Where Does Twitch Get Its Revenue From?
Twitch is a popular online platform that can host video game players from all types of backgrounds. Millions of people log on daily to stream themselves playing their favorite game or just to watch others play. Today, it is valued at about four billion dollars. How does Twitch make all that money? We are about to delve deeper into this online cash cow and find out.
Twitch Is a Giant
Twitch is huge for esports. Earlier this year, its users live streamed over two billion hours of gaming videos. That’s an average of 15 million viewers a day. The potential to bring in money is huge. Twitch has surpassed all other platforms of the same category. By next year, the company forecasts that they are going to have 589 million viewers around the world.
A lot of people who don’t get why Twitch is so popular may ask why anyone wants to watch someone play video games for hours on end. However, Twitch has figured out that is what gamers want. People are eager to see others playing video games they know so well. It has an excellent community atmosphere, and the platform is free to stream while hosting millions of videos at a time.
Advertisements and Subscribers
So, if Twitch doesn’t cost any money to join, how does it make money? It depends heavily on ads and subscriptions. When you start watching videos on here, you soon notice advertisements that cut into streams and are seen on sidebars. These ads can cost up to $10 per view or impression. Considering all the videos that currently stream on the platform, that translates to billions of dollars. While it has not stated publicly how much it has made through ads, it’s estimated that they are going to bring in close to two billion dollars in two years.
Subscriptions also fuel Twitch’s revenue. Membership is around five dollars a month for the basic tier. If you want more features and add-ons, you can upgrade to Twitch Turbo which is about nine dollars per month. Here, viewers don’t have as many advertisements to wade through, there is more video storage, and visual upgrades that are exclusive to these members.
There are also in-app purchases that you can make in Twitch. These purchases are called Bits and start at about two dollars for 100 of them. These Bits are used for chat upgrades such as larger emoticons and exclusive pictures. Since its launch, users have purchased $14 million Bits for their chats.
With Twitch, a little goes a long way. Although it is free to watch the videos, the platform knows that most users are going to subscribe anyway. It costs only a few dollars a month, and with millions of subscribers, that adds up to something substantial. Twitch is one of the preferred ways to keep up with popular gamers and discover up and coming ones. Esports is quickly becoming a giant in countries around the world, and Twitch is taking a piece of that pie for itself.