One of the main findings of our recently released 1H 2014 Global Internet Phenomena Report was the fact that Twitch was gaining momentum on networks globally. Less than a week after our publication, rumors are now swirling that Google is considering buying the service for roughly $1 billion. Coincidence? Probably. But out of curiosity does anyone know what the standard finder’s fee for a $1B acquisition is?…Asking for a friend.
So what is Twitch? It’s one of those applications that seems crazy to people that don’t use it, and is adored by people that do. Twitch is a live streaming service that allows users to watch other people play video games. I personally have no interest for the service, but after reading John Gruber’s thoughts on the acquisition it kind of clicked for me. For some people baseball or football is their game of choice. For others it may be League of Legend or Starcraft, but no matter what people like to spend time watching, the best of the best compete.
So why might Google want to buy Twitch? To start off, on many fixed networks around the globe, Twitch is now a top-15 application in terms of bandwidth consumption. Looking at just US networks, Twitch now generates more traffic than HBOGO. Sure HBOGO is a paid service, but it is a premium brand, while Twitch is still primarily user-generated content.
Another reason for the purchase may have to do with how engaged Twitch users are. Monthly subscriber adoption for the service typically varied from 1-3% depending on the exact network examined. The real kicker though is how those users that do stream, stream for a long time. Below is a chart from one fixed network that shows the average Twitch streaming session is almost 30 minutes long…and trending upwards.
In our latest Global Internet Phenomena Report we also discussed in detail the impact live streaming of sporting events like the Olympic and World Cup have on networks and the value they provide to media and Internet companies. If there truly is a new generation of users who value watching video games just as much as some value live sports, Twitch may very well be the “ESPN of the video game industry” as some pundits have predicted. Combine that enthusiasm with the potential backing of a major player like Google it may not be too long before we see Twitch cracking Sandvine’s top-10 charts – and that would be worth shouting about.