Amazon’s Twitch is a sleeping giant of media

“Our view on Twitch is it’s terribly exciting,” said Colin Decker, general manager of Discovery Digital Networks. “We’re always interested in increasing audience share anywhere we think there’s opportunity, so it’s natural we’d push heavily into a space like Twitch with our personalities, who are passionate about gaming.”

Twitch has quietly become a massive media entity, attracting mainstream attention only after Amazon paid $970 million to acquire the company last August after Twitch’s talks with Google fell through. The company has a big community of viewers and broadcasters, who collectively command more total Internet bandwidth than Hulu or Facebook.

Yet Twitch routinely baffles average people and media executives alike, thanks to its gaming focus. It is easily the world’s largest live-streaming video platform; it just happens to cater to a community of avid gamers. Roping in established media brands like Discovery is essential for Twitch as it builds out its advertising business.

Streamers on Twitch typically share their game sessions as they’re playing live, with audiences in the thousands tuning in to watch their favorite streamers play and discuss those sessions. In addition to creating gaming news and animation videos, the hosts of Super Panic Frenzy will livestream their game sessions on Twitch in a “Let’s Play” format, joking and commenting as they play.

“Phil DeFranco’s fans love nothing more than to be able to continue their relationship with Phil DeFranco and play along with him live,” said Decker. “He’s a longtime pro and very accomplished about steering the audience through an experience with the games in a really fun, irreverent way.”

There’s a huge audience for that type of content: The world’s most-subscribed YouTuber, Felix “PewDiePie” Kjellberg, regularly makes “Let’s Play” videos. In addition to his 35 million YouTube subscribers, Kjellberg has a Twitch account with 472,000 followers. DeFranco, who has 3.4 million subscribers on his YouTube channel, has 245,000 Twitch followers and nearly 40 million total views on the live-streaming platform.

“One of the more interesting things about Twitch is, in an era where we’re talking about more and more video on demand, there is still a very compelling argument for linear video or appointment viewing,” said Decker. “At the end of the day, nothing beats great content at a great time of day when you can tune in and feel like you’re being part of something.”

In aggregate, Twitch attracted 4.1 million unique video viewers to its site on U.S. desktops alone last month, according to comScore data. Globally, across all its platforms, Twitch claims to reach 100 million visitors a month. Roughly 10,000 of its 1.5 million broadcasters are part of the Twitch partner program, which enables channels to monetize their audience with ads, subscriptions and merchandise sales, according to a Twitch spokesperson. And in contrast with other video platforms, Twitch partners can control the placement and frequency of the ads during their broadcasts.

“Discovery Networks is smart to recognize the potential of Twitch as a content platform,” said Paul Verna, senior analyst at research firm eMarketer. “Game streams on Twitch and similar venues attract extremely engaged users. Those users are overwhelmingly young and male, so the audience profile doesn’t work for all brands, but to the extent that Discovery wants to tap into that demographic cohort, Twitch is a great place to do it.”

While some marketers have been skittish about embracing Twitch — live, user-generated content can scare away some brands — some movie advertisers, tech brands and, naturally, games companies have warmed up to the platform. Twitch has struck advertising deals with Sony, Netflix, Samsung and T-Mobile, among others. While Twitch and Discovery declined to comment on the revenue split Twitch offers it partner channels, Discovery has been happy with the ad rates so far.

“We’re definitely pleased with [the CPMs] we’re seeing on platforms like Twitch,” said Decker. “We certainly wouldn’t be there if it wasn’t a compelling opportunity.”