who asked not to be identified discussing private information.
This ... is wild, I had no idea Twitch wasn't profitable. If you're pushing that much live video you really need to find a business model that works, especially when Youtube arguably does it better. Kind of surprised it took this long to start to wind it down.
[1] https://appfigures.com/resources/insights/20210924/amp?f=4
I've worked for a major streaming company and with several other major streaming companies (including Twitch); I'd like to think I have a pretty good understanding of streaming costs.
> Youtube (very profitable)
The "very" part is probably not true, and that's with Google's massive advertising empire behind it. There's a good reason why Google is going so hard at anti-adblocker initiatives.
You can't run a profitable video streaming service with "just throw the video on a CDN" as the strategy, you have to be the CDN because at the scale you're operating at, you'll be murdered by external CDN costs.
But you're also correct that Twitch's content makes it incredibly hard to serve cheaply. Same reason why Mixer (competitor by Microsoft) folded so quickly and Facebook Gaming and Youtube Streaming have been neglected projects since launch.
There's only two viable video streaming business models right now: your content is essentially free (TikTok/Snap/Instagram), or your bandwidth is essentially free (HBO before the divorce with AT&T, maybe Comcast-Peacock+). Netflix sorta had near free content for a while before the studios cut them off.
I think Amazon was betting that AWS efficiencies could push Twitch into profitability, guess not.
Several years ago I cobbled together all the pieces to make a live video streaming website [1] like Twitch.tv, et al. It's impossible to actually run at any kind of scale without being an ISP or Google-scale peer. Not to mention the enormous amount of DMCAs when people are trying to stream live sports, Pay-per-view, etc.
It was fun to play with it for a couple months. But there's no business here. Twitch.tv is also finding that out.
I don't know about "Google scale", but you definitely need to be able to peer to get the costs under control. That requires a certain level of investment (on the order of millions of dollars in hardware/datacenter costs), plus the human relationships to get the peering agreements done. Twitch absolutely had that in place, so it's not really fair to compare it to a hobby project and conclude the business model doesn't work.
There's absolutely a business, if you have license to good content that people want to see. If you don't, then you're in a horrible commodity market -- you're reselling bandwidth.
I feel like free peering is a thing of the past. Verizon/Comcast killed it by forcing people to pay for peering relations about a decade ago.
Free peering always was just "Hey, I have 10GB of transit to push to you, and you have about the same, let's keep the beancounters out of this."
As consumer Internet grew, that became more and more unstable, until Netflix hit and just absolutely overwhelmed it.
In my experience it's typically a good idea to keep the bean counters out of things.
Recently buying computing hardware I selected an American provider for my eu based lab. After paying the invoices the bean counters then asked if I could get the money back because they didn't want to pay VAT. I said feel free to ask for the money back yourself I'm happy with the purchase that you already approved. They refused and kept going up the chain until the director said just pay the VAT. after countless emails, meetings, and other time wasting activities, VAT ended up being 8 euros. Bean counters create drama to justify their bean counting.
I'm sure there are good reasons for them. But they are often simply in the way.
Bored engineers tend to over-engineer and build overly clever systems. I guess bean counters get bored too.
Entire industries exist to bypass the bean counters. Arguably much of SaaS just is that.
But you can make a comfortable living as a small VAR by just buying product and charging more to companies for it in the way their bean counters like to see it.
$1000 item with $8 VAT line item? Unacceptable.
$2000 same item with no VAT? Perfectly cromulent.
> Arguably much of SaaS just is that.
Yep - at a previous job I think there was some expensive tool that would never have been approved, but someone decided to buy it from AWS Marketplace instead where it was just a rounding error in the total monthly AWS spend.
Verizon/Comcast don't even exist here, and I live between India and China, almost half of humanity. Are you talking in hyper-local terms ?
Peering exist everywhere, and at scale you have to pay, yes.
How much of charging for network traffic profit? I imagine a lot.
We did this peer-to-peer but the risks for users became too great for that to be sustainable.
What sorts of risks to users were you seeing?
Stalkers figuring out where the women live and then doing housecalls, blackmail, etc. Too many assholes on this planet for a service like that to work in a way that potentially allows for people to be identified.
And it is only getting easier.
https://www.npr.org/2023/12/19/1219984002/artificial-intelli...
I’m the founder and cto of a niche streaming platform. You don’t need to be google scale. You do need a different business model.
"Niche" is very different. Lower membership and higher premiums, usually. I don't suppose you'd like to offer anything further about your niche or your membership base, would you?
It's Amazon, anything niche is just not registered...
How is Amazon not a Google-scale peer?
The bandwidth was obviously never the problem for Amazon. It was the actual content. How do you monetize Twitch streamers and, more importantly, Twitch stream viewers? They never figured that out, even at Amazon-scale.
Force people who want to sell on Amazon Marketplace to dedicate product to and pay for placement within Twitch streams. Then identify those products in the streams and spam the viewers & chat with purchase links and content streams that contain related recommended products.
Turn the whole thing into a self-referential product placement & affiliate scheme.
Depending on how in in-your-face that is, it might just kill the platform. I don't have any definitive answers but maybe if they ramped up their own game development studios, and flooded the ecosystem with them, they might see some return on investment (people paying for micro transactions basically) that seems like a semi-organic fit for the platform.
This seems like it was already part of the plan, see lost ark + new world launches and ongoing prime support.
I’m sure something like this already exists but can’t there be a distributed streaming platform that pays people fractions of a penny for hosting (all/part) of a video like bitorrent. I’m sure there’s some cryptocurrency equivalent. Or even better some combination of CDNs and distributed bitorrent like streaming. At the very least, it should atleast ease the burden of massive central hosting.
That might work for pre-recorded video, but I don't think it would be stable and reliable for live streams.
I don't understand why multicast isn't used. I imagine starlink multicast will become a thing and maybe we will all get transceivers. Everything old will becomes new again...
Multicast on the public Internet has never been much of a thing, and seems unlikely to ever be much of a thing.
(Some of us have been dreaming about it becoming reality for decades, but some of us have also given up years ago.)
The more important question is not why no multicast, but why no torrent style stream where the viewers themselves share with other viewers.
What about all the pirate websites? There's hundreds of them all around the world, some supported with ads, others with subscriptions. How do they manage the bandwidth problems?
For them, content is free.
I still don't get how so many 123movies clones can keep popping up with seemingly every TV show and movie there, with probably nearly all users using ad-blockers and very few possible advertisers in the first place. They get taken down regularly then presumably deal with the effort of moving elsewhere.
They don't seem to be p2p either, they have some server. Maybe it's stolen infra.
Most don't host the content themselves. They iframe or whatever other hosts.
A lot of the pirate streaming services I see are either using torrents on the backend or they're abusing normal video hosting services and just replacing links that get taken down so that when the sites/apps themselves die they only need a new domain/app to point at the the same files on those same services instead of moving TBs of files around
They embed other hosts, most of the websites usually use the same hosts but with different frontends slapped on top.
Sometimes bandwidth too if they have clever peer-to-peer setups.
99% of the content is free for twitch and youtube too.
You’ve never heard of partnered twitch streamers or YouTube rev share?
They might pay creators a fraction of what they make on ads or other extras (digital bullshit like emotes), but none of that is in exchange for the content. The content is still being developed, written, produced, performed, and provided to the platforms entirely for free.
Unless there's some kind option where youtube or twitch signs a contract with select creators and then hands them huge sums of cash upfront for the costs of future content production, or to license the creator's existing content to distribute via youtube/twitch then the cost of getting that content is still just as free for youtube/twitch as it is for the pirate streamers that upload bluray rips.
Ad revenue is money gained from advertisers at the expense of viewers, it's entirely separate from the cost of the content being viewed.
> Unless there's some kind option where youtube or twitch signs a contract with select creators and then hands them huge sums of cash upfront for the costs of future content production, or to license the creator's existing content to distribute via youtube/twitch
That’s exactly how it works. And the fractions (on Twitch) are between 50% to 70%.
>Unless there's some kind option where youtube or twitch signs a contract with select creators and then hands them huge sums of cash upfront for the costs of future content production
For the record this exact thing does exist for bigger streamers. See Ludwig for example, he switched to YouTube exclusively because it was a better deal than his twitch offer.
I've seen paid exclusivity deals from youtube before (https://www.gamesindustry.biz/youtube-reportedly-paid-usd160...) and while I'm surprised they paid a streamer like Ludwig to defect I'm pretty sure those kinds of deals don't exist for 99% of the content that gets uploaded to the platform.
99% of page views? Absolutely. Mr Beast absolutely has a YouTube contract and absolutely drives percentage points of traffic.
> The content is still being developed, written, produced, performed, and provided to the platforms entirely for free.
No, it is developed because the creator expects the platform to pay them for the views. Which the platforms does. Most big channels wouldn't exist without that money.
For them the viewer may actually be the product if they are distributing malware, mining coins in the background, or hijacking bandwidth. One reason to pay for a service is avoiding being a product. Rich people will pay out the nose for discretion because information about them has serious value.
a) you don't waste money on the licensing in the first place
b) you find the hosting where you can just pay for bandwidth
c) the bandwidth is actually cheap, until you hit petabytes of traffic or dozens gb/s of BW
d) you don't scale for millions, you scale for hundreds, maybe thousands
EDIT:
e) most users of such sites aren't demanding for quality nor service, therefore you can compress a lot more and if you overloaded they would come to other sites (which could be operated by the same people just serving from the other place)
> e) most users of such sites aren't demanding for quality nor service, therefore you can compress a lot more and if you overloaded they would come to other sites (which could be operated by the same people just serving from the other place)
Actually, the opposite is true.
If you live a country where piracy is persecuted and these services aren't available and you want to watch Silo, you don't have a choice — you have to pay for Apple TV. If you want to watch Stranger Things, you have to pay for Netflix.
But if those services are available to you, then you would have those shows on any of dozens of pirate services, and you can switch between them anytime. At which point they actually start to compete on other qualities, like streaming.
In fact, many of them have much better quality, at least in the areas where their audience lives.
> Actually, the opposite is true.
It's not 'opposite', it's some people care but most are don't. You can cater for those who care, but that means costs in services and people, or you can ignore all that noise and print money from Regular Joe, who bought 15-in-1 DVD mere a decade ago.
c) and d) don't make much sense
Bandwidth might be cheaper in absolute terms, but you're not paying less per user than if you scaled higher. How do you go from there to "the business model is to not scale up"
> but you're not paying less per user than if you scaled higher
Except you need more money thrown in the hardware to be able to utilize that bandwidth. It doesn't scale linearly. At some point it's easier to setup another node to handle another 10Gbit and while you now pay double the node cost , now you can actually scale horizontally, because it's easier to serve the same content to different people from many nodes than from one big fat one.
Also, you need clients who would watch your content and would give you ad views and hence money. If you pay $1000/m more for another 10Gbit for each node in the first place then it's another $1000/node you need to get each month.
Remember, this is not enterprise customers, with $/user costs, this is profiteering from a highly fluctuating and risky market of solving the service problem... without paying the IP holders anything. Though that's a B2B service problem too, but it wouldn't be solved till corporations' greed would exist.
Twitch's differentiator is its backchannel, the viewer's 'chat'. Unfortunately for Twitch this only works if the whole loop is low latency. This makes it very hatd to optimize for cost. On top of this, it also makes adds even more intrusive and disruptive for the viewer.
One thing that surprised me is how they never managed to grow the VOD side. They basically handed that side, arguably a less costly and easier to monetize segment to Youtube.
For content producers, twitch often seems like a not the primary revenue stream. They put out lucrative sponsored content, or have twitch as an advertizing channel for their Youtube VOD/clips or their onlyfans. All revenue Twitch misses out on, while bearing the streaming cost.
I don't think these two categories are differentiated by if their content is free (despite they do have a deference in this regard), it's more about how the customers pay for it.
Hack, I'd say livestreaming (Twitch, the livestream part of YouTube/TikTok etc.) is a very different business altogether compared to normal "video streaming" (serving VODs).
Also when talking about livestreaming business, one can't ignore China. They have some massive platforms (in both cashflow and audience size) despite being unknown outside China. Like Bilibili, Douyu, Huya, etc.
Why does “content is essentially free” apply to TikTok and not Twitch?
Majority of TikTok's user base watches what TikTok decides to show them, which TikTok can optimize to lower their content creator payouts (and further optimized by only showing content that have been properly primed in the CDN). TikTok's monetization is also pretty nebulous and also terrible; Youtube's "bad" monetization rate is like $4 CPM, TikTok's is allegedly $0.001.
People choose what they want to watch on Twitch, which they have to pay as a portion of subscription costs to the channel.
I feel like you’ve never actually used twitch. What you’re describing in terms of how it works and “subscription costs” is very incorrect.
No, I've just worked with Twitch and had friends in executive positions at Twitch. Many of their top streamers that pay the bills for Twitch are recruited and have employment/partnership contracts. They're very much paying for content during the time I had connections with them (pre-Amazon and a while after).
The nobodies that no one watches doesn't cost or earn Twitch very much.
Your explanation of twitch monetization (or costs?) was hard to understand:
>People choose what they want to watch on Twitch, which they have to pay as a portion of subscription costs to the channel.
Who is "they" here? Twitch paying the streamer (cost for twitch) or viewers (aka subscribers) paying the streamer (revenue for twitch)?
I don't really follow the space, so if I use the wrong amounts or titles, someone please correct me.
For streamers with even a moderate following, they'll be in some status with Twitch to earn money off Twitch's ads. Don't recall if it's Affiliate or Partner or what, but the follower counts were surprisingly small to qualify for ad revenue.
Twitch pays out $3.50 per 1k ad views to those creators, so Twitch is paying for their content.
Tiktok has something that pays out to creators, but it's $0.20-$0.40 per 1k views and you need 10k subscribers to qualify (this seems much harder than Twitch's, which is in the hundreds iirc). It also looks like it was a one-time thing, where they set $300 million aside for that but I haven't seen any plans to continually fund it.
Doesn't this imply that Twitch needs to cut payouts then?
In the long run it seems like streaming as a career that is solely funded by the platform is dead. Streamers will need alternative sources of revenue (patreon, OF, etc) to keep things going.
That's already how it is among the SC2 twitch streamer community (and no doubt true for BW and other games with small but dedicated audiences).
Mid-tier streamers get the majority of their money from direct donations (which display a notification live on stream) and twitch 'subscriptions' the viewers buy for $5, split roughly 50/50 between streamer and twitch (usually to unlock access to their VoDs or other perks). Which really isn't the same as passive ad revenue from the platform, as users aren't exactly incentivized to give this money directly to twitch.
The successful ones actively solicit or otherwise encourage subs and donations, and those who struggle with this have generally moved on from the platform or away from streaming as a career. Many of them also have patreon for extra perks, plus a youtube channel with a more curated selection of videos (which I've heard pays better for the time investment, since the content is mostly already created for twitch streaming or sometimes other sources).
At this moment I'm watching a guy whose monetization strategy is a roulette wheel program with challenges and dumb stuff for him to do that gets rolled whenever a viewer donates above a certain threshold. As I am posting a viewer literally just hit "play 100 games" (obviously very low percentage roll, first time I've seen it) and the streamer is pleading with chat for them to let him play the 100 games over the weekend instead of right now. Pretty entertaining, and a funny coincidence to illustrate my point as I'm typing this.
Another guy who is a caster (like a sports announcer for e-sports tournaments) hosts tournaments via donations, ie every donation has a portion go to the prizepool and tournament costs. He has relationships with all the top pro-gamers in the scene and gets great line-ups for relatively small offered prizepools by being a community figure and also being a great organizer and scheduler, etc to accommodate the pro players to make it effortless for them to participate.
It's been this way for many years for streamers trying to make a living with 1-2k average viewers and below, typically working 40ish hours per week if I had to guess (not counting practice and any professional obligations with e-sports, sponsors, etc).
Anyway, I love professional SC2 even though I haven't played for years, and I spend way too much time on twitch.
$3.50 per ad view is a very different number than $.20-$.40 per video view.
I wasn’t aware of the “one-time” aspect of TikTok creator monetization, but I just find it hard to believe anyone is going to make good content without being paid for it.
The issue is you are thinking too narrowly by only looking at payments per view, ad, etc. Influencers don't care so much about that so much as the value of views as a metric. They don't get paid by the platform, they get payed by their audience and especially by advertisers for product reviews, placement, etc. But just like twitter, tiktok is full of people with no serious plans to get famous who put effort into making content. Same with HN. It's fun to shout creatively into the void when you get a bit of validation back in the form of conversations, arbitrary points, views, etc.
Twitch pays out to creators 50-70% (some earn millions per year) TikTok pays essentially $0
Because the top twitch streamers earn a decent living, whereas TikTok creators are paid (basically) nothing.
TikTok creators get paid as well (it's called TikTok Rewards)
Twitch streamers get ad revenue sharing, afaik TikTok users don't?
Twitch pays streamers?
Twitch "pays" streamers with a cut of the money they made off them though. The paycheck is 1/2 a cut of money given to the streamer by a third party with no work from Twitch, and 1/2 a cut from ad revenues that were generated by the eyeballs accrued by the streamers.
> I think Amazon was betting that AWS efficiencies could push Twitch into profitability, guess not.
Twitch seems to pay normal rates for AWS. And they are around the profit-zone for several years now it seems, just not making big money. So they are in fact very profitable, just not for Twitch, but for AWS and Amazon.
> I think Amazon was betting that AWS efficiencies could push Twitch into profitability, guess not.
I don't think any significant chunk of the Twitch infra runs on AWS.
IVS doesn’t (or at least when I worked there, didn’t) use AWS network.
Streaming traffic goes (or went) through Twitch’s network - it’s cheaper traffic compared to CloudFront’s.
What about the OnlyFans model?
What, the 'get a bot to spam people every day, pretending to be you, to ask a ridiculous amount of money for short low-effort pieces of content from a random bucket until they figure it out and unsubscribe. Hope you can pull enough new suckers into this message loop to make it work out, while spending the majority of your time producing tons of new unique free content for other sites to drive people to your onlyfans" model?
I'm not surprised a bit given how hostile Twitch has become to users. Completely irrelevant ads, ads playing at worst times (who the hell thought it'd be a good idea to show an ad before the actual stream??), apps abandoned(at least apple tv app). I literally stopped watching some streamers because of Twitch itself.
This is in-line with Amazon's departure from "customer obsession" overall. I can't wait for bigger tournaments to move to a better platform.
I watch starcraft on twitch but can never watch it live. It'll get to a crucial moment and then a 3 minute commercial interrupts. Literally the game is over at that point. No point to watch.
They'd have done better with some sort of integrated commercials or banner bar or something else.
Or even just buffering those 3 minutes. So I do watch on twitch but I wait till the match is over.
What also sucks about twitch is you can't rewind. So many problems there
Twitch allows streamers quite a bit of control over when and how ads run, including manually triggering them. As long as they run a certain number of ads per hour, you don't see a preroll.
The streamer you were watching didn't bother to reduce ads to short 15 second chunks or run them manually during slow points like sitting in-queue.
If you load the VOD while they're still live, you can pause in place and rewind. YouTube does it natively in the live broadcast, but Twitch being Twitch just isn't incentivized to make it on the actual live stream, probably because money.
You can sub to the channel or get Twitch Turbo to remove ads. One sub is free if you have Amazon Prime.
If I have to pay then I might as well wait for the vod
Ads are controlled by the streamers. They can do prerolls if they desire, or you can at least control whether or not if they're running by rollings ads mid-stream.
And apple tv app isn't abandoned, I use it every day.
that being said, you're not compeltely off-base, some streamers are now simulcasting on youtube , presumable to mitigate some of this.
This is not entirely true, at least not anymore. Twitch forces ads every two hours? or so nowadays (some predefined amount of time), even if the streamer has ads disabled entirely. I believe it's either that or preroll ads? Don't quote me on this but I've seen it happen and explained like that by more than one streamer.
Prerolls in particular are super annoying to the point that I've moved on to twitch turbo, even though I have a subscription to the vast majority of the creators I watch regularly. Just opening a stream of some other creator to see quickly what is going on and just getting slammed with a 30s+ AD is not a good experience.
In fairness to twitch though, they do cover all the bandwidth usage from all these streamers, including the ones which don't even qualify for partnership and ad revenue. I'm just glad they offer the option to pay to get rid of these things.
It's not that twitch forces ads every 2 hours or at random intervals. The streamer has a control on their dashboard to trigger to trigger X seconds of ads. If you don't run the minimum amount of ads in a 2 hour window, Twitch WILL take over control of the ads. But if you stay on top of things you can entirely control when ads occur so they don't happen in the middle of an eSports match.
It's either that or pre-roll ads like you said.
that 6 mbps for every viewer ain't paying for itself
>> Nine years after Amazon’s acquisition of the company, the business remains unprofitable, according to the people, who asked not to be identified discussing private information.
>This ... is wild, I had no idea Twitch wasn't profitable
Indeed very wild. Ironic too, considering the co-founder (Michael Siebel) is a managing director of YC and has advised hundreds of startups about creating businesses.
I wouldn't mind being advised by someone who created a business and sold it to Amazon for a billion dollars, lack of profitability notwithstanding.
So they found the “greater fool”?
Mark Cuban also sold broadcast .com to Yahoo for 5.7 billion
That broadcast.com to Yahoo and Tom selling Myspace to Murdoch are 2 of my favorite flop acquisitions. Honorable mention: Digg selling its soul to their own sales team.
However, Geocities to Yahoo is one of my least fave.
Tumblr to Yahoo for 1.1 billion in the hopes it becomes "The new PDF" was pretty good too.
I'd never heard of broadcast.com before, it is the inspiration for ROI (Radio on the Internet) and Russ Hanneman?
Probably! It was literally putting radio broadcasts on the internet. Tuning in to a radio frequency of a sporting event far away was avant garde and wanted by many. No idea why Yahoo needed to buy someone's janky website with an idea I just explained in 1 sentence, but yeah Yahoo managed to tank it from several billions of $ down to nothing in about a year.
Coulda been the first music streaming service. I hope someone has the minutes to those Yahoo board meetings and makes a cartoon out of it.
I guess one could also argue in these cases that the founder started a very promising company, and the buyer failed to realize its potential.
You must be in marketing
All YC and VC-types care about is that the companies they either invest in or are associated with get a fat check from an acquisition or IPO. After that, they can fail for all they care.
> is a managing director of YC and has advised hundreds of startups about creating businesses.
If I was a startup, I'd think hard about whether a guy who may well just have been lucky (and certainly didn't do anything significant after his first big win) rather than skillful, should be talking to me about conducting my business.
But I'm not a startup, and thank my stars for that.
I think it’s fair to say you’re not the type to ever run a business, successful or not, with that attitude.
He actually left Twitch pretty early on though.
I'm shocked it's not profitable. I've watched a person close to me spend $100/mo buying bits and get back nothing more than a few reaction emotes and jumpscares. Twitch's take on that is 50% isn't it? How on earth is it not profitable running a marketplace with those parameters and so many whales spending compulsively for a few seconds of attention from their favourite streamer?
What nobody tells you is that the cost of hosting all that content, and streaming it live with little lag, is far more expensive than many would guess. Netflix can have boxes with cached content very near you, and your ISP even likes it, as the most streamed content tends to be the same for many users. On Twitch, it's not so easy: You really want everyone to be seeing things with minimal lag, so they can spend all that money buying bits.
Other streaming services, which can use all of the tricks to save bandwidth and compute, have eye-watering AWS costs. Even with their high take rates, I bet there's a lot of streamers that, once accounting for their share of infra costs, end up losing twitch money.
Roughly spoken, there are 5-10 million active streamers, but only 5-10k who even make a significant amount of money. So even while most of them neither see a relevant number of viewers, or any viewer at all, they still create a huge baseline of costs just by existing and streaming.
I've always thought similarly about Uber. All they're doing is providing the platform and don't have to supply cars, drivers, etc. They basically take a cut on all rides worldwide and just have to supply a map solution. It seems to me they should be pretty damn profitable.
I think it is opposite of Uber. Content is free. There is hordes of people willing to do it for very little.
But actually doing the hard lifting of moving lot of bytes for users is the expensive thing. Ordering taxi and then updating location every few seconds is pretty light load. And there is not too many users doing it at one time.
What hard lifting? Flat rate egress.
Twitch also transcodes live, etc. There's much more to streaming infra than just egress costs.
Any interaction attempt with big streamers is worthless - like holding up a letter-sized note to someone driving past you at 80 mph.
I imagine live video is a lot more expensive too. Can't just throw that on a CDN. And unlike YT or TikTok videos with sort of a time limit, Twitch streams can run for hours, chewing up bandwidth while so many "viewers" are giving divided attention at best.
> Can't just throw that on a CDN.
You'd be surprised. I have no idea what Twitch does now, but when it was JTV, we had quite a bit of our streaming video on CDNs. We built a complex infrastructure to arbitrage bandwidth.
But yeah, if you do it naïvely, you'll hemorrhage money.
Right, I figured you can place it on a CDN carefully, but it's not nearly as easy as with non-live video which I'd describe more as "throwing" it on there. And even with the complex infra already built, it must be still more expensive to operate. Everything you cache is only good for 10-15s.
It's more similar than you might think. The big problem is dealing with the bursty nature of live video -- lots of people will start watching a live event at the same time, which can easily trip you over into expensive bandwidth tier for the peak streams. You need to be able to react in real time and reallocate connections to cheaper providers, shape traffic, use peering arrangements, etc. Static video providers have the luxury of time, and can make these decisions slowly.
I forget the exact numbers, but it wasn't totally uncommon for early JTV to burn tens of thousands of dollars on a single stream before we got it under control. Someone starts a stream of a soccer game involving (say) Turkey, and it was like lighting money on fire. The whole event might be over before you could flag the thing down.
But like any other form of video, most streams get no viewers, and are relatively cheap to host when you have a scaled infrastructure.
Hmm yeah, now that I think about it more, a 1hr stream with 10K viewers is no more bandwidth in theory than a 1hr static video viewed 10K times. But there's what you said about burstiness challenges, which is interesting to read about.
Explains why they broke go-live notifications. It's meme-level timely now, sometimes 2-3 hours after they went live.
You can absolutely throw live video on a CDN at which point the bandwidth cost is the same as on demand video. The real-time encoding costs are the real issue.
The cache TTL on VOD is significantly higher, so your whole infrastructure needs to have a live origin, which gets hit repeatedly to get the latest fragments/segments from the origin, from multiple edges/midgresses. I find that our origin consumes an order of magnitude more CPU than transcoding and packaging for live once you have even a couple of thousand live viewers and when serving LL-HLS/ll-dash with a low fragment size it increases more. if you are latency sensitive then i between caching layers are not an option.
exactly. Let's assume 1k viewers and 2/3 of them watching on 'source' quality, which is usually 6 mbps. In this scenario, we're looking at 4 Gbps or 500 MB/s. For a 4h long stream that's 7.2TB! of bandwidth, just for one streamer, excluding the viewers on lower quality
I watch 8-12 long videos on YouTube, but I get your point
The majority of Twitch's costs are going to be revenue to AWS; I wonder if they are still unprofitable if you include the AWS earnings on those services. Or in other words, if AWS hosts Twitch at cost, is it profitable then? If so, or if it's even close, the business would still have value to them. Maybe this layoff is intended to get there.
Twitch’s video infra is not on AWS. Only the non-video stuff is. Video and networking costs a lot.
Oh, that's surprising. It's in-house then? I can't imagine they'd be paying a non-AWS provider.
Yes, it was a complicated part of the acquisition. Twitch owns a lot of hardware and has it in colos all over the place. There are some control plane components in AWS but those are relatively small.
Also not mentioned is the recent rise of Ad-Free ( yes completely AD-FREE as in not a single ad ever! ) platforms like KICK.com [1][2]
Amouranth used to stream exclusively on Twitch.com but now has moved mostly to Kick.com and streams the majority of her time there.
In this respect, Twitch's draconian content policing needs mentioning. People would receive week-long bans for unnamed reasons or super petty things. They rode the woke train as hard as they could and it was a sight to behold! They've recently slightly relaxed some of their disallowed content policies.
[1] Kick - Statistics & Facts https://www.statista.com/topics/11394/kick/#topicOverview
Remains to be seen whether Kick can last long enough to get to profitability. It's certainly advertiser-poison, since what you call "draconian content policing" is closer to what advertisers want to see.
> Also not mentioned is the recent rise of Ad-Free ( yes completely AD-FREE as in not a single ad ever! ) platforms like KICK.com [1][2]
Their ad is pushing their own Stake.com gambling site and having contracts with streamers to gamble on stream
Does this read like an ad to anyone else?
Ad-free....for now.
Like how Uber sold itself on "no need to tip" and there's a big fat tip screen on the App.
Kick has the same cost or more then Twitch (they use the exact same infrastructure under the hood,it's a service sold by Amazone to Twitch and others).
They saved some cost on building the UI etc. by well semi-stealing it from Twitch after a leak but that's just a saving bootstrapping cost not long term operation cost.
When it comes to general advertisement friendliness they are far worse then Twitch, i.e. where Twitch struggles to sell AD slots Kick probably wouldn't even bother.
Like many other start up like companies Kick is not currently profitable and lives from investor capital hoping to make it through.
Kick is deeply intertwined with gambling and many streamers on it frequently are in legal gray area when it comes to gambling law in the EU, they tried to somewhat get way from it but AFIK failed for now.
Kick has many streamers which are often seen as ethical problematic, like being associated with neo-Nazis, making it a no go for most advertisers. But also many streamers stay away from it for that reason and also (maybe more so) the gambling reason.
So AFIK Kick isn't likely to make it longer, except maybe as legally and ethically questionable gambling paltform.
Kick is narrowly avoiding the Truth Social/Gab "this is the platform where all the people banned from Twitter are" stink by basically throwing money at non-problematic streamers until they can't refuse the payout. The streamers saw what happened with Ninja during the Mixer shutdown (getting bought out of his contract, going straight back to Twitch) and probably want that to happen to them.
> So AFIK Kick isn't likely to make it longer, except maybe as legally and ethically questionable gambling paltform
You can't just say they are going to fail if we disclude the main reason why they are going to succeed!
There is a ton of money in gambling. That's why it's a very serious competitor.
They have a rare luxury of being able to tell advertisers to shove it, if they can make all their money doing gambling conversions.
the problem with gambling is its often not legal to advertise it too much, so many of the streams doing so either are in a legal gray area or outright illegal in many EU countries
worse a lot of gambling is deeply intertwined with organized crime in many countries
so if they as long as they have gambling they basically have no much chance to succeed in many areas which are not gambling on a wider scale and might outright bared from operating in some countries without 18+ age verification, too
I doubt kick is making a profit either
Adding to that, I was watching Doug DeMuros round on YouTube the other day.
He noted that his views were down, and he likely suspected some of his audience had moved to TikTok.
Or something along those lines :-)
Doug is a massive Car Review YouTuber - maybe the biggest?
I can’t imagine seeking out the same content I get on YouTube but on TikTok.
But then it’s not content I guess, it’s attention. Is TikTok just stealing attention and will watch anything that served to them on the platform they happen to on that day.
Makes you wonder how much power personalities actually have :-/
It's interesting. I invented 'live streams' to the browser and when youtube and Twitch rose to prominence our days were numbered, simply because we weren't going to play the VC game. And now TikTok does the exact same thing that we were already doing in the 90's and makes enormous headway with it.
It's just a matter of numbers and timing. There's just so many more eyeballs on the web now, and with so much more bandwidth than ever before.
That's true. At the time we had about 110K visitors / day which made us a top 20 website, today that probably wouldn't even put you in the top 1000.
I’d love to know more about this backstory.
I haven’t looked at TikTok streaming but it would make sense if this has risen strongly. Twitch’s biggest category became “just chatting”. This was always a category ripe for being stolen by someone else on its own. If TikTok streaming is rising, I’m wondering if they have eaten into the just charting category growth.
There is a difference in the target demographic though. Even if the most successful channels aren't about videogames, it is the target audience. That is different for TikTok and Youtube with heavy implication about how profitable advertising can be.
Consider that "unprofitable" quote includes the fact that Twitch probably gets AWS compute at cost (Amazon subsidies Twitch server costs)
not to mention new user experience. I've tried to use twitch, several times. Each time I am bombareded with tasks to do and things to click, when really I just want to do what I came for - watch some videos. Youtube and tiktok do that, no BS just here's your videos.
absolutely agree, and that's why I always look out for alternatives like safetwitch, or nitter for twitter
How is it possible for them not to be profitable? Don't they take a 50% cut on subs?
Video is expensive, and streamers don’t like ads.
Amazon has for years been saying that they think that Twitch is under monetized. In their minds, 20% of watch time could be ads, just like regular TV. Streamers don’t like ads: it kills the vibe when your audience gets a 2 minute timeout. So streamers aren’t running enough ad breaks, and try to support themselves via memberships, merch and other alternative monetization methods. And for some, Twitch is only advertising for the real money-maker on another site. So Amazon doesn’t get the ad money they think they should get, and they only get a cut of memberships.
So then it’s a question of how many servers and engineers are needed to support Twitch, because that will determine profitability.
As far as I can tell most streamers most times are, or would be, fine with having roughly 3min of ADs per hour. If it's at an predictable time they can slightly shift around to match up with their content. It's a amount of time perfect to standup, stretch drink, something and similar healthy things you really should do every hour. (You can setup twitch that way.)
But that's just 5% of ads.
And if you change that to 10% it is, as far as I can tell, already in a area where most would seriously consider leaving the platform for good and at 15% I think hardly any streamer would still be on twitch.
Lets be honest the only reason normal TV got away with 20% is because it had no alternatives, and often anyway just ran in the background.
But most funny because how few companies buy ADs on Twitch you might just end up seeing the same 3 ADs in a loop for 20 minuts. As far as I can tell at least outside of the US twitch is sometimes even incapable to run a 3-5min AD break properly due to the lack of bought ADs...
Streamers can pick when to run ads - it's a simple command.
All of you talking about how streamers just can't pick when to run an ad have no idea what you're talking about.
They can schedule a few 15 second ads and then run longer ads manually to fulfill their 50-50 revenue share / preroll exemption.
It depends on the mode. They can choose the time, but then get awful poor ad-revenue. Or they take the juicy contract, and are forced to let twitch decide when ads are rolling. And with gaming content, even choosing the time is not always flowing well with your content.
It’s too bad they are so unimaginative when it comes to that. I mean at the very least they should hand controls to the streamer to run an ad: right now it’s the algorithm that does it.
Also they should primarily look at other ways to monetize. Subs are still the best way, but not everyone has that kind of money.
One other big problem is that there former heads just didn’t get streamers and they ran a lot of big ones out of the building. One streamer with a crazy amount of paid members was treated poorly in an amateurish way.
I think they have new management now which at least seem to be a bit more in tune with what streamers needs are and some of the painpoints.
> I mean at the very least they should hand controls to the streamer to run an ad: right now it’s the algorithm that does it.
They do: as a streamer, you've got a button to trigger an ad break at any time. But the streamers rarely push it, for the reasons already mentioned. Video ads pay so little that it's not worth it to streamers to annoy their audience that way, when direct monetization methods which depend on happy viewers (subscriptions, shout-outs, merch) are much more profitable to them.
There's a real problem of incentive misalignment between the streamers and the platform re: monetizing the stream by sticking ads in it, and I don't think it can be resolved; hence the layoffs.
They do give streamers a button to run an ad break, but they force ads on you if you don't run them often enough. That is very common for many streamers, because the ad breaks hit a large fraction of your viewers and it sort of kills the conversation for everyone.
Is there a button? I recently became affiliate but haven’t seen one, there is just controls for setting the intervals and the amount of time, with more perks as you increase the timeslots.
Can you use the /commercial command? That should fire off 30s of ads. You can also specify longer breaks with e.g. /commercial 120
Manually running enough ads should also stop the auto scheduler from running ads and disable prerolls too
Will try that, probably at the beginning of my stream when I have actually not started yet. Thanks!
I roughly remember that there was one for a time which allowed you to somewhat shift the scheduled hourly ads, but I think they might have removed it after testing. Through I think it also never worked really well either.
I believe the "run an ad" button is for partners.
Ah I see, not there yet ;)
Twitch should have offered a merchandising business via Amazon. It feels like Twitch should have understood how their streamers make money, and ensure that all of that monetization happens via Amazon in some way shape or form, whether that’s a print-on-demand business or facilitating product placements.
Absolutely! That would be a great idea. They could leverage their know how to scan for product placement depending on category you are in. It would seem far more in line.
We never did find out why they banned doc.
I first bought YT premium after I found out the YT model of ad-free is ONLY the equivalent to buying Twitch turbo. A membership to the channel will still get you ads.
And having YT premium changed the game of how I consume all media.
Thanks, Twitch.
Twitch gets 50% of subscriptions. "Bits" go to the streamer, 100% unless they used a third party app.
Streamers have to run a certain amount of ads per hour or they both lose a larger "share" of the ad revenue, and there is a preroll. Prerolls cause a huge impact in viewership so streamers don't want it.
The problem Twitch faces is that it now has multiple competitors: tiktok, youtube, and kick.
It's not just servers/engineers. Twitch has a lot of moderation issues and that requires a lot of labor. That's partly why the others are eating their lunch - little moderation.
Assuming 1k viewers, 2/3 of them watching on 'source' quality (6 mbps). In that case, a 4h stream nets 7.2TB! of egress to end users on highest quality on one channel alone.
Live streaming 1080p 60fps video to a channel with even just a few hundred viewers is a staggering amount of data that you need to push out. Multiply that by thousands of simultaneous streams, and the numbers don't look good. Because even though "Amazon" might be able to afford to send out all that data, "a subdivision owned by Amazon" still has to balance the budget and show that it can cover the cost for its slice of the pie... and Twitch simply can't.
I thin calling it a subdevvision is already an overstatement I think it's not even that.
Amazone provides something like a "live streaming infrastructure service" which they sell to Twitch and others (including the competition like Kick).
For them buying Twitch was good as it allowed them to thoroughly test that service somewhat "in-house", have an initial customer for it to show what it can do etc.
But now that this is done for Amazone there is little value in Twitch, mainly:
- can it make profit (currently no)
- does it improve our image (surprisingly yes, a bit)
- does it allow us to sell more prime memberships (in the past for a short time yes, I don't think anymore)
- does it send bad signals if we shrink/close it now which could affect Amazone stock (somewhat, but if you slowly try to fix it show that you do and then if it doesn't work sell it probably no)
(parts in brackets are speculative)
Not sure I understand the start here: Twitch Interactive is literally a wholly owned subsidiary of Amazon, in the same way that Ring and MGM+ are owned by Amazon. "Clever accounting for tax purposes" aside, it doesn't "pay Amazon" it is Amazon.
Why do you keep calling it Amazone across multiple comments?
I which I would know I don't know how often I already ended up on amazone.de (a site selling farming equipment) or amazone.com (redirects to amazon.fr for some reason), it's quite annoying ;=)
> Live streaming 1080p 60fps video to a channel with even just a few hundred viewers
I've been in streams with less than 100 viewers and seen hundreds of dollars in bits & gifted subs being spent in a single hype train. Are those really unprofitable for Twitch?
When someone buys a sub ($5-25 depending on tier), Twitch gets half the money.
Bits are a little more complicated. Donators have to buy bits ahead of time and then donate them. 100 bits is worth $1 to a streamer. But 100 bits will cost between $1.18 and $1.26 depending on how many bits you buy at once. Buying a larger block means paying a little less. (Side note: Once the streamer has received the bits, they can't be taken back, even if the credit card charge that bought the bits is reversed due to a fraud claim)
If a streamer with <100 viewers was getting hundreds of dollars in a single hype train, then either that streamer is very lucky and has a rich viewer that doesn't mind throwing around money, or I'd suspect something fishy is going on. ie, bits being bought with stolen credit cards, or the whole thing is a money laundering scheme.
> If a streamer with <100 viewers was getting hundreds of dollars in a single hype train, then either that streamer is very lucky and has a rich viewer that doesn't mind throwing around money, or I'd suspect something fishy is going on. ie, bits being bought with stolen credit cards, or the whole thing is a money laundering scheme.
It would occur regularly to several different streamers I used to watch. Double digit level hype trains were the norm and according to the leaked earnings they were making well over 100K on twitch.
Sub prices also depend an your country. In some countries subs are noticeable cheaper then $5. Through I guess most viewers are in the countries where it's somewhat around that price.
I have often wondered when the big spenders are coming from export controlled countries, do the Federals ever get involved?
Most streams with less then 100 viewers I have seen have maybe 1-2 gift subs when streaming 5 hours or so...
Through even on larger streams most gifts come from a relatively small number of people so there definitely are some outliers like you described but as far as I can tell they are the exception not the norm.
How long was the stream? Doesn't sound unprofitable if it's 30min to 1hr (my uneducated guess), but then again idk how many streams get donations like that.
Most "normal" streams get their maximum viewer count around 2 hours into the stream. While streamers tend to have something like a waiting room for the first 10-30min of their stream.
A typical streamer which can life from it but isn't getting rich (or even wealthy!) tends to stream 6+h streams at at least 3 days a week more likely 4-5. Which additional time costs for stuff like filling taxes preparing streams, updating software etc. it's not too rare for streamers to have a 50+ hour week, without getting rich or even wealthy from it. While some pop of and get wealthy or rich it's not the norm. Most do so because they love what they are doing and/or would have problems with other jobs.
I have seen multiple cases of small streamers using Twitch as a form a therapy to help them to overcome social awkwardness or some kinds of anxiety. Also some cases of depressive or otherwise sick people using it to have something like a job even through they are to sick to get any normal job even if they didn't need it for money (to avoid brain rot of being stuck at home and maybe some additional semi-social contacts).
Naturally there are exceptions e.g. of streamers "capturing some whales" and making quite good money with a fraction of the effort of the normal case, but in the end this are exceptions.
I don't know what the streams cost Twitch, but that sounds like a lot of video. Sure viewers are hopping on and off and don't chew bandwidth while off, but still, I suspect 15min of someone streaming Twitch is a lot less valuable than 15min of watching YouTube.
Hollywood accounting. First off, remember they're paying themselves (AWS).
Large streams are more expensive but those get the subs. Ad revenues they are also splitting but they play 3 minutes of ads that interrupts the entire content every 10 minutes.
Just because Amazone owns Twitch doesn't mean they pay themself, they are still two distinct legal entities and Twitch is competing with other non Amazone owned companies (e.g. Kick) for the same resources. If Twitter would not pay Amazone I think it might even somewhat fall under competitive distortion/unfair competition.
Large steams do amortize cost while the bandwidth cost is somewhat scaling per viewer there are other cost which scale per used resolution and per region the stream is streamed to. So on a per-view bases large streams are often not the most expensive. But very small streams with viewers across continents have the highest per-view cost.
AD revenue is split but the main problem is Twitch ADs are not worth much and a bought way to little, often leading to no ADs playing at all for many (non US) regions.
>they play 3 minutes of ads that interrupts the entire content every 10 minutes.
They do not (typo?), it's depending on the streamers setup but ADs are normally more in the 3min per hour basis which is fine to be honest. There are sometimes some additional banner ads but they don't cover the content, don't "play" and are not that disruptive. And there is Twitch Turbo which disables all ADs but streamers still get the AD money. Through that isn't worth it's money for a lot of people.
> If Twitter would not pay Amazone I think it might even somewhat fall under competitive distortion/unfair competition.
It’s “unfair competition” for a company to use its own servers to host its own business?
More like Google sweetening the pot for Play store with ad sale discounts, less like Microsoft having the audacity to bundle IE with the OS. If AWS was Twitch Web Services it would be OK. But Amazon is not Twitch so it is anticompetitive.
This is not at all how it works.
Twitch giving money to Amazon is just a number in a computer somewhere.
Even if the government "forces" them to change those numbers on a computer, there is nothing stopping Amazon from just giving twitch more money to fund it, if they knew it were "profitable".
The real reason is that twitch buys AWS services at cost with zero profit to anyone, and even at those low prices it still can't make money.
Twitch is doomed.
How do you know Twitch is "buying" AWS servers so cheaply though?
Anyways, infrastructure costs is not as important as market share in the long run, bandwidth and transcoding costs will go down with time. If you build a platform where nobody has grounds to compete with you like Twitter, (Threads tried), you've got something really valuable - maybe not 44 billion worth but still.
Every internal departments budget is charged for their AWS services
The citation below isn’t entirely true, internal departments aren’t charged “retail” prices. But they are charged and if you have multiple accounts opened testing different releases of an open source “AWS Solution” in multiple regions that uses the then $5K a month Kendra service along with largish ElasticSearch, you will show up on the naughty list (ask me how I know)
I’m no longer an employee if AWS
https://www.lastweekinaws.com/blog/the-aws-service-i-hate-th...
> When internal game development teams use Isengard accounts, they must pay (via internal accounting) the same rates for AWS compute cycles that outside retail customers pay, according to people close to the teams
Yeah but Twitch is so big it would never pay retail rates to any cloud service, even given the rates for the bulkiest users. And because it's Amazon owned it's not a question of going to AWS but how much they'd negotiate. So on paper Twitch can lose them money but Amazon makes money through AWS.
YouTube is break even and imagine how much content is uploaded and stored there per second, forever. Twitch VODs are deleted after 2 months. Most streamers don't even get any viewers. Those that get viewers get people paying real money on top of ad spam. The numbers don't really add up like how Amazon often pays $0 in tax.
So now you’re saying a company is not allowed to branch out and have any other applications on their own servers?
Should Microsoft also not be allowed to host online Office on Azure?
If Office and Azure are operate by two companies owned by Microsoft instead of MS directly then MS the one operating Office would have to pay the one operating Azure for the hosting.
AWS is not a separate company and even if they were, there is nothing stopping one company from negotiating with another company for special negotiated rates.
You don’t think Netflix is paying rack rates for AWS do you?
no AWS _is_ a different company then Twitch, Amazone owns Twitch but Twitch isn't Amazone.
and yes you can always negotiate rates but it has to be in some "reasonable boundaries" so Twitch still has to pay Amazone and Amazone can't just set the price to just the cost Amazone has, even less so below.
This is not in any way shape or form true.
When you go into the internal “phone tool” if you work for Amazon, AWS, Twitch etc you still eventually get to the same CEO.
(Former AWS employer)
you are aware that twitch still has its own CEO right?
And Jassy was also the “CEO” of AWS before he became the CEO of Amazon.
And when I went to my phone tool, he still reported to Bezos at first
I am supremely curious about this myself.
My guess would be their ad spend is bad in comparison to the other networks (Google, Facebook, TikTok). Could be because their audience isn't worth as much, could be because the ad formats are bad, could be because they can't get advertisers. But unless they are serving ads from Google's network, my guess is they are 4th place at best.
As noted on other threads, their streaming infrastructure must be a burning dumpster fire of money. Live streaming is super hard since you can't edge cache it, and it requires actual hard computer engineering to make work. If a mere mortal company were to try to run a clone of Twitch on AWS, it would run out of money in days. It also likely uses the same hardware as other high-value products, such as AI.
I'm not an expert in this, but I don't think you'd be using similar hardware for video encoding and AI. Encoding uses a lot of compute, but it doesn't use much memory, whereas deep learning models (especially LLMs) use gobs of memory for both training and inference.
If I had to guess, I'd speculate they're doing encoding on their Graviton ARM CPUs: https://community.arm.com/arm-community-blogs/b/infrastructu...
yes encoders are special purpose hardware mostly unrelated to AI
for consumers they tend to overlap because they way to get a good encode is to buy a good graphics card which might be more expensive due to AI and before that crypto
through on server center there are special purpose encode PCIe cards I think, through the ARM CPUs might also be an option
as a side note because people mix it up all the time Twitch is owned by Amazone but a distinct legal entity which has to pay Amazone for any AWS/Server stuff they use in the same way as other customer
kick.com is trying to run a clone of twitch on aws for a while now. too soon to tell.
Running on VC money? AWS sounds like a terrible place to host your live streaming infrastructure unless cost is irrelevant
No they run on online casino money, the founders own Stake.com
I'm finding it curious that everybody here seems to be overlooking this.
---
(I think the thread is too deep and preventing me from replying directly to child post)
I posted here[0] a link to a video with pretty good commentary, speculating on and critiquing their strategy.
To paraphrase it, they are not necessarily banking on operational costs being dwarfed by casino revenue in and of itself... but that Kick will yield exposure and drive more people to their gambling platform overall. He is also skeptical and fairly unconvinced that it'll be a slam dunk venture for them.
Need to watch the video still but my assumption was since it’s illegal/frowned upon to advertise gambling, especially to minors. This is just an earth way to put ad… I mean streams of gambling in front of a large audience.
For sure. That's most of what I meant to convey by linking the video; you get it :>)
Thanks for the context - that is a great revenue source if morally dubious
By spending too much on their execs
TL;DR: more operation cost then it seems, limited AD income, many streamer on which they lose money, increasingly more competition with "unfair advantage" (second platform effect, YT/TickTock; unethical content Kik(gambling); unethical monetization strategies TickTock).
operating a reasonable reliable live streaming service is quite expensive and Twitch is not Amazone. Sure it's owned by it but it still has to buy all computation resources from Amazone, for similar prices then some of the competition like Kick (which deeply interwinded with gambling streams which are profitable but ethically and legally problematic and hence banned on Twitch)
and while they do take a cut this is only profitable if a streamer gets enough subs/bits etc.
but most streamers on twitch do not get that, but might still have people watching across two continents+. E.g. having less then 50 viewers but viewers across 2 continents with a stream earning less 1€ income (not profit) per-hour in average isn't that rare
So the "big streamers" would need to subvention the cost of Twitch being free for streamers, which isn't easy. That some people do use Twitch as a form of marketing platform to goat people on other platforms and then there earn money from then doesn't help (and given how little twitch does against that but often simply could I'm seriously wondering if there is some internal employee corruption scandal to be uncovered).
Then there is another issue Twitch has compared to YT, it ADs are worth way less. Actually often Twitch doesn't even get enough ADs bought out so that some people in some regions sometimes see no or hardly any ADs (no one bought any) or ADs repeat too often...
Lastly and maybe for some people surprisingly given how some tech channels love to blow up any small negative news about twitch it's trying to act "reasonable ethically", i.e. not "oh they are grate people ethically" but "they have limits on how evil they act which are more then the law requires" ethically. You can see this if you compare the usage of dark patterns and highly addictive feedback loops between Twitch and TickTock. The later maxes out everything they can wrt. dark patterns which have addictive effects (at least for vulnerable people) and obfuscate how much money you spend. While Twitch, well does not do so.
Oh and probably there was some mismanagement, not now but a few years ago.
I wonder how much AWS gouges them on price
What are you talking about?
Every single Twitch streamer in my list is profitable. Twitch gets 50% of each subscription. 1 subscription per streamer. You have to subscribe to each streamer individually. Egress is a fixed cost. You pay flat rate for 10GE or 40GE or 100GE. Then people buy virtual currency (bits) so they can "support" their streamers. Some people dump huge amounts of money to be displayed on top of some monthly donation list. I've seen some guy dump $5k every few minutes to some travel streamer. I guess that's what the *coin money gets spent on.
Twitch aka Amazon is surely not losing money.
Then add the annoying ads every so often. Sometimes up to 20 ads in a row. Ridiculous.
I don't get it. From an outside perspective, it feels like they must be raking in the cash - they take a large cut from subscribers and the number of ads is crazy. Viewership growth seems good [1]. The product seems solid and well-built. The demand is clearly there. Serving live video is obviously expensive, but curious if that is really the biggest component (other than personnel). Would be cool if some industry insider could shed some light on what's wrong with this business.
1. I think the infrastructure costs is probably more than you think. It’s probably the single biggest line item. They have to encode every video stream to multiple formats, and then deliver it globally.
2. The core product is pretty mature.
3. Elon raised the bar for how large of a staff cut you can make.
4. Most of their revenue is split with content creators.
5. They lost their CEO about a year ago. New guy has to make his mark.
Twitch just announced a partnership with Nvidia at CES to allow streamers to encode multiple versions of their stream on their own PC and push them to Twitch. Previously, only partner/affiliate streams had transcoded streams at various levels of quality. That might cut back on the amount of transcoding Twitch has to do server side…
They also said they’ll be supporting AV1 and NVENC codecs soon which can help reduce bandwidth costs. They currently only support h264.
This is interesting, as I had an idea to do this when I was working on a competitor service during lockdown. Our idea was to use this to cut the cost on transcoded renditions, and for streamers that didn't have the ability to generate multiple renditions but still wanted them, we would offer it as a service in exchange for a higher cut of their revenue. That said, if anyone gets a benefit from lower quality renditions being distributed, it's Twitch.
If you think about it, the less bandwidth that Twitch consumes through their CDN network, the less money a stream costs per minute. A viewer still watches ads with the same CPM, a viewer still subscribes for the same amount per month per broadcaster, a viewer optionally pays the same for ad-free viewing (Turbo), and a viewer pays the same premium for bits, regardless of what quality they're watching at. So, interestingly enough, the economics of limiting transcoding are more about limited capacity and ensuring a positive cost per streamer. If a streamer does not become an affiliate or partnered broadcaster on the platform, the only revenue Twitch gets from the streamer is the ad money from its viewers. By virtue, they want as many casters on the platform as possible to become affiliates, as being able to get commissions from bit sales and subscriptions gives Twitch more revenue streams for the same content.
So, to your point, they definitely want to be able to support more efficient codecs that are not as patent encumbered as h.265 (which IIRC did have limited support in SE Asian markets), because at the end of the day, if streamers are generating the renditions for the ABR ladder, and ultimately, folks are using lower bitrates, then overall, this cuts costs for the same operational cost.
> They also said they’ll be supporting AV1 and NVENC codecs soon
You mean HEVC (x265)? I believe NVENC is just nvidia's hardware accelerated implementations of existing codecs.
Anyways, that sounds really interesting for both streamers who want more control over their streams' encoding, but obviously for Twitch, as it saves them compute power (though upping their intake bandwith?).
I wonder how feasible it would be for most streamers. Pushing one stream vs 3 or so is quite the difference.
I've always been entirely annoyed that there's no way for me to "encode what Google wants" for YouTube so it can be available directly, at least at highest bitrate.
>3. Elon raised the bar for how large of a staff cut you can make.
Did he? Their revenue is way down, and they've had a lot of downtime. Unlike Netflix, they make most of their money on ads, not subscriptions, so more downtime is more money lost.
They're also on a huge hiring spree right now. Go look at how many roles they're hiring for. I don't think they'd be hiring that much if everything was fine and dandy.
The loss of ad revenue isn’t a consequence of downtime or losing staff, and I wouldn’t agree they’ve had “a lot” of downtime. Most of the drop in ad revenue is a consequence of content management decisions that seem to be a matter of principle for the company’s new owner.
It’s strange to see hiring as an indication that a company is doing poorly; regardless, obviously Twitter is in a position where they’ve needed to eliminate much of their headcount and replace much of the rest.
> The loss of ad revenue isn’t a consequence of downtime or losing staff
Firing the Trust and Safety team had a huge impact on advertising - that's why big brands find Xitter so toxic.
It is certainly also true that Musk's... emanations haven't helped relations with advertisers, but it is the lack of moderation that freaks them out, and also by-the-by chased off a noticeable fraction of the user base.
And now there's the bots:
https://www.threads.net/search?q=Twitter&serp_type=tags&tag_...
> Firing the Trust and Safety team
Yes, technically, adopting a principled stance favoring freedom of expression implies laying off people whose job is to infringe upon freedom of expression, but it’s disingenuous to cast that as a staffing issue rather than a change in policy.
And I’m sure advertisers also really hate the fact that even the ads on the timeline can get community notes. But, well, I’ve seen what other platforms turn into under the foul influence of advertisers and I’m frankly not interested. If that means it has to be subsidized by an eccentric billionaire out of principle, so what? Other billionaires subsidize much more toxic outlets, the Washington Post for instance.
I'm not seeing his principled stance. In fact, it seems business as usual. He still bans content he doesn't agree with and doesn't follow through with anything he says.
I actually love the community notes on ads. Really good stuff.
> they've had a lot of downtime
Twitter is possibly the website most well known for downtime, and has been since literally the beginning. There's no real measure for whether it's true it's down more than usual lately, and sensationalist journalism and anecdotal reports from people with an axe to grind aren't really reliable.
The closest thing I can think of is looking at Google trends, which shows that "twitter down" is pretty consistent over the years:
https://trends.google.com/trends/explore?date=all&geo=US&q=t...
There's a spike in Nov 2022 when the layoffs happened, but again that's not indicative that it's especially bad - just that people were especially whiny about it or anticipating it would be bad
This is what I find ... interesting about the engineering layoffs - was Musk right? Was there a large part of the engineering function at Twitter that was just existing on some mythology, and was in fact just not needed? If so, are the FAANG companies (and others) the same? Legions of engineering roles just bullshit wastes of $200K salaries plus share options and free pizza?
I utterly hate Musk, so firmly hope he was wrong. Just wish Xitter went down more.
> interesting about the engineering layoffs - was Musk right?
Yes and no. Twitter was started before so much of the common “web scale” Open Source projects existed. Cassandra, Kafka, Spark, Kubernetes, etc didn’t exist yet.
So versions of the aforementioned and then some were completely done from scratch at twitter, who has continued to maintain those projects despite them not being the premier open source offering in each of those categories. They also never achieved the scale of some of the largest tech companies where it makes economic sense to have say, a custom database or queue system.
Finally, Twitter has been using GCP for some of their new projects in the last few years, but they still had old legacy systems and teams to maintain that software, so they couldn’t fully reap the rewards of the cloud.
So, if you rebuilt twitter today you could likely do it for a fraction of the engineers they had at peak, by leveraging either cloud or popular existing OSS solutions. But that’s from scratch, not porting millions of lines of legacy code.
What Musk should have done was migrate various systems, then wind down teams. That probably would have worked, but been expensive in the short term.
So I think they cut too much, and I also think they honestly thought more engineers would be up for “hardcore twitter”, instead of quitting.
Musk forgot that all his very loyal Tesla employees may have also factored in their 10x RSU appreciation. It’s a lot easier to put up with insane working hours when your next years stock grant is 500k or million or something. Doesn’t apply at twitter.
Tl;DR: not a Musk hater at all, but he fucked up at Twitter.
> don't think they'd be hiring that much if everything was fine and dandy.
Usually you dont hire if your business is not working or expected to grow
Why fire then rehire so soon then?
How does that work for equity? It must be difficult for them to explain this to new people, as where is the exit-condition for liquidity
The infrastructure is bought from Amazon, who in turn own them. Makes you wonder if it’s actually unprofitable, on the whole.
I think this is a fair question.
If its anything like my corp, Twitch only gets a small discount, if any at all. It's expensive regardless. Network bandwidth alone is probably in the $20+ million a month range.
Well, that's sort of the problem here right; yes at AWS retail you are paying $20 million a month for traffic, but the cost to AWS isn't anywhere near that, in fact how AWS charges for traffic doesn't match to how it incurs costs at all. And in general having desirable services like Twitch and of course being ginormously huge means people want to peer with you and you have more leverage in those peerings, making them cheaper.
One note on line item 1: Only Partners and sometimes affiliates get transcoding. Everyone else is just whatever they stream at.
> think the infrastructure costs is probably more than you think.
exactly. most people with good enough internet stream at 6 mbps CBR. A streamer with 1k viewers costs them several terabytes! egress for a quick 2 hour stream.
> Elon raised the bar for how large of a staff cut you can make.
Every member of staff fired now has a beef with the company, and being a social media company those staff will probably be big social media users with quite a lot of influence. Some may set up competitors or just badmouth you and your product.
Elon discovered this the hard way.
>... and being a social media company those staff will probably be big social media users with quite a lot of influence.
Genuinely curious to hear why you think this is the case. It's my anecdotal experience that the average social media company employee is just an average person like you and I, with an average number of followers.
Amazon already had a long reputation as the Hunger Games of s/w so their rep can't go down much.
This is an “inside a bubble” take.
The idea that software engineers at Twitter are influential on the platform is laughable.
How many of these accounts are software engineers? https://en.wikipedia.org/wiki/List_of_most-followed_Twitter_...
There’s more employees than just SWEs. And you don’t need to be generally famous, you need influence in key niches.
Twitter has historically hired people with large Twitter followings into roles that are more external. Some of them have been interviewed by the news media (eg The Verge). I’d be surprised if it didn’t have an impact on advertisers.
You answered your own question. Twitch is solid and well-built. It doesn't need an army of well-paid engineers to maintain it and isn't seeing a great ROI on new features. Some companies repurpose all, many or some engineers when the spreadsheet says to, others fire them wholesale.
Not many people realise this. Engineers build stuff. When your product is feature complete, you can get rid of most of them.
Big tech companies keeping tens of thousands of engineers on staff despite their core product not seeing substantial changes for years are just wasting money.
No growing company has a feature-complete product, as just load increases can make a product go from fine to inoperable. Sometimes it's not even more users, but more historical data: Something that used ot parse through 3 months of history is probably going to be unhappy with 5 years.
In big tech, having services without anyone having a semblance of maintenance responsibilities tends to lead to relatively quick failures. Even in boring enterprise companies, handing out maintenance to a 3rd party is still going to cost you, and is likely going to lower quality. I've seen way too many companies that ended up rewriting things after leaving a system mostly unmaintained for 5 years made it sop being fit to purpose.
If there's a lesson of software from the last decade is that undermaintained services become zombified software, and can eat your company's brains. That's why a place like google often would rather shut something down than claim it's finished.
No software product that has actual paying users can afford to stop development like that. It needs to constantly keep evolving with the environment, or someone else will fill their niche quickly or it will just atrophy. That may require fewer engineers though, so I agree with you partially.
With software, once you find PMF, it's not the building that's hard, but keeping the users paying and using your product. The entry barrier to building a copycat is very low. So you have to pile on resources to keep your software be the best available.
It's not a complete waste, every engineer you employ is one you don't have to compete with, which matters for big tech companies. Also, employed engineers can be mobilized to react to threats/emergencies. It's just a matter of time before they will be needed. If you are running a ghost ship, will you be able to scale up a response when needed? If the company is just being fleeced, then the answer is "who cares?" I guess.
Most tech products are not well engineered, they are riddled with tech debt as per typical advice. So when a product does succeed, it is usually limping along racing to add features and handle great load while being knee deep in (already) legacy code.
This is all fine and expected, you sacrifice engineering quality for development speed in the early days. Just expect to pay it back by keeping a large engineering team for many years to come, or see your entire tech explode in flames.
Those 'years' are finite however, Twitch has been mature for like a decade already. So finally the tech debt is all paid off, and given failure to develop major successful features, time to cut the staff.
When you're at scale, a .5% increase in performance or decrease in utilization pays for a team of engineers. Being able to have one less SaaS product bill as well. Maybe Twitch isn't at that scale, but some companies certainly are.
Or, rather, they are paying what they think are some of the best people in the world not to go out and start the competition.
No company actually does this, they are just bloated because they have so much money and managers rank/value is determined by how many people they manage.
They explicitly did this in the 00's. Some circles of top companies over a decade ago were convicted for having anti-poaching agreements amongst each other.
May be a bit different now (as others said, free money is gone, so competition cropping up is much harder to do and much less a concern), but the tech boom of the 2000's very much worried about becoming the next MySpace to some startup's Facebook. That's why tech salaries became so high to begin with.
The anti-poaching thing was something completely different. That was preventing other companies from hiring people away from them because they were useful employees, not hiring people to prevent them from competing. Also, anti-poaching agreement kept salaries lower, it didn't inflate them.
It goes both ways. They can't collude woth hundreds of studios so they offer top salaries to out-compete the bulk of competition. Then for the remaining studios who can pay, they sign the agreements so they don't keep trying to one-up each other. Which would be bad for their business if they start trying to bid 300k for every worker (which may be what they deserve, but companies will always penny pinch).
>That was preventing other companies from hiring people away from them because they were useful employees, not hiring people to prevent them from competing.
Aren't these synonymous? You either entrap a necessary employee with contracts and/or absolute top compensation becsuse they are useful or even vital. No one's colluding to keep a janirot wage low (well, society is, but it's no one entity you can sue).
Competition is less of a concern when VC’s are tight with their money.
I found it to be rather buggy personally, it constantly freezes and needs to be refreshed
You might need to reapply your thermal paste and reseat your cup hat sink.
It's consistently bad across multiple devices
They need to upgrade their encoding / codec
I actually did replace my liquid cooler and thermal paste on the beast machine, makes no difference
The mobile app certainly has problems, but you don't need hundreds of engineers to squash the remaining bugs.
Sounds silly. Who's going to save the company during the inevitable outages?
They have more competition than ever with youtube streaming actually somewhat catching on and tiktok streams becoming more popular. It seems weird to cut so many engineers when it’s probably most important now to innovate. Its not even just R&D that’s important, either. Their product is worse in some aspects than their competitors and a lot of the reason why they’re still dominant in their space is just the community of users on the website.
I think viewership peaked in 2021 and has been flat or down since then. [1][2][3]
I know some of my friends watch Twitch less because the ad policy became toxic.
[1] https://twitchtracker.com/statistics
[2] https://sullygnome.com/longtermstats
[3] https://streamscharts.com/overview#:~:text=Twitch%20growth%2...
Basing ‘peak’ of a streaming service on a time when people were forced to be indoor seems like a bad metric. They (probably/hopefully) won’t see that rate of growth organically, but that doesn’t mean that it’s the peak.
I was responding to the OP statement (and source with 2021 as the last data point) that "Viewership growth seems good".
Lockdowns were in 2020, not 2021.
Yes, April 2020 gave a huge bump to Twitch and the pandemic obviously had a large impact on the following years. Twitch had really good growth.
But look at the sources I linked. Looks to me like viewership has been down every year since 2021.
I personally switched to youtube* for the streams I watch, since twitch's ads can be really disruptive. Not to mention they used to be ad-free for prime members, while at the same time the ad rolls became longer and longer.
*I pay for youtube premium
Every streaming platform seems to be converting to adding ads on top to cover the costs. Disney+ just did it for my paid membership - which I cancelled
People need to stop paying for a service and then also paying with their time via ads. Desperate moves like this make me wonder if these companies are regular greedy/shitty or if they're reading from the playbooks of cable TV early 1990s.
What happened to the ad policy?
Twitch will run preroll ads on your stream unless you elect to run at least 3 minutes of ads per hour. These preroll ads have a huge effect on viewership because new viewers who tune in to an immediate ad will typically just leave. So, these "elective" ads are not very optional. But, this is a lose-lose situation, because these elective ads are very disruptive to viewers too. They are often implemented as a 90 second ad every 30 minutes. If this doesn't sound bad, remember that this is live content. If you're watching an ad, you're missing out on content, and when the ad is over, there's no way to wind it back to see what you missed.
Besides the ad policies, the Twitch revenue split for subscriptions has been changing over time. Historically it defaulted to 50/50 and most streamers of any decent size audience would have a contract to be granted 70/30 split. However, the 70/30 split has been phased out and today nearly no streamer on the platform has it anymore. This is a huge difference for streamers. The CEO of Twitch was handing out 70/30 split "coupons" as a prize in a live event[1], it's a big deal.
Besides subscription revenue, Twitch is constantly battling to reduce other sources of income, like branded sponsorships. Last year they announced significant restrictions on streamers displaying branded content with sponsors.[2] While these rules were soon reverted, it suggests Twitch is in a fight for its life. All indications point that this is going to continue to be a problem in the future. In short, streamers need to deal with the ads because their revenue from other sources is constantly at threat.
1: https://www.dexerto.com/entertainment/twitch-ceo-surprises-s...
2: https://www.theverge.com/2023/6/7/23752437/twitch-new-ad-rul...
The 70/30 is back again from early this year though in the form of “Partner Plus” , you need 300 subpoints for 3 months to be eligible for it.
And here’s the other thing: why doesn’t an Amazon prime subscription remove ads? Is there even a way to buy an ad-free experience?
I’m not a heavy Twitch user so maybe I’m wrong but I’m struggling to think of a killer feature of Twitch or an aspect of the overall experience that’s better than YouTube Live videos.
At least with YouTube I can watch ad-free with a Premium plan.
> why doesn’t an Amazon prime subscription remove ads? Is there even a way to buy an ad-free experience?
First of all, an Amazon Prime subscription soon won't even remove ads from Amazon Video, so why would it be any different for Twitch?
Second of all, a channel subscription (through Amazon Prime or otherwise) removes ads from that channel. If you want an ad free experience across the whole site, Twitch Turbo is $11.99 USD.
Prime USED to remove ads site-wide, but that was shuttered. Turbo will probably go away sometime in the future as well, as it's mostly there to offer a product for developing markets where Prime doesn't exist yet.
I don't subscribe to any channels because Turbo exists; they probably don't like that.
> I’m wrong but I’m struggling to think of a killer feature of Twitch or an aspect of the overall experience that’s better than YouTube Live videos.
Discoverability, content creators and community.
Live streaming is a second class citizen on youtube, and as such it is hidden under dropdowns, the live streams aren't always on the top of your followers, live recommendations are worse than useless and the big creators that move to youtube do like Ninja with Mixer, with a big fat paycheck to justify the loss of viewership and community.
wait do the ads roll based on time since viewer connected?
Back in the day the streamer would take a break and roll some ads, so you knew you didn't miss anything ...
You can't show female-presenting cleavage, for one. They change their "attire policy" on a near-weekly basis.
Is it exploitative? Empowering? Toxic? Who knows! Everyone argues about everything.
Twitch is ban happy with anything even remotely controversial. Things that can be suggestive or comments that can be interpreted as offensive will garner a ban. And they hate anything even remotely sex-related.
Honestly, this stuff needs to move P2P. Platforms are indecisive and fickle. Just a month ago, they flip-flopped on their policy in just two days [1]. And it happens time and time again.
I don't blame the ad networks (after all Twitter had all of the world government and news orgs plus sex and nudity). I blame the Twitch leadership.
If you follow Twitch, the entire leadership is embroiled in the kind of drama you'd expect in a middle or high school.
The community is moving to mostly Kick [2] and somewhat to YouTube Gaming.
[1] https://decrypt.co/209998/twitch-walks-back-changes-after-su...
> You can't show female-presenting cleavage, for one. They change their "attire policy" on a near-weekly basis…. And they hate anything even remotely sex-related.
It seems incomplete to complain about this without also noting that Twitch (along with almost every other social media platform) has increasingly turned into a lead generation platform for OnlyFans. The rules keep changing because the OnlyFans streamers will find whatever line is drawn and absolutely spam the platform with whatever drives traffic to OF.
Which suggests that a less prudish content policy at Twitch might have kept OnlyFans from ever being created in the first place. They literally drove those consumers away to other platforms, squandering their early and dominant position in the market.
There is a reason porn sites are a separate category and not a section of mainstream sites.
I don't want to see porn when I watch news or video games.
If I want to see porn, I know where to find it.
During this past Christmas Twitch "meta" I could not even link clips to friends because it would bring up "related" popular clips of what was basically soft core porn. It goes beyond what we want to watch. It affects how I can use and interact with the service to other people.
Twitch should de-boost such content. That's the easiest method. Super easy to implement and moderate, no waffling on the rules, users are kept happy.
Much easier said than done. A million camgirls all trying to boost their engagement are going to find ways to game your algorithm faster than you are going to find ways to de-boost them. It’s the same fundamental reason Google is overrun with SEO spam and content farms that they can’t simply “de-boost”.
> There is a reason porn sites are a separate category and not a section of mainstream sites.
Aye. Payment providers.
Porn is "high risk" and the fees for processing payments for it are way higher.
Camgirl sites already existed before Twitch, let alone OF. It’s hard to see how turning Twitch into another camgirl site would have been a better strategy than creating a streaming platform for watching people play video games, which was an entirely new niche. I don’t think it’s unreasonable to complain when platforms that were never meant for porn get relentlessly spammed by camgirls.
I think this kind of thing is far far overblown, for the vast majority of streamers these kinds of "internet discourse" dramas don't affect them in any meaningful way. Internet drama is just fuel for the blogspam.
It's all money anything else is rage baiting, kick's pull is the revenue split they'll never be able to maintain if they reach critical mass and the policies that get streamers to leave are the ad/revenue split changes.
Hate anything remotely sex-related? Are we talking about Twitch? They have changed their policy a billion times because they seem hell-bent on avoiding censoring sexual content as much as the possibly can. It’s the users that inevitably find a way to push the boundaries so far that they are forced do something, that is usually so half-assed that it doesn’t change much. At this point Twitch is getting closer to a cam site that funnels people to OnlyFans than it is to its gaming roots.
Kick allows sexual content and gambling content. Both of those are worth quite a bit for the content creators, the first of which is monetized by driving people to OnlyFans, and the second of which is monetized through incentives and partnerships with gambling sites.
(I misread parent a bit.)
Not to say that you are off, but what people here seem to be glossing over if not wholly overlooking is that Kick is entirely backed by founders of an online casino (quick searching will turn up very quickly who).
"partnerships" and "intertwined" that I'm seeing on this submission feel like they are understating it: Kick is owned by a casino.
A Harris Heller clip of a pretty thoughtful take, IMO:
It is more tricky to do p2p because not all viewers use stationary PCs nowadays. There are mobiles or wifi users, who cannot be the rebroadcaster nodes. Bittorenty style delivery maybe will work, just with higher delays.
Youtube is probably good enough for steamers.
Most of their cost will be infrastructure. Encoding and serving multiple streams per channel to different devices with a low buffer must be expensive.
On the other hand: they host everything on AWS. Which Amazon owns. So while Twitch might make a loss the parent company might be perfectly happy making up the difference in AWS profits.
Did they have a hiring spree during the pandemic like all the other tech companies and now returning to the mean?
And record numbers of people looking for unhealthy para social content when stuck at home
It's happening at every tech company, over and over again, quietly and loudly.
Unfortunately tech is probably the ur-contrarian and ur-isolated field, and from the reactions I see to this, I worry there will never be a systemic response by employees.
When twitch was acquired by Amazon the rumor was that they were the single biggest AWS customer and they were going to go out of business because they didn’t have the cash to pay the bills. It would have been bad for AWS and Amazon was investing in games. If you read between the lines that’s basically said in this article from that time. https://www.vox.com/2014/8/26/6067085/amazon-twitch-tv-video...
> single biggest AWS
I think that has always been Amazon.com since it runs on AWS.
Amazon doesn't run on AWS. There's separation between Amazon resources and AWS ones, even if much of the tech stack is shared.
> they take a large cut from subscribers
I'm surprised they don't have a 'choose your own revshare' setting, allowing the creator choose how much to pay twitch.
Obviously twitch will recommend more profitable creators, so you get a kind of 'race to the top', with creators offering twitch a larger and larger revshare, knowing that unless they do, their audience size will dwindle.
It also encourages creators to come in from other platforms - if you already have an audience and just want to extract money from them, then you don't need to be in twitches recommendations and can choose a low revshare to milk the subscribers.
I think subscribers are sticky enough that this would pretty quickly drive revshare down.
Especially when I imagine a sizable portion of revenue comes from the very biggest streamers, who may not need discovery from twitch at all and would then default to the lowest value. Like, this model has sort of flipped setup from what I'd think you want; the more successful you are the lower twitches cut.
I suppose they could just make the minimum value 50% (iiuc this is the current value). But I'm still not sure how much it would help.
More profits. Simple as that.
Even in late-stage capitalism, you do a 5-10% staff cut at most to trim the fat so-to-speak.
A 35% cut indicates something with the business is fundamentally wrong.
EDIT: I apologize for the completely unintentional derail.
Maybe they're unwinding some over hiring from when interest rates were low.
I can see 35% of the workforce at a company with a mature product like Twitch doing nothing, or working on random extra features that no longer make sense when interest rates go up. Idk if you'd call it fundamentally wrong, it made sense at a different time.
What's "late-stage capitalism"?
Its modern jargon that refers to multinational, corporate focused, globalized markets. Its gone through a few definitions over the last century, but most recently its been used by the anti-work movement to deride a culture that has all but abandoned individual people in favor of the ultra wealthy. A culture where greed and money are the only virtues and all choices are driven by the bottom line.
Jokes on them, that's how its always been.
Farmers protested the enclosure of the commons, Luddites protested the industrial revolution, trade unionists protested for a 40 hour work week.
It's not foolish to imagine the world could be better.
You'd have to be brainwashed to think the world would be better without the industrial revolution. That's Unabomber territory. Ignorance alone wouldn't suffice... would it?
Would the world be better if there were incentives to promote skilled crafts instead of racing to the bottom to produce cheap shit at scale?
I'm not saying to go back to the stone ages, but ultimately there have been movements to buy local and preserve traditional ways of crafting that are push back against industrialization.
This isn't really correct.
While yes, so called "anti-work"[0] movement (or if you're from the early 2000s, the occupy wall street movement would be of similar philosphical values, for example) uses this term rather often, it derives from the work of the Ernest Mandel[1][2] based on his work in which he used the term to describe the latter stages of capitalism post WWII as he saw it, and how it inevitably would end up in deep inequality and power concentration, to paraphrase the thesis.
As far as "its always been that way" goes, I can't speak for all of the past, but there are clear models in the present that show it doesn't have to be that way. Norway & Sweden come to mind, for example.
[0]: Orewellian term at its best. The movement isn't actually anti work, much like luddites weren't anti technology. This label is attached by and large to people who are centered around ideas related to equitable wealth distribution in society & more worker rights, namely. They don't actually profess to be against work, as far as the movement goes. Individuals may vary. Never the less, its clear doublespeak.
[1]: Notably, a socialist. Wrote the book Late Capitalism (https://www.goodreads.com/en/book/show/931838)
[2]: The term was then popularized by Fredic Jameson, another socialist, though his critique was centered around the culture of post modernism and capitalism intersections: https://jacobin.com/2023/04/ernest-mandel-marixism-late-capi...
The anti work subreddit was founded by people who were truly anti work. It was then co-opted by people in low and middle wage jobs venting about poor working conditions exacerbated by the pandemic. Its a great example of how moderates sanewash extremist ideas to something a bit more palatable, similar to defund the police. While most people probably want a demilitarization of police forces, some people truly want a policefree state.
I would not say a subreddit is a good representation of a movement that existed long before it
Originally, it's the idea that capitalism will have a terminal crisis (i.e. die off) and we are in this final crisis because it will hit a state where productivity cannot be increased and so profit will be too difficult to increase.
In practice, technology and some major events have prevented this from happening. The modern left-wing view is that we have run out of new frontiers to exploit, so the capital class will (has) return to reducing labor costs with more extreme measures among other tactics.
With recent events like a major labor shortage (or future one due to declining population) in the developed world, climate change, a stagnation in productivity per person, gig economy emergence, and widespread privatization being viewed as very destructive; this idea has gotten more popular. Part of this is driven by some companies, especially in tech, having manic levels of optimism about frivolous things.
Personally, it kind of sounds like Malthus. But it is hard to deny that we are in a slump of sorts and that startups that sound like scams appeared to be more common for a while.
You'll get a lot of answers, but I think The Tendency of the Rate of Profit to Fall[1] is key.
Capitalism means competition. Competitors mean reduced profits. As we get into the later stages of the game, that pesky competition aspect comes into play and firms do whatever they can to worm their way out of its consequences.
As profits inevitably fall, firms flail around doing whatever they can to maintain them and cause all sorts of misery for employees, customers, and the world at large. Increasingly brutal exploitation of workers, rotting product quality, all sorts of shenanigans with regulatory capture and rent-seeking as firms try to avoid competition and the need to sell a quality product at a competitive price.
[1] https://en.wikipedia.org/wiki/Tendency_of_the_rate_of_profit...
An implication that capitalism is a fatal disease rather than a way to efficiently exchange value.
It can be both.
Basically, it's the theory that capitalist economies demand continually increasing growth, even increasing rates of growth, in order to remain stable enough to stay hegemonic. The industrial revolution, through most of the 20th century, exhibited this growth, driving capitalism to be the dominant (eventually only) economic system on earth.
Unfortunately, growth is hard, and it slows down. Over time, providing meaningful improvements to the lives of the participants in the economic system fails to keep up with the demands of growth, and you start to see the system going full ouroboros, consuming all the positive impact its created in the lives of its participants in a downward spiral of exploitation and value extraction until there's nothing left. The period of time after the inversion from "making people's lives better" to "making people's lives worse" is "late-stage capitalism", equivocating it to cancer or other terminal diseases.
Personally, I'm more of a "threshold events" theorist, and that enshittification is just reversion to the mean, but that's the pitch.
I’ve never been the target audience for this, so sharing anecdata with a sample size of 1 (well, 2 kids). But as I type this my kids are watching some streamer play minecraft on our TV. They’re watching it via YouTube though. I don’t know the last time they used Twitch, and I suspect the youngest doesn’t even know how to get there.
I guess Twitch is probably not in an area of profitable business given the infrastructure cost of video streaming services, especially in that it cannot enjoy all the cost optimization like Netflix/YouTube due to its nature of live streaming.
It's just a brutal space to operate in. Even YouTube barely manages to break even.
Is Section 174 a driver for these layoffs?
It now eliminates the ability for businesses to deduct their R&D expenditures as an expense.
It doesn't eliminate it, just eliminates the ability to realize it 100% up front. Now, it has to be amortized over five years for domestic companies, 15 years for foreign companies.
I can’t imagine this would be an issue for a trillion dollar company
Section 174 usually is more of an issue for smaller/private companies. On the contrary, when I worked for a bigger company, we specifically tried to capitalize as much software development costs as possible, because it makes the company look more profitable. We (all of the software engineers) hated this because, for an internet-facing company that does continuous deployment, bucketing "new work" into CapEx vs "maintenance" into OpEx is nearly impossible when you're just adding new features to an existing product over time.
I wondered about this as well.
Another article I ran across: https://blog.pragmaticengineer.com/section-174/
Worse change in startup history while we are in an high borrowing rate in an inflationary environment with limited capital.
I frequently kept a twitch pop-out in the corner of my screen throughout the day. When uBlock stopped working, I almost immediately stopped using the site. Video interruptions are pretty awful for live content where channel switching is a regular occurrence.
If you are really interested then Twitch Turbo disables ads for about 10 a month,
If you are really interested and also don’t want to spend money there are Tampermonkey scripts which will solve twitch ads too.
You wouldn't steal an AWS compute credit.... /s
That's why you subscribe to the channel you like - or use Twitch Prime if you have Prime.
That doesn't work when you channel hop on a regular basis.
Twitch still has Nitro, which removes ads for all channels
Nitro is Discord, Twitch has Turbo.
Sounds like a win for Twitch - you were costing them money and not giving anything back
They may have been paying for subscriptions, bit rewards/redemptions, prime, etc. Ads are only one source of Twitch's revenue.
Twitch started showing a purple "disable your ad blocker" screen when a block of ads failed to run. I think they probably would have made a lot more money and reduced a lot of churn by simply advertising Turbo instead, which many users don't even know is an option.
Twitch subs remove ads for subscribed channels, so OP doesn't buy subs.
Which is the more likely scenario?
1. OP buys bits and throws them at their favorite streamers despite not being willing to pay for subscriptions.
2. OP pays nothing for Twitch and doesn't watch a single ad.
They lost about $20-40 a month on me alone. There are far more channels than a single person could possibly subscribe to...
Unity and Twitch doing massive layoffs to start the year? I feel somewhat nervous being in video game adjacent SaaS
I saw some hysterical Twitter thread a couple days ago claiming that the end of AAA games was nigh. There are some weird vibes out there.
It's absolutely true that there have been a ton of layoffs in the past ~12 months. But I've seen zero evidence of actual sales slowing down. 2023 saw a ton of big hits, from Zelda to Diablo to Baldur's Gate.
The AAA gaming economics are a different issue: budgets have ballooned so much that it's near impossible to hit breakeven.
The games you mentioned are extreme outliers (no one expected BG3 to do as well as it did), and there have been a number of studio-killing bombs this year.
Can you name them? I have a lot of anger at the AAA studios
Spiderman 2. What the parent is referencing is things we know from the Insomniac leak.
> that the end of AAA games was nigh
this kind of running-it-dry is what is killing "AAA" (big quotes) games: https://en.as.com/meristation/news/ubisoft-has-11-assassins-...
Great year for games , not for game developers. I’m under no illusion that games are dying or anything like that
so much of game dev is work for hire that if the big publicly traded companies tap the breaks on things for a few months to mull over market direction or to make their stock price look better, it doesn't mean anything for the publishers, but results in a wave of game cancelations and layoffs for the tiny work for hire studios way down the line.
That's what is happening right now.
May well be that in 2025/2026 we see a light year of releases.
Honestly Unity has had a slew of problems for years. Completely useless purchase of WETA tech, product not improving markedly, ad network (IronSource) issues, problematic CEO.
The price hike fight was the last straw. They've had a ton of time to fix these issues but haven't responded to users asks, up to the point where viable open-source alternatives are starting to take root.
The remaining employee's workloads are about to increase 50%
People fundamentally misunderstand how this works.
For a large enough product company there's always a years-long queue of feature requests, fixes, optimizations, and other things to do. All of it will never get done! The doable amount of highest-priority items will get picked through a combination of pressures from different people and departments, and will get more or less implemented.
If you cut the workforce by 50%, instead of doing 30% of the infinitely growing backlog, you'll do 15%. Since most of the completed work gets obsoleted or thrown away due to various inefficiencies, there will be some effect, but it will be far from dramatic.
As for the individual workload, you'll carry as much as you let the company put on your back. And that mostly depends on your negotiating skill, and somewhat on the supply/demand dynamics of the current labour market. The latter will tough for the couple of years, but the former is up to you to level up.
That is true for some teams, not true for others.
I've never seen a layoff actually care about what team they're removing from when it comes to ENG.
In this case it's probably 500 across twitch, which for some teams is going to be devastating.
The problem is people misunderstand how this works, so none of that happens. Instead the competition goes to 11 while work is cut by upper managers, leading to "non-business decisions" made by lower managers to cling to their bit, leading to less productivity both in absolute & unit terms.
Also, I think A) is a little bit of red herring designed to create agency and opportunity where there is none. If we mean "negotiate" in an airy high-minded vague sense of "negotiate but don't", sure. At the end of the day these moves, whether intended to or not, leave less room for negotiation.
This comment is pretty hard to understand, but it's disagreeing with a comment that I think is 100% spot on about how layoffs actually work.
There's also the coordination overhead of trying to do all this, without stepping on each others toes, which is substantial.
Now they'll have to jiggle their mouse to appear online twice as often!
They’ll probably give them all chatGPT subscriptions and ask them to deal with it. If that goes well they’ll probably cut the staff in half again.
Not an engineer so I'm curious... Is this actually a thing that's happening in Eng orgs these days?
Can't speak for other places, but at Meta everyone effectively has a free GPT4 subscription.
If you’re an eng and not using ChatGPT/copilot you’re going to get left behind pretty soon.
It's unsettling how many times GPT 4.5 has been wrong about something that I can easily see and point out and often verify by finding documentation or testing. I don't know how many times I've asked a question and told the wrong thing.
> It's unsettling how many times GPT 4.5 has been wrong
There is no GPT-4.5. Current OpenAI GPT models include various date and context-size checkpoints of 3.5-turbo, 4, and (in preview) 4-turbo.
That’s too bad for you. I’d say for general corporate development, the output is directly usable 90%+ of the time.
Sure, if you are doing unoriginal low quality work.
Or dogfood their Amazon Q AI
> The remaining employee's workloads are about to increase 50%
Keep in mind that execs will get bonuses for cutting costs but the real workers have additional work without a raise.
The downward spiral seems almost inevitable - attrition, drop in quality, services turn shitty, loss of revenue, repeat.
> attrition, drop in quality, services turn shitty, loss of revenue, repeat
Execs are lauded for cutting costs, parasitically enrich themselves on the carcass of a once-productive business, jump ship to a new host before it all comes crashing down, repeat.
Some execs have already jumped ship. From the article:
"In the final months of 2023, several top executives announced their departures, including Twitch’s chief product officer, chief customer officer and chief content officer. Twitch also lost its chief revenue officer, who worked on Twitch from within Amazon’s Ads unit."
Funny, I read this just recently.
https://adrianco.medium.com/signs-that-its-time-to-leave-a-c...
Sounds like a sweet gig, how do I land one?
Be born in the aristocracy[0] or land one of the very small openings where executives get hired from outside the circle via executive recruiting, which usually means networking your way to VP / SVP at a some kind of notable firm or otherwise getting close to attainment of the executive class.
I hear being an ex-founder is useful in this regard. Apparently, working at McKinsey or Bain or one of the other large "prestigious" consulting firms is also a good move. Going to Harvard, Yale, Stanford or similar univerisities is almost a hard requirement. Almost[1].
Or, in the rarest of events, found a business that is successful and somehow manages to get big enough that you get status by proxy.
In any case, sans the last (and rarest) way, you'll have to walk the walk and talk the talk. It can get unsavory.
[0]: Oligarchy and Plutocracy fit too. Take your pick. To grossly oversimplify: If you're part of the Aristrocratic families (Rockefellers, Dursts etc) thats one way. Another is via being apart of the oligarchy (corporate power is alive and well. from oil companies to big tech) which is often intertwined with aristrocratic insitutions (Harvard, Yale etc). Finally, of course, you have the mesh of percentage at the top that fall into Plutocracy, which are wealthy and powerful themselves but are in service of even wealthier and more powerful oligarchs and artistrocrats in many cases.
[1]: Somehow around the edges you can find your way into it without this, but its challenging to say the least. Usually (but not entirely) its due to the rarest case, being a successful entreprenuer and surviving long enough to be recongized by proxy. Though, sometimes servant becomes the master. See outside executive recruiting
It seems like we could check this. Is your hypothesis that an outsized number of SVP/EVP at top paying tech companies are going to be from either dynastic wealth or from traditional Ivy backgrounds?
They already hail largely from top 50 colleges[0][1], for instance.
We know that Ivy League graduates have better access to opportunity and privilege than anyone else, there's enough out there on this that I would consider it common knowledge by now.
[0]: https://academicinfluence.com/rankings/schools/which-college...
[1]: Note, I didn't say Ivy league, but arisotricatic institutions. These include many state universities with large alumni endowments and historical privileges.
I don’t care that much about fortune 500. I make more than some C level on the lower end of the list as an IC at FAANG. I’m not talking about people making high six or low seven figure a year packages, i’m talking about people making more than most professional athletes.
Then squarely look at the Ivys. Majority come from there either directly or by lineage.
Bohemian Grove, after the human sacrifice. They throw the skull up at the Owls Nest Camp like flowers at a wedding and the person to catch it becomes the next megacorp executive.
ask sam altman what he did - I still can't figure out how he went from "startup that went nowhere" to "hand out other people's money at YC until paulg fires him" to "CEO of openai".
Glad I'm not the only one
Something called hard work?
and they say HN has no sense of humour, bravo
Please go try to build a company, hire people, make payroll, and.... actually build something. Then get back to me.
I'm almost expecting a mention of bootstraps, and not of the CSS framework variety.
Nah, just a basic understanding of how a business works. I suggest you read up!
Bless you my sweet summer child.
(OP, in some of the longform pieces written since The Event they touch on this transition being a mystery too, but I think it's a tale as old as time: earnest, smile on their face, performs work and passion, team player, right place right time and asked.)
Econ 101, read it.
Sell your soul. You have to be capable of looking at people and erasing their humanity/removing your empathy.
Necessary but not sufficient.
Also, don't confuse empathy and sympathy - you need to extinguish the latter, but the former is incredibly important to your ability to play suckers.
I think you might have them backwards? Empathy is the one where you viscerally feel the other person, sympathy is where you can simulate what they're feeling but without that deeper connection, or at least that's how I was taught it.
How dare those people build a business and create jobs! They must have no humanity.
Geez.
These are just some of the lies that anyone in a position to make money exploiting people tells themselves, talk to any drug dealer, you'll get similar answers. We all do it to some extent though, the developer creating a heinous subscription cancel flow, the designer making bail bonds ads. You build walls and look the other way. Every one of these actions forces you to give up some of your empathy for the individuals you exploit, the scale at which most execs operate is just mind boggling in comparison.
Most execs aren't founders
In the immortal words of George Carlin: "It's a big club, and you ain’t in it."
With the amount of layoffs tech has had in the last year I imagine attrition is less of an issue. Maybe they factored that in.
The American Dialect Society's 2023 Word of the Year is... "enshittification"
https://americandialect.org/2023-word-of-the-year-is-enshitt...
I wished they co-slanged it as "encrapification" because NPR did a report on it and did not mention the word on air. I think it's a valuable web-evolution term.
The real workers? So the execs that literally run the company and give people the jobs are... what exactly?
Leeches, arbitraging the labor of the actual, real workers.
Low IQ opinion
Overpaid parasites in a lot of cases.
Great, if you can do the job, feel free to apply.
Please, I'm not in the right class nor do I have the right family to get such a position.
Are you a C-level exec? It's strange to me when working class people defend them.
lol that you think that's how it works. How many companies have you created? How many jobs?
You hold a pretty naive view of how a business operates.
The unequal partner in a near/actual exploitative working arrangement
Please read Business 101 sweet child.
You're overestimating things like Twitter and Twitch. The reason these layoffs can occur is that these products are solidified, you can't really improve them much, there's not much real work there.
And Twitter apparently had 20 million lines of microservices so it's not like their engineers were doing a good job, despite it being a legacy codebase, all they shipped for 10 years was 1 major redesign and Spaces + NFTs before Dorsey was fully out.
That said if they fired the report moderation team then yes it scales linearly.
The consumer facing product is closer to solidified, but advertising, moderation, etc features need to change over time.
That's a sizeable cut... So much for those hoping the tech job market would recover in 2024. So far this year we've already had another couple thousand back in the job market – a market that expanded by just 700 jobs in 2023.
I've been watching Twitch less and less over the years as the site has slowly drifted away from its original purpose and become more and more infested with boring IRL streams and e-girls who only use it to advertise their onlyfans, effectively driving traffic off site (and who are, for some reason, allowed to stream half naked on a site full of children).
I wonder if it's just me, or if this is part of the reason for the userbase's stagnation.
For companies like Twitch or Kick, how much do layoffs like these affect the actual streamers?
(Like are the layoffs usually accompanied by them reducing the streamer's revenue share, or things like that?)
Right before this they chose to exit Korea. https://blog.twitch.tv/en/2023/12/05/an-update-on-twitch-in-...
that has nothing to do with staffing. Korea has a uniquely hostile ISP market where service providers want to charge foreign services ridiculous amounts (versus peering agreements in most markets) for access to Korean consumer networks
Korea has a philosophy of local conglomerates first and foreign companies only existing if they prop the local conglomerate up.
It's a very good strategy as the Korean market is lucrative and the Korean companies have opportunities to spread worldwide. (they just suck at it)
Twitch got sent a foreigner-tax and didn't pay it, that's all. Korea already has a thriving version of Twitch called AfreecaTV. (edit: Oh it's not that thriving on their international site, maybe Korean site is better.)
>Korea has a philosophy of local conglomerates first and foreign companies only existing if they prop the local conglomerate up.
I don't doubt that there is some degree of domestic favoratism—it would be surprising if there weren't any—but Korea was for years the last bastion of Internet Explorer because of government requirements, as opposed to Chrome, Firefox, or some special Korea-reskinned Chromium. iPhone has lots of market share despite Samsung.[1] Relevant to this discussion, Korean players going back to Starcraft a quarter century ago were and are well known for competing in and livestreaming mostly non Korean-developed videogames.
[1] Yes, I know about Apple being a Samsung customer
What does this have to do with my comment? This just sounds like you wrote a bunch of funny Korean computer history facts.
> (they just suck at it)
That's the counter-argument.
As they don't have competition from global products, they can deliver worse products and don't have the need to improve.
This can be seen in many markets with import restrictions/tarifs.
No, they really just suck at it as a culture. Tech in Korea is terrible and startups are even worse. The culture may be set by this big players though, that's for sure. It's not about competition leading to this. This is just a "grab" based on the great success of international market trade from Korean companies like Samsung, LG, etc. The same way Facebook and others call Chinese tech terrorism, they earned the privilege locally to hinder competition.
Interesting. Is it true what they claim? Why is it so much more costly for them to operate in Korea?
Korea changed the pricing model for network traffic to be "sending party pays". For something like OGN that has a literal TV channel it's less of an issue, but for something like twitch that is only Internet, and tons of video, it's more difficult.
>Korea changed the pricing model for network traffic to be "sending party pays".
the pricing model for network traffic to be "sending party pays by volume" and "receiving party pays flat rate".
It can affect it quite a lot, I think if things like Twitch Rivals, competitions etc etc are dropped or downsized.
Any idea why south korea is particularly cost prohibitive? i would assume twitch would be very keen to have a presence there.
Per: https://blog.twitch.tv/en/2023/12/05/an-update-on-twitch-in-...
Korean implements a "Sending Party Network Pays" tax.Ultimately, the cost to operate Twitch in Korea is prohibitively expensive and we have spent significant effort working to reduce these costs so that we could find a way for the Twitch business to remain in Korea. First, we experimented with a peer-to-peer model for source quality. Then, we adjusted source quality to a maximum of 720p. While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries. Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country.Would be interesting to understand how far they got with the p2p experiments.
I've never worked at Twitch, but I have experimented with P2P video delivery, and the TL;DR from my experiments is that real-time video delivery can not easily provide a consistent, low latency experience, and video experience problems amplify quite quickly. I wrote up a fair bit about this in the comments of a different HN post a while ago: https://news.ycombinator.com/context?id=33070218
https://carnegieendowment.org/2021/08/17/afterword-korea-s-c...
tl;dr is that SK has some big fees for data users that have a disproportionate impact on non-Korean companies
Wouldn't the work around then be for Twitch to do a 49-51 split with a South Korean ISP to get favortism?
These entrenchment laws are there to favor the big ISPs in SK, it would stand to reason that they would be happy to make money in such an arrangement, and Twitch gets a secondary downstream benefits that they can reap.
There’s a good chance someone already had this idea, explored it, and found a reason why it can’t work.
I'm not so sure. Amazon doesn't have a history of doing this sort of thing, I don't know that its in their DNA.
I'm willing to bet there was no real diligence to an idea like this as a result. I was of course postulating myself (and don't know the inner details of Twitch either) however, upon thinking about it further, it seems unlikely it was ever seriously entertained, if at all.
This was discussed here [0]. The tl;dr is that South Korea has the opposite of net neutrality: instead of charging the consumer for excess bandwidth, they charge the service providers. Streaming video is extremely bandwidth-intensive, so Twitch can't afford to keep streaming if they're charged for every GB.
They just didn't care the South Korean market enough. Many blame South Korea's sending party network fee, but the biggest competitor to Twitch in South Korea, namely AfreecaTV, has been fine operating in South Korea under the same network fee terms. Twitch just didn't want and/or lacked the ability to adapt to the South Korean market.
Nick Plott (a longtime American commentator for StarCraft Brood War who lives and works in Korea) has a video that goes into this: https://youtu.be/o9n2PRbwGMY
not an expert, but have read that South Korea's ISP's get to charge Twitch for the bandwidth they consume (no net neutrality). RIP.
35% of twitch is 500 employees, so few?? Oo
I dunno why I was thinking twitch to be much bigger... when you look at unity which was 7000...
Well, keep in mind that a lot of the ops is AWS.
Weird to see layoffs at the beginning of the year, when fresh budgets and plans are availiable. Then again, since this is happening this early, this is probably a 2023 decision.
I was laid of January 2023 and looking back, it was decided in late November/early December. I even remember a managers/CTO-only meeting during an engineering-wide offsite that reeked of secrecy/sketchiness.
If they had done this in December, people would be outraged that they're laying off right before the holidays. January is fine (if one thinks layoffs are fine in general).
Don't U.S companies have their fiscal year wrapped around June?
US companies can define their own fiscal year.
I honestly wonder how the softcore content works out in terms of impacting Twitch's balance sheet.
I'm not interested in it, but I'm not against it. Yet I genuinely question how it works in Twitch's favor in any material way.
Basically, I look at the softcore streams as those streamers using Twitch as a platform to provide additional content for no meaningful capital cost to the themselves (the streamers, not Twitch). It's basically a free additional discovery and advertising channel to attract new users to their core monetization platform (like OnlyFans) where they make their actual money. Twitch is basically giving them a free platform to direct most of the money to another platform, not to Twitch.
So where is Twitch making real money in that? If you're telling me through subs and bits, you're out of your mind, because that's peanuts compared to what those gals are getting from their OnlyFans, merch, other donation platforms, etc. They're snatching up nickels while the comparative money firehose is pointed elsewhere, all while diluting their brand at least a bit. Granted, I feel they need to expand their audience regardless out of the video game niche, but I question if this has been materially moving the needle.
-----
Don't even get me started on the other core issues. The abhorrent recommendations and difficulty of discovery, the inadequate monetization options for streamers, the limited number of advertisers and where I only get recommended product categories (like energy drinks) I have never bought in my existence, etc.
> So where is Twitch making real money in that? If you're telling me through subs and bits, you're out of your mind, because that's peanuts compared to what those gals are getting from their OnlyFans, merch, other donation platforms, etc.
I don't really understand this logic. The fact that they make more money somewhere else means that they should have to somehow give that money to Twitch as well? If Twitch isn't set up to be able to make a profit from subs and bits, that sounds like an issue with their business model, and they should find a better way to monetize users on their site. From some very basic searching, it looks like there are NBA, MLB, and NFL players who stream on Twitch, as well as professional musicians and actors, and I imagine most of them aren't making the majority of their income on Twitch either, so should Twitch be trying to get a cut of their product endorsement deals and other sources of income that come from being famous?
I'm not saying you're necessarily wrong that that Twitch is losing money on them, but I don't really see how that's something specific to one type of streamer. If the issue is the ratio of subscribers/donations to the number of people watching those streams, why not just make policies about that specifically, like putting limits on how frequently someone can stream after a certain number of hours without having a certain amount of revenue either via subs/donations or showing ads? I think they'd make much more effective strides towards profitability focusing on stuff like that.
My point wasn't that Twitch should be given the money for no reason, but that Twitch is foolish for not finding ways to be the platform in which people want to pay the money through, instead of the third-party platforms.
Donations is a great example. Look at how much large streamers get from third-party donation sites, versus what streamers get from subscriptions and bits. It is wildly unbalanced in favor of third-party sites. That's on Twitch, for failing to figure out how to better incentivize viewers to pay via Twitch, as opposed to those viewers going to a third-party platform to pay instead.
That's my real point. Twitch has monetization options, but they pale in comparison to third parties, ergo that's where a lot of a streamer's (not talking just softcore streamers, but in general) revenue comes from -- third parties, and not Twitch. Twitch desperately needs to figure out how to provide more competitive and appealing options to both viewers and its platform streamers, lest it continue to lose out on revenue by simply being a vastly inferior option to everywhere else.
it’s because they’re woke and think it’s sexist to ban that stuff
Unity is doing 25% layoff. Some other company laid off all 200 employees.
What’s going on suddenly? Did the holiday earnings sucked for tech? Is it new tax laws?
Could be the result of hiring bunch of mediocre developers that are getting pumped out of universities these days.
What does Amazon use for their ads network?
My guess is that it just isn't competitive and so Twitch can't monetize.
Or maybe it is the demographic. But the ads network is my first guess.
They use the Amazon Advertising Network.
Their advertising machine is third largest revenue generator next to sellers fees and AWS.
IIUC their advertising machine isn't quite as general as the networks of Google and Meta, and gains a large portion of its revenue from ads on Amazon Retail, which may not be competitive.
It's a guess as to the root cause.
1600 ish down to 1100. That's a big percentage cut, but not a big number cut.
I'm surprised they're not just letting natural attrition run its course.
When is 500 employees not a big number cut?
The WARN Act calls mass layoffs at just 50 employees. https://www.dir.ca.gov/dlse/WARN-FAQs.html
Maybe we’re being desensitized to layoffs but I agree that that’s a big number.
Wonder if a Twitch + OnlyFans merger would work.
twitch should focus on sports and esports, and not on fan-based communities which are so cringe with personalized emotes and whatnot. turbo should be cheaper for international audience. high-quality live video should be paid. everybody else should get pseudo-live video. it should make partnerships and deals both with gaming and sports companies (and platforms like Steam) and sports/e-sports event companies. they should also stop promoting amazon, it was very boring when every streamer was selling that amazon prime bullshit instead of giving me content. I would pay to watch twitch, but not monthly as I only care about a few events a year for the game I like to watch (counter-strike).
Esports so far has been a terrible business. No one wants to pay PPV for vidya games when you can watch so much of that for free. And most orgs have failed to find any real means of revenue. Just one example the Overwatch league that required millions invested to own a team is being shut down
Esports is at it's infancy, but increasing in size and developing. But yeah they would have to innovate, and would be a challenge. And have a focused strategy. Is there any other segment where Twitch currently holds an advantageous position? Counter-strike majors are mainly watched through twitch even though steam offers in-game streams.
Esports has been a thing since the 90s with Quake and Unreal tournaments.
I agree with the other poster, Esports isn’t a massive money maker like how the world championships for scrabble aren’t a massive money maker either.
It’s extremely niche and the audience demographics are mostly poor, it’s not a boon you think it is.
You can be smart about it like Valve and Riot or you can be stupid about it like Blizzard and Faze. Although Faze seems to be smart in how stupid the execution was.
If esports couldn’t make it during the pandemic, I doubt it would make it now when money is very expensive.
I remember watching a televised Starcraft tournament in 2001 in Korea. Maybe there just isn't a big market for it outside of a few countries. It's not at all in its infancy. The big money is in real sports.
Hmm, so they’re starting to feel the effects of ZIRP on pause, good.
But they’re also still in the mindset that they need to prevent boobs at all costs.
Say what you want about the anything, ZIRP being on pause is about the greatest thing going right now.
Unless you’re trying to buy a home I guess.
I doubt it matters. They wanted to be big in Korea. Local competitors got big instead. So they're leaving instead of spending more money. Interest rates could be 0% and you still wouldn't necessarily want to borrow money to bail out a sub-business that doesn't work.
They are preventing boobs? Have you ever taken a look at Twitch's Pools, Hot Tubs, and Beaches category? They are complicit in encouraging showing boobs
You must have missed all the recent news and controversy lately.
Why is it good? Because corporations fire their employees? Not sure why that would be good for most people unless you are the FED lol
Yes.
Companies that have spent the last decade “cooperating” by flexing their monopolies and enjoying their artificially pumped up numbers, should have to deflate.
I am hopeful for at least two more rounds of cuts at all of these giants. They have done absolutely nothing customer focused in years and it is about time they feel some heat.
Between censorship, data selling and collection abuses, anti-competitive practices, stale services, outright harmful manipulation of every age group, known and exploited mental health and echo chamber issues, narrative pushing, government collaboration… yea man, watch me shed a tear for these texh companies.
Most of these tech platforms are stuck in 2017, despite being 2024.
Twitch and all of these other platforms have competitors eating their lunch, but they're paralyzed and unable to do anything about it because of they made a deal with the censorship devil. It's also been implemented for too long to reverse course and allow boobs, as they cannot risk upsetting their few remaining skittish advertisers.
Rather than weathering the storm with their endless supply of capital, most of the tech platforms caved to idealogical pressure and implemented algorithmic moderation systems and ideologically motivated content policies starting in 2017. The result has been alienating the undercurrent that really drives traffic to their platforms. It's ridiculous that most creators view getting banned as a rite of passage and indicator of future success on upcoming platforms like X, TikTok, and Rumble, but here we are.
I would feel bad, but these stagnant tech companies really have nobody to blame but themselves. They're ideologically captured to such a degree they don't see what's happening, and if you explain it, they'll deny it rather than entertain the idea.
Maybe this will be a good time to remove the X rated and otherwise gross content (there are other sites for this kind of stuff) and focus on the core experience.
Just kidding. They will probably double down on it and make it a onlyfans lite.
Maybe go read their policy at https://safety.twitch.tv/s/article/Sexual-Content-Policy-Upd...
And if you find something you think breaks that, report it.
Sorry to hear about the job losses, but what's a Twitch?
I am being facetious of course, but I honestly haven't heard of anyone using Twitch in quite a while. Maybe I'm just out of touch, but it doesn't seem to have much mind share anymore. Hope they all find better positions soon.
AI is taking over. Simple as that $$$