How Much Money Could Twitch's New Feature Bring In

TNL Take: In June of 2016, Twitch introduced bits and cheering and provided another means of monetization for streamers outside of subscriptions. In the simplest terms, viewers purchase bits (the lowest price is $1.40 for 100 bits) and then give them to streamers in the form of cheering.

Twitch Bits (Photo: Twitch)

Twitch Bits (Photo: Twitch)

I thought the feature was amazing however it lacked 1 key element: Brands. My idea was this:

  • Custom Bits for Brands
  • Let Streamers/Brands give them away to their audience for Free
  • Audience donates the Brand Bits in the exact same manner and the streamer gets paid on the same revenue share of $0.01 cent per Bit — but charge a 0% Fee — as Twitch will already monetize on the Ad side

While that wasn't implemented, you can watch a Video Ad to earn bits instead of paying - more on that later.  

Last week, Twitch unveiled a new integration for viewers to use Bits and Cheers to support their favorite teams in Overwatch League.

Overwatch Hero Emotes (Photo: Twitch)

Overwatch Hero Emotes (Photo: Twitch)

Here's the interesting part: the revenue generated won't be shared with the teams but goes directly to Twitch and Overwatch League.

How did Week 1 fare?

Total Overwatch League Cheers (Photo: Twitch)

Total Overwatch League Cheers (Photo: Twitch)

Over 21M+ Cheers were contributed by the community which also has an overall goal total to unlock more goodies for Overwatch fans. With a few assumptions, here's how much was generated:

  • At the cheapest conversation rate of 100 bits for $1.40, the total haul would be ~$300,000
  • Lower the weekly run rate to $250,000 to be conservative
  • $1M potential revenue each month

While that maybe a drop in the bucket; all the drops will be necessary to recoup the estimated $90M that Twitch paid for media rights.

I still believe that Brands can be integrated into this ecosystem outside of Watch-to-Earn videos and hopefully will be coming soon.

Further, Twitch continues to evolve from merely lean-back, passive viewing to more engaging and community driven features. 

Facebook Launches Gaming Creator Program Aimed At Twitch, YouTube

TNL Take: To get some insight into how Facebook and Mark Zuckerburg view competition, read this fantastic article on their war with Google over Google Plus. My favorite part is when he addresses his Facebook army and quotes Roman senator Cato the Elder:

“You know, one of my favorite Roman orators ended every speech with the phrase 'Carthago delenda est.‘ Carthage must be destroyed.’ For some reason I think of that now"

When Facebook sees an opportunity or threat, they maximize their vast audience and resources to counter. Case in point - when was the last time you used Google Plus?

Coming right after their exclusive distribution deal with ESL, Facebook has now launched a Gaming Creator program. The program provides creators the following:

  • Helping gaming creators build more engaged communities

  • Increasing discovery and distribution across multiple surfaces, including Facebook.com, Instagram and Oculus. The last one is key as only Facebook currently has VR hardware in house

  • Supporting gaming creators with the types of tools needed for optimal streaming

FB2.png

If all that sounds very familiar it should be as those features and more have been available to Twitch and YouTube streamers for a while. One additional feature that will be slowly rolled out after its December soft launch is tipping - which now allows for a $3M minimum to be given to creators. While the revenue share was not revealed, previously Facebook has taken anywhere from 30% - 45%.

This move also comes on the announcement that Facebook would overhaul its News Feed to focus on mutual connections vs. news or brand updates. Gaming streams would likely be "stickier" that seeing random videos in your feed. You can also envision a future where  Facebook Watch plays into this and monetization (ie: Video Ads) occurs.

 

While there was plenty of outcry over ESL's exclusive deal with Facebook, this is just the beginning for Zuck and Co. to make more inroads into live streaming and esports.

How Did Overwatch League Viewership Perform In Week 1?

TNL Take: It's only Week 1. It's only Week 1. It's only Week 1.

Repeat as necessary.

With so much money and hype riding on Overwatch League, how exactly did Week 1 perform from a viewership perspective?

Again, this doesn't take into account a slew of other Overwatch League monetization options like merchandise or in-game team skins but viewership only using the following methodology:

  • Twitch English stream for comparison
  • 2 Twitch viewership data sources (TwitchTracker and Waypoint Media)
  • Average Concurrent Viewership not Peak/Max
Overwatch League Week 1 Twitch Viewership (Chart: The Next Level)

Overwatch League Week 1 Twitch Viewership (Chart: The Next Level)

Again, it's only Week 1 so don't build a complex financial model on 4 data points but some potential insight:

  • Day 1: Saw some significant viewership with 300K+ concurrent viewers however will be difficult to maintain those numbers across the regular season
  • Day 4: With increased competition from other esports events and the NFL Playoffs, the average concurrent viewership had dropped to half of Day 1
  • With another few weeks of data, we'll be able to see if OWL can maintain their 150,000 concurrent viewership for the rest of the way - which would be good for the inaugural season

What gets really interesting is when you layer the next major esports event against Overwatch League.

TNL068.png
  • Day 3: With the start of ELEAGUE's Boston event, there may have been some migration of viewers from Overwatch to Counter-Strike
  • ELEAGUE performed well head-to-head considering the numerous hours that they were live

This is very early and will good to gauge other esports events for comparison as OWL moves through its season.

Week 2 will have an even bigger test for Overwatch League however with the start of the other franchised league - North America League of Legends this weekend.

Esports Performing Well On Twitter

TNL Take: It's been over 18 months since we predicted Twitter entering the esports space. Since then Twitter made a large push with ESL, Dreamhack and Intel Extreme Masters in March of last year.

How did they perform?

Very well actually according to data released by Twitter. Of the Top 10 live streamed events in 2017, 3 of them were esports related and considering the Top 2 were related to the US and UK elections; they could have ranked higher. With how much live streamed content Twitter broadcast, 3 in the Top 10 is impressive.

2017 Top Twitter Live Video Events (Photo: Twitter)

2017 Top Twitter Live Video Events (Photo: Twitter)

Twitter also quietly signed a deal last September with Riot Games to become Twitter Australia’s partner with League of Legends.  

The partnership saw 2 live streams for League of Origin and the Oceanic Premier League Grand Finals, as well as 10 live broadcasts via Periscope Producer. 

Why does esports work well on Twitter?

As expected, esports skews younger which works well with Twitter's audience consumption of sports events. Twitter has done deals with everyone from the NFL, MLB to the PGA and NASCAR.

The esports audience - from teams, pros to the viewers - use Twitter extensively. One of the biggest audience drivers to Twitch comes from Twitter; it's why you see those promoting a Twitch stream is live primarily use Twitter as their current social platform of choice.

For myself, Twitter chat is also an "easier" experience than Twitch chat. Based on the algorithm, I see tweets first from those I follow/follow me and those in my social graph. As the chat is built around tweets, it makes it easier to follow the conversation than a firehose of emotes. 

Laura Froelich, Twitter's Global Head of Sports Partnerships, told SportTechie a key stat last month: The Halo world championship was livestreamed on Twitter, Facebook and Twitch; with a total audience of 13 million - of which 10.2 million came from Twitter. 

Some further stats would provide greater insight but there's a clearly appetite for esports content on Twitter's platform.

What does 2018 have in store for Twitter?

Considering how much of Twitter's audience overlaps with esports, coupled with last year's live video performance, expect more partnerships for this year. While the majority of Twitter's esports broadcasts have not been exclusive to the platform - you may see one in 2018.