Audience Engagement Top Stories
6 mins read

Twitch, Facebook, YouTube and the future of Interactive Video

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With the huge amounts of investment into digital video over the past few years, from all corners of the media industry, the question on everyone’s lips is “what is the future of interactive video?” We’ve seen everything from the famous stunts of people watching puddles and watermelons to the rapid rise and disappearance of circular video on Snapchat. But the real future of the medium is likely to be something that has been quietly growing for the past few years, and to which huge brands and publishers are slowly waking: Twitch.

First launched in 2011 as a gaming-related offshoot of the more general livestreaming site, provided gamers an alternative to YouTube for broadcasting their gameplay live. Its USP – and the feature that has enabled its growth – was the live chat that viewers partake in during the stream, and to which the streamers themselves can respond. Over the next few years its user-base and audiences grew, until February 2014 when its status as one of the primary sources of peak web traffic in the US led to its acquisition by Amazon and the closure of

Since then, those figures have steadily increased, and last month alone saw 762 million hours of livestreamed video content consumed on the platform. In 2017, the average Twitch user spent 106 minutes daily on the platform. In a curious twist of fate, a significant proportion of that growth is in ‘In Real Life [IRL]’ video, livestreams of every activities like eating or social exploration – exactly the sort of content around which was based originally.

It coincides with huge investment in livestreaming elsewhere on the internet, but the differences between Twitch and its contemporaries give it a number of competitive advantages in the interactive video battle royale. As brand publishers like BuzzFeed and Disney are looking to invest time and resources in new platforms as Facebook overpromises and underdelivers, that gives Twitch huge competitive advantages.

The rise and rise of Live

There are many reasons behind the rise of livestreaming services like Twitch. Firstly, by most accounts, television ad spending has plateau’d in the US (in the UK it is predicted to rebound slightly) due to unbundling, the rise of OTT services and a previously unthinkable fall in the number of television sets in households. Advertisers are now having to look elsewhere for video content, which still provides the highest ROI of any ad format according to numerous studies.

By contrast, audience time spent on digital mediums – particularly mobile – is only increasing. The latest Mary Meeker Internet Trends Report found that there was still a $7 billion spending gap around the amount of time people spend with mobile content relative to the amount of ad money that is spent on those mediums. Twitch, it should be noted, has a mobile app, which accounted for 35% of its total views back in 2016 (its rather annoying 2017 retrospective doesn’t share a more recent stat).

Secondly, the cost of entry – both in terms of technical ability and cost – to broadcast a professional-quality stream has continued to fall and, with the advent of consumer technology like the Elgato Stream Deck, is possible from a variety of different platforms. Twitch is integrated into every major modern console save for the Nintendo Switch, in addition to desktop and mobile devices.

Finally, the platforms themselves – primarily YouTube and Facebook – are responding to consumer trends and actively encouraging livestreaming among their users, because the time-limited nature of a livestream recreates the concept of scarcity, against which they can sell premium ads. At a Working With Google event last week, a member of its advertising partnerships team revealed that channels that livestream once or more per week have seen a 40% uptick in subscriptions, and a 70% increase in watch time, and encouraged the audience to be mindful to be interactive within their streams: “[Livestreaming] is now accessible for everyone from the main app. You don’t have to install any products or special equipment. You can host a conversation because there’s chat, live chat, running on the right side.”

The Twitch factor

So why is Twitch in such a strong position to capitalise on those trends? For one thing, it is keenly aware that the one-to-one relationship between its streamers and audience enabled by the chat feature deepens the engagement between both parties. That’s hugely beneficial to Twitch, since it takes a cut of the subscription fees that audiences pay for access to those streamers – and since users typically get a shout-out from the streamer for re-upping a subscription, there’s a positive feedback loop that benefits Twitch’s bottom line.

Additionally, as with YouTube and Facebook, that deep engagement in a livestream is something that can be marketed to advertisers as a huge plus. Speaking at Monetising Media back in 2016, Twitch’s VP of Sales of Europe Steve Ford explained:

“That kind of deep connection, that there’s something very emotional happening around that experience, is something brands want to be involved with. Facebook made a statement about the importance of live video. The key data driver for Facebook is that when they measure engagement… live video will generate 10x what [regular] video does.”

And as television adspend falls and brands look for ways to reach Twitch’s relatively affluent audience, more mainstream brands are sniffing around: In March of last year Ford told the Drum that the platform now makes more money from non-gaming brands than it does from gaming ones.

Twitch’s exalted position as an Amazon company allows it to go one step further down the road of monetising that engagement, too: Back in 2017, it opened an Affiliate scheme that let users purchase games directly through a streamers’ channel, for which it took a cut. Additionally, it was able to launch enormous branded events off the back of that relationship between streamers and audience – TwitchCon attendance for 2017 was 25% higher again than for the previous year, at a reported 50,000 people.

More even than that, though, as the premiere destination for gaming content, Twitch is a go-to destination for esports content. Esports – competitive video gaming – is a huge growth industry, with PwC predicting growth in esports advertising will outpace that of overall digital video advertising, according to its Global Entertainment and Media Outlook 2017-2021 report, and global audiences set to skyrocket. As I set out here, that likely means the platform with access to exclusive broadcast rights is most likely to benefit from the associated increased adspend. Consequently, Twitch’s reported $90 million deal for broadcast rights to the lucrative Overwatch League is, while peanuts compared to the amounts involved in bidding wars for traditional sports’ broadcast rights, a sign of things to come.

But Twitch also has ambitions beyond live gaming content. It recently secured the rights to broadcast 500 episodes of BBC classic Doctor Who, with the Guardian noting that it was the interactive nature of Twitch that made the deal mutually beneficial to all parties. Beyond that, it is also expanding into broadcasting anime through a partnership with Crunchyroll (perhaps because of the well-documented crossover between anime and gaming fans) and original content from Disney-owned creative content studios.

And it’s all because Twitch understands its USP – interactivity – and is fiercely pushing it both with audiences, streamers and potential ad partners.

Clouds on the horizon

None of which is to say that Twitch’s position is unassailable (the recent fall from grace of Facebook among the young is proof that no platform is immortal). Both Facebook and YouTube gunning for pole position as destinations for livestreaming, and even with Amazon’s backing, it would be presumptuous to assume Twitch can maintain its market lead. Facebook, for instance, has entered the bidding war for esports broadcast rights.

There are also more teething pains that Twitch needs to endure to appeal to advertisers and users. It needs to iterate its measurements of user engagement to meet advertiser requirements, for instance, especially important at a time when viewability and effectiveness measurements are under scrutiny. And despite taking every effort to ensure that brands feel confident advertising on the site, the chaotic and often rowdy NSFW nature of livestreaming means that brand safety could raise its head as an issue at any time.

What next?

The most fundamental threat to Twitch’s ascendance, however, is common to all growing media brands: Losing its niche appeal. While its initial success was undoubtedly due to its gaming proposition managing to lure some big names away from YouTube, dragging a huge gaming audience behind it, Twitch’s latest experiments risk alienating its core, lucrative audience. With brands like BuzzFeed looking to have an increased presence on the platform, Twitch will be carefully balancing the revenue potential versus the potential loss of its USP.

Ultimately then, depending upon its actions over the next few years, Twitch might lose its position as the interactive video platform of the future. What is absolutely certain, however, is that it was a successful proof of concept of the potential of interactive video, using technology to enable unprecedentedly deep engagement between content publishers and their audiences.