It’s July 2019. Covid-19 is just a glint in a raccoon dog’s eye. A major announcement is coming out of the West-coast headquarters of Microsoft: Tyler Blevins (aka Ninja), the most prominent streamer in the world, will be leaving Amazon-owned Twitch in order to join Microsoft’s rival platform Mixer.
Mixer, at that point, had been around for a few years, an unloved outpost of the Microsoft empire. But as it had lain neglected, Twitch had grown from a fringe internet domain to one of the most important cogs in a media empire. It became inevitable that Twitch’s monopolistic stranglehold on live streaming would be challenged, and so it came to pass. Microsoft rebooted Mixer, led by Blevins, while YouTube signed NickEh30 and championed its own live streaming functionality. At the time, I wrote this piece about what we might all learn from gaming’s “exclusivity wars”.
Fast-forward a few years, and Mixer is dead. Its streamers, some signed to exclusivity contracts, have returned to Twitch or moved over to YouTube. Mixer itself signed a redirect agreement with Facebook Gaming, though nobody in 2023 is accidentally visiting Mixer. So why, given all that, am I talking about Mixer today, rather than Twitch, which has proven resilient in the face of staggering investment to its challengers?
Well, right now we’re seeing the birth of Mixer 2.0 Kick, a lavishly well-funded new streaming enterprise, intended to kick Twitch in the nuts. According to Wikipedia, the founders of Kick are not currently known (cue: alarm bells), but major capital access has come from Stake.com co-founders Bijan Tehrani and Ed Craven. Stake.com is an online casino which, unlike its traditional competitors, deals in crypocurrency rather than “traditional currencies”. They have previously done sponsorship deals with a large number of sporting franchises, including UFC, football, Formula 2 and boxing. So the move into streaming (which is still dominated by gaming and esports) isn’t exactly a surprising one. The opportunities for synergy between the two services will be hugely (even if they’re a regulatory nightmare).
All of that would be relatively uninteresting (Stake.com might be a profitable business, but it’s no Microsoft, no Google and certainly no Amazon) if it hadn’t been for the fact that Kick has reportedly spent $100m to sign Félix Lengyel (aka xQc) to the service on a two-year, non-exclusive (yes, you read that right) agreement. Lengyel’s channel on Twitch is currently the most subscribed to individual on the service. At the same time, they’ve also announced the signing of Amouranth, the most-watched female streamer on Twitch, though the details of that deal haven’t been disclosed.
Now, Lengyel might have the option to stream on Twitch and YouTube during his Kick period, but he may not want to. The sweetener that Kick is offering all its streamers (yes: all its streamers) is 95% of revenue, significantly better terms than Twitch’s 50:50 split. Some of Twitch’s bigger streamers (presumably including xQc and Amouranth) have been offered a 70:30 revenue split, but that’s still a significant margin away from the terms offered by Kick.
The big question circulating in the industry now is how exactly Kick can afford i) such generous revenue terms, and ii) to pay Lengyel $100m over two years. The answer to the former question seems obvious: they can’t. It’s a good rule to assume that any business owned and operated by Amazon will run their margins at a fairly optimised level: low enough to kill competitors, high enough to ensure long term profitability. The difference between a 50:50 split and a 95:5 split is significant enough for me to assume there’s zero chance of that being sustainable over the years.
Of course, those terms don’t have to be sustainable over the years. What Kick needs is to migrate enough streamers and, therefore, enough viewers, to give itself a market share. At that point, let’s say it’s 12 to 18 months down the line, the 95:5 split might continue for premium streamers, but you can bet the rest of its streamerbase will be offered terms closer to 50:50. But even if they were 55:45, that would still offer the average streamer an edge on the terms offered by Twitch. If they have enough capital to keep the engine running, the lights on, then they can, for a while, continue to drink Twitch’s milkshake (not least because Twitch, as both an Amazon subsidiary and a real business, cannot afford to change its terms to chase the latest flirt on the block).
The second question – on the funding for mega deals like xQc and Amouranth – is trickier. It may simply be that this is the significant spend that a consortium are willing to make in order to try and squeeze their way into a very consolidated market. Certainly, if you were putting together a significant new streaming platform, you’d need to make some content acquisitions. To do otherwise would be like Netflix launching without anything in its library. Whether that $100m is in cash seems less clear to me – they may be offering their premier tier of streams some stock options and/or, judging by Strike.com’s business model, some of the funds in cryptocurrency. If anything has been proven over the past couple of years, it’s that hundreds of millions of dollars worth of cryptocurrency do not necessarily mean the same thing as hundreds of millions of dollars worth of fiat currency.
At $100m, this deal constitutes the largest deal ever offered to a streamer; essentially double the $50m offered by Mixer to Ninja back in 2019. There’s also a suggestion been raised that streamers like Trainwreckstv and BruceDropEmOff are among the co-owners of the platform (this is a model not unlike the one used in US sports, where stars own franchises – for example, Michael Jordan owning the Charlotte Hornets and David Beckham owning Inter Miami). This may well be why the terms for attached streamers look so generous compared to those of services run by, you know, business people.
It's hard to see how Kick can succeed in achieving what Microsoft failed at, but perhaps a streamer-led approach is the way forward. Or perhaps it will end in tears and legal recriminations. What’s clear is that the battle for control of live streaming is far from over.
As a digital medium, live video streaming is almost perfect. It allows for almost every commercial product designed: programmatic or native advertising, subscriptions, value-based models. And while Twitch has been market dominant for a long time, it has also demonstrably failed to break out of a clear (and debilitating) association with the world of gaming. Gaming is big business, don’t get me wrong (it’s also the most routinely undervalued form of media) but it holds a tricky position in the public consciousness. Edgy, uncommercial, potentially libellous: few companies have been willing to take multi-million dollar bets on video games streaming. Just look at xQc’s move to Kick, which was immediately followed by an article in GameRant about his issues with DCMA copyright violations on the new platform.
Other streamers, meanwhile, have fallen foul of using offensive language and racial slurs on stream (if I were Kick, I’d be taking out some form of slur insurance). And this week Tfue, one of the biggest streamers on Twitch over the past half-decade, announced his “retirement”, citing burnout from the pressures of streaming for several hours a day (the figure considered necessary to maintain a consistently profitable operation). All in all, the market still seems immature.
YouTube has made in-roads in this department, encouraging more TV broadcasters to utilise the service as a streaming platform. Just yesterday, for example, I appeared live on TalkTV (to discuss Harry and Meghan’s Spotify deal imploding), a station that is simultaneously broadcast on YouTube. Few people probably watched that, but far more would’ve tuned in to BT Sport’s live-streaming the Champions’ League final on YouTube. The problem with YouTube’s model is the oldest one in the internet book: users have always expected YouTube to be free, and so retrofitting a subscription or value-based system at this point is very hard. Twitch will always have the upper hand there; its userbase natively assume that money will be transacted.
But Twitch is still a video games platform, and it knows it. Kick seems primarily concerned with challenging that hegemony – hence signing xQc and Amouranth rather than, say, Ben Shapiro and Owen Jones – but that doesn’t mean that a breakup of the monopoly won’t precipitate the emergence of other platforms. My suspicion is that Kick doesn’t have the longterm clout or model to challenge an Amazon or Google owned product, but sometimes the role of a disrupter is simply to clear space for another, insurgent, challenger.
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