Twitch, the Amazon-owned platform that has become the home of streaming for esports and gaming in Western markets, has big ambitions in sport.
The company is targeting growth by expanding into content genres beyond gaming. CEO Emmett Shear told Fortune magazine last year:
“We really believe that live interactive video with chat works for any live video, works for any genre whether its sports, politics, music… It’s just a matter of figuring out the right format, the right recipe to bring it to that vertical.”
In sport, Twitch is already working with the NFL and NBA under experimental partnerships. Live games have been streamed on the platform and prominent Twitch streamers have added their own commentary, as they do for gaming content. Shear says Twitch can “democratise” sports broadcasting, uncovering the next generation of broadcasting talent.
Beyond this, the platform has been vague about its plans in sport. If it wants to become a serious sports destination, and use sports video to increase its audiences and revenues, it must convince rights holders to put content on the platform. And if it’s going to realise Shear’s dream of democratising sports broadcasting, it needs live sports content. But the most popular sports properties remain wedded to the model of selling exclusive rights to traditional media platforms for fees that look beyond Twitch’s reach, for now.
On the other hand, there are some good reasons for rights holders to place content on, or sell it to, Twitch. The platform has a large, highly-engaged audience, and offers some potentially intriguing features for sports viewers.
I spoke to several media industry analysts about the opportunities and hurdles for Twitch and sports rights-holders as the platform seeks to expand into the sector.
Arguably the most attractive thing about Twitch from a sports perspective is its massive, young audience that is hard to reach via other media. In September 2017, it reported 15m daily unique users. Its user base is heavily male-skewed, at 81.5 per cent, and is young, with 55 per cent in the 18–34 bracket. Users spend an impressive amount of time on the platform — in September 2017, they watched an average 95 minutes daily, although this figure is thought to be skewed by a relatively small group of very heavy users.
Julian Aquilina, an analyst at Enders Analysis, notes that this audience “can’t be reached through other mechanisms, like traditional TV or even other online video services, because they spend all their time on [Twitch].” So having a presence on Twitch could be compared to sports’ other esports and gaming crossover projects, which have been aimed at capturing younger audiences increasingly spending their time on the latter rather than the former.
The attractiveness of the user base is enhanced by data showing solid interest in sport and, perhaps surprisingly, preparedness to pay to watch it. “Its users over-index for interest in watching traditional sports content,” says Richard Broughton, research director at Ampere Analysis. “This is slightly unusual for the demographic group — younger consumers are normally less likely to be interested in sport… [Twitch users] are also much more likely to be willing to pay for access to sports than the average consumer.”
According to a Q1 2019 survey by Ampere Analysis, of 41,000 internet users in 20 markets, 40 per cent of Twitch users like watching football, compared to 27 per cent of a wider sample representing all internet users. With basketball, 30 per cent of Twitch users enjoyed watching it, compared to 13 per cent of the wider sample.
Football interest was notably high among Twitch users in the US. Nearly 15 per cent said they enjoyed at least occasionally watching the Premier League, with 12 per cent saying the same for the Uefa Champions League, and 11 per cent for LaLiga. Interest in any of these options among the wider US population was below 5 per cent.
One of the truly unique aspects of Twitch audiences is the intense engagement of the communities that build up around popular streamers and channels. Shear is confident this will be transformative for sports audiences online:
“What’s going to be surprising to everyone is how sports goes from something that you watch from home that’s mostly an isolated experience, to something that has deeply connected online communities where people make friends, and get married, and get jobs through the people they meet… That’s what we’ve seen in gaming and I think it’s going to apply across the board.”
Twitch also potentially offers fans a compelling new way of watching sport. Perhaps the most novel feature is Shear’s idea of ‘democratising’ sports broadcasting by allowing amateurs to add commentary to live streams. Just as YouTube unearthed ‘broadcasting’ talent and Instagram unearthed photography talent, Twitch could do the same for sports broadcasting talent, he says: “We all have a model for how [sports broadcasting] works in our heads. I think there’s a huge opportunity for us to make something where any kid can aspire to go try [it], hang their shingle out and see if people enjoy their model.”
This is already being tried under the NFL’s Twitch partnership. The league is taking a cautious approach for now, vetting and limiting the number of ‘co-streamers’ for its games.
“You have to be one of the 30 hand-picked streamers who have been given the right to co-stream,” Shear told Fortune. “We haven’t convinced everyone that it’s a good idea to expand that to an infinite number of people. We’re still testing the waters and figuring it out. We started with just three. We’re at 30 now. You can see us going to 300, to 3,000, to everybody in the near future.”
Another interesting aspect of the Twitch viewing experience is its interactive features. Live chat, in which viewers interact with each other and with streamers during live streams, has been enormously successful in gaming. NFL Thursday Night Football streams in 2018 allowed viewers to bring up graphical overlays with statistics and other information related to the game. This included a game in which viewers could predict things like the number of touchdowns, rushing yards and field goals in a particular quarter. Points were awarded and a league table of predictors was shown at the end of each quarter. Some industry observers have noted it would be a short hop to in-game betting.
Tim Part, consultant at media consultancy MTM London, says Twitch’s features fit with a broader rise in demand for tailored viewing experiences, and foresees sports media more broadly adopting them: “Putting [choices] in fans’ hands is going to be part of the appeal — empowering them to have the experience they want.”
But he thinks succeeding in sport will be harder for Twitch than succeeding in gaming and esports. Whereas Twitch has played a big role in defining the esports viewing experience, sports viewing has already been developed by broadcasters into a refined, high-quality product. “Sports fans, maybe even more than gaming fans, are hard to please,” he says. “They have very high expectations that have been built up over decades by people like [UK pay-television operator] Sky, who are great at building these sports destinations and sports properties — it’s a high standard to live up to.”
Julian Aquilina believes that interactive viewing features will not appeal to everyone, and indeed there is a question mark over whether they will continue to appeal to Twitch users as they get older:
“Twitch has that social side going for it, but for a lot of people that’s… a real detraction from the viewing experience.
“Younger audiences may be more comfortable in that environment. There is a real question whether that [will] change over time, whether they’ll revert as they get older and prefer to be in an ecosystem where they are just watching content themselves, not having this window running down the side of the screen where they are chatting with complete strangers about the football match they are watching.”
Twitch has clear potential as a sports viewing platform. But if it is serious about getting into sport, it must clear some significant hurdles. Speaking in April 2019, Charlie Beall, partner at digital sports consultancy Seven League, put the fundamental challenge as follows: “The reason their business model works so beautifully is that they provide the platform and people put content on it for free. Sport doesn’t work like that. We’ve got a big, established industry of people that want to distribute content for money.”
Twitch does pay rights fees for major esports competitions. But these investments are not central to the platform in the way rights acquisitions are to television broadcasters. The vast majority of Twitch content is user-generated.
Major esports competitions attract Twitch’s biggest peak audiences. But most of content on the platform, accounting for most of the 9-billion-plus hours watched by users annually, is uploaded by individual streamers rather than competition organisers. These streamers are mostly exploiting IP owned by games publishers, and streaming themselves playing games. The publishers for the most part don’t interfere — for them, Twitch is a shop window. As Shear told Fortune:
“We’re in the happy situation where we’re a UGC [user-generated-content] company where game companies see us as marketing… There was a recent headline that said the marketing plan for Apex Legends [a game released this year by publisher Electronic Arts] was: Twitch.”
EA eschewed a pre-release marketing campaign for Apex Legends, and instead paid top Twitch streamers to play it.
There is no sign that Twitch intends to splash out on rights fees for major sports properties. But industry observers nevertheless see a few models whereby it would make sense for rights-holders to put content on the platform.
First, there is the model established by Amazon’s deal with the NFL. Amazon acquired non-exclusive online rights to the league’s Thursday Night Football package, which it is exploiting across its Amazon Prime Video video-on-demand platform as well as Twitch. This essentially gives Twitch access to premium sports content via a traditional rights deal with Amazon’s video platform.
Charlie Beall said:
“I think Twitch would struggle to justify a massive outlay on premium rights… To do that would be an exorbitant amount of money on what is still I guess an experiment. Whereas if Amazon purchased rights, then there’s no reason to think they wouldn’t trial different formats, [including] Twitch. [They could] say ‘We’re going to distribute packages to a younger audience via Twitch and to the mainstream audience via Prime Video’.”
Another option would be for rights-holders to forgo media rights income in order place content on Twitch. They would have to get value from the platform in other ways, for example by accessing a large, young, new audience.
This rationale may work particularly well for small or up-and-coming rights-holders, whose rights don’t generate much income from traditional media. But it could also justify a larger rights-holder putting one of its smaller rights packages on the platform. The NBA, for example, puts live games from its development league, the G League, on Twitch. This is essentially an experiment by a forward-thinking rights-holder, exploring the possibilities of a new platform.
Charlie Beall suggested a new category of sports media rights could open up, aimed specifically at platforms like Twitch, that allow users to edit and adapt content:
“I can imagine in the future a new class of rights emerging, in the same way you have with music and TikTok, where 7-second loops are made available for people to create their own content around. You may get a version of sport which can exist on platforms for users to customise… and layer on personality.” These rights could be packaged separately from traditional video rights, which would still be sold via traditional channels. “That would bring…a new class of user-generated content, but also it would give the sports organisations another rights category — in theory making the pie bigger — and not annoy the existing people who pay quite a lot of money for these rights.”
Any sports property on Twitch would also be able to generate revenue via the platform’s built-in revenue-generating opportunities, which include shares of advertising revenue and the opportunity to offer paid subscriptions to channels. However, this looks like a limited opportunity. By way of a yardstick, only a small number of top-earning streamers currently are able to generate seven-figure revenues.
Industry observers say that Twitch must invest time, careful thought and money in building itself up as a sports destination if it is going to make a business in the genre. There must be a big enough volume of both live and non-live content to drive audiences on the platform, and it must not get lost among gaming and the other genres.
As Charlie Beall said, audiences are “not going to Twitch to see sports content yet. So what is the content that will realign their expectations and get them to think of Twitch as a destination for sports content?… I think that’s going to require quite a lot of investment, in curating content, acquiring content, or in nurturing influencers or creators of some kind.”
Tim Part concurs: “Twitch will have to build scale if they are going to do it… They’ve got to think about it as a big project, and overall proposition development, rather than just hoovering up some rights and whacking them on a platform… They’re really going to have to work hard, even if people come, to keep them there. You come for the live stream; you stay for everything else. They have to think about the everything else if they’re going to make this a success.”
Twitch offers some intriguing prospects for sports, but is a long way from being a significant sports media platform. Given the risks and enduring strength of existing sports media business models, it is smaller, less established properties that look the best fit for it at the moment. The safest route for bigger properties onto the platform looks to be via wider, more traditional rights deals with Amazon. The parent company has, however, been very selective about its acquisitions to date.
Although the opportunity looks limited at present, given Twitch’s stunning success within esports, and its unique features outlined above, sports properties would be advised to keep an eye on its progress in as a sports platform.