This week we’re hitting pause on The Roundup for the first time ever, and instead sharing something we feel is more important. The Roundup will return next week with the very latest happenings in the live-streaming industry.
In the ensuing months, Facebook Gaming and YouTube would also dive headfirst into a battle that Mixer touched off. Ever since, top talent from virtually every platform has swapped one uniform for another, signing on in hopes of bigger payouts and the promise of huge upside further down the road.
In August of 2019, Twitch Partner and world-renowned celebrity live-streamer Ninja publicly announced he was packing up and taking his fanbase to Mixer. This came as a shock to the community and the live-streaming industry, as many considered Ninja to be a staple of Twitch’s ever-growing roster of massively popular content creators. While Ninja’s move wasn’t the first, it effectively set into motion a series of events that escalated into what’s been referred to as the “streamer wars”.
It was later revealed that Ninja may have cost Mixer upwards of $30M to sign on exclusively with the platform - a number that was previously unimaginable in this industry. And while the arrangements with Ninja and Shroud were unprecedented, the message sent to Twitch was clear - its most valuable assets were no longer safe.
Here it is June, approaching one year since Ninja departed, and Twitch has made several moves in 2020 to shore up a once leaky ship. It’s now commonplace every couple of weeks to see that Twitch, YouTube, Mixer, and Facebook Gaming have signed exclusive agreements with streamers currently on their platforms. News of poaching is growing increasingly rare. So is it possible the streaming platforms have engaged in a ceasefire, and are instead taking inventory of the incredible talent they already possess? Perhaps.
With the going rate for top tier talent in the $20M - $30M range, there’s only so many acquisitions Twitch and the others can make at that level. Looking inward, it’s undoubtedly less expensive to focus on the creators already toiling away under their domain and ensure some form of status quo is maintained. A fine example of the timeless adage “the best offense is a good defence”. But is Twitch looking deeply enough?
On episode four of The StreamKick Podcast, I posed the question, What if Twitch dedicated some of its talent-acquisition dollars instead to developing up-and-coming talent? Simply put, rather than invest $5 - $10M into locking up existing upper tier talent, why not allocate a small fraction of that budget towards aiding in the development of aspiring streamers? Twitch has been in the game long enough to have at least a rough idea what levers to pull to take a streamer from, say, a couple hundred viewers, to maybe closer to five-hundred.
For example, suppose they set aside $100K to pay ten streamers each for one year. That’s $1M right there and that effectively becomes their salary. Not bad for someone who’s likely streaming and working a full-time job that’s paying nowhere near $100K annually. This would enable them to quit their “real” job and focus 100% on streaming - a dream most will never realize but many would jump at if given the opportunity. Now those eight hours in the office or wherever are solely dedicated to content creation and leveling up their channels.
With living expenses covered and mental health improving, Twitch could then focus on developing the talent in this new program. For our hypothetical scenario let’s allocate $50K per content creator in addition to their salaries, earmarked for things like equipment upgrades and various coaching opportunities. $50K is probably too generous but it makes the point. Even at this inflated figure, we’re only at $1.5M all-in. The question becomes:
Ten streamers, one year - can Twitch produce a “hit”?
With all of the incredible talent we’ve seen on Twitch alone using StreamKick, it’s a statistical impossibility that there aren’t hundreds, maybe even thousands of content creators that have what it takes to explode in popularity. The issue is that the system is actively working against them. The grind itself is hard enough, but they’re grinding in a system that is designed to allow only a handful to operate at the top. This isn’t meant to diminish what others have accomplished, but rather to highlight an opportunity to expose more talented individuals to an audience that craves their content.
So why hasn’t Twitch done this yet? I have a couple of theories. First, it’s entirely possible Twitch hasn’t landed on a formula for identifying the ideal candidates for such a program. This isn’t an easy thing to do, but Twitch has the time, data, money and other resources to dedicate to the effort. So while it may be a daunting task with an uncertain payoff, if anyone is equipped to do it, it’s Twitch.
Second, they haven’t done this yet because quite frankly the other way is easier. It’s practically sure money. While measuring and identifying the next top star is everything we just outlined, investing to keep current talent performing at optimal levels is, at the very least, a predictable outcome for these streaming platforms. Mixer can look at any one partner, map the revenue that a streamer generates in a 2 - 3 year window, and invest accordingly. It’s like knowing an investment will pay you a fixed number in a few years, so just make sure you’re not investing any more than that to secure it and you’re all set!
All that said, this is where Twitch, Mixer, YouTube, and even Facebook can look beyond cold metrics like these and see there’s a genuine opportunity to change people’s lives for the better. If done right, even if they don’t become the next live-streaming superstar, their channels are sure to grow and they’re certain to develop as individuals, maybe even eventually finding success more organically as they continue to hone and perfect their craft. Along the way consider all of the viewers that will drop in, even if only momentarily, to enjoy a killstreak, participate in a sub train, hear a catchy tune (copyright free, of course), or follow and return another day to begin integrating with the streamer’s community.
After all, it’s all about community. The streamers at the top have worked tirelessly to build and nurture their communities, and it’s because of those communities they’re now able to live the lives they do. The live-streaming platforms have the means to create opportunities just like these. So rather than continue to erect walled gardens, why not look inward just a bit more closely at what’s already there, and maybe focus on that corner where things struggle to grow.
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