SETTING THE RECORD STRAIGHT (publ. 5/22/2014, page A4)
A story about the gaming website Twitch misspelled the name of Justin.tv co-founder Justin Kan and also the name of investment bank Digi-Capital.
Sports fans have ESPN. But if you’re part of a growing, younger audience that prefers Call of Duty, Minecraft or Super Mario, you’re probably turning to Twitch.
The little-known San Francisco startup has exploded in popularity over the past year, making it one of the most popular video-streaming sites in the United States, accounting for 44 percent of U.S. live-streaming online. That’s why it’s drawing interest from major Internet companies like Google, reported this week to be in talks to buy the Web property for $1 billion.
More than 45 million fans visit Twitch.tv each month, where they watch live webcasts of other people playing their favorite video games. The number has more than doubled over the past year, according to Twitch, which makes money in part from showing ads. Fans also chat and kibitz online, check out demonstrations of new games and buy T-shirts or other souvenirs.
“I definitely think this is where the future is going,” said Mike O’Brien, a 29-year-old Walnut Creek man who visits Twitch most days to watch players from around the world competing in League of Legends and other online games. He roots for his favorites and tries to learn from their moves.
“It’s like watching sports on your TV or your iPad, but you can watch for free,” instead of paying for a pricey cable package, O’Brien said. “And you can watch anytime.”
Google and Twitch representatives declined to comment this week after Variety reported the two companies were close to a deal. The Wall Street Journal confirmed the talks, but its sources cautioned no agreement has been reached.
Industry experts say Google has reasons to want Twitch, which reportedly has also drawn interest from Microsoft. The site’s audience is dwarfed by the billion-plus individuals who visit Google’s YouTube each month, but visitors stay on Twitch for hours, rather than watching a few minutes of clips and moving on.
“When it comes to engagement, these fans are maniacal,” said Mark Fisher, a vice president at Redwood City-based Qwilt, which sells networking technology and tracks streaming patterns. “It’s like you and I would think about the Super Bowl, but these people watch game-play for several hours a day.”
Twitch says its average visitor watches 106 minutes a day. This week it was showing ads for, among others, Charmin, the retail chain GameStop and the latest Universal Pictures comedy.
The site offers an “immersive experience for a specific, desirable audience that is becoming increasingly difficult for advertisers to reach on TV or elsewhere,” said Seth Bardelas at the Emeryville video ad firm TubeMogul.
That audience is under 35 and “heavily male,” Bardelas added, but young women are playing too, especially games with social components.
“The thing I love most about streaming is being able to interact immediately with people that are as passionate about gaming as I am,” said Kristen, a college student in British Columbia who plays Titanfall, World of Warcraft and other games on Twitch. In an email interview, she asked to withhold her last name because of fans who tried to learn too much about her.
As she shoots it out with animated opponents, other gamers can watch a live video stream of the scene that’s on her home screen. A small inset shows her facial reactions to the game, while she offers enthusiastic commentary and trades jokes with other players.
In less than a year, she’s drawn more than 70,000 followers, which helped her qualify in January as one of 6,000 Twitch “partners” who share the revenue from ads that play during webcasts, as well as fees that fans pay for premium features. It’s similar to YouTube, which shares ad revenue with popular video-makers.
While declining to reveal her income, Kristen said it’s enough to make her undecided about completing her fourth year of studies for an accounting degree. “Being able to play video games for a living is pretty great,” she said.
Twitch didn’t start with games: Its parent company was Justin.tv, launched in 2007 to carry a round-the-clock “life stream” from a webcam strapped to the forehead of founder Justin Kan. After several months, it evolved as a platform for users’ webcasts.
Three years ago, when co-founder Emmett Shear noticed people streaming images from video-games, the company spun off a gaming division named Twitch, for the lightning reactions some games require. The parent company has other divisions but renamed itself Twitch Interactive this year.
After partnering with numerous game developers, Twitch scored big last year when Sony and Microsoft both integrated the service into their PlayStation and Xbox consoles, making it easier for players to watch and stream.
YouTube and other sites offer live-streaming of special events and games. But Twitch has captured gamers’ loyalty, so much that Qwilt last month ranked it the fifth most popular video site in the United States — after such big names as Netflix, Google, Amazon and Hulu — and by far the most popular site for live streaming.
Analysts said Google could expand Twitch’s ad business and perhaps integrate mobile games for Android devices. Google is likely interested, added Tim Merel of the boutique investment bank Digi-Capital, because users’ loyalty and engagement on game-related video is “off the charts.”
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