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Comment by mikepurvis | Hacker News Reader

I'm shocked it's not profitable. I've watched a person close to me spend $100/mo buying bits and get back nothing more than a few reaction emotes and jumpscares. Twitch's take on that is 50% isn't it? How on earth is it not profitable running a marketplace with those parameters and so many whales spending compulsively for a few seconds of attention from their favourite streamer?

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What nobody tells you is that the cost of hosting all that content, and streaming it live with little lag, is far more expensive than many would guess. Netflix can have boxes with cached content very near you, and your ISP even likes it, as the most streamed content tends to be the same for many users. On Twitch, it's not so easy: You really want everyone to be seeing things with minimal lag, so they can spend all that money buying bits.

Other streaming services, which can use all of the tricks to save bandwidth and compute, have eye-watering AWS costs. Even with their high take rates, I bet there's a lot of streamers that, once accounting for their share of infra costs, end up losing twitch money.

Roughly spoken, there are 5-10 million active streamers, but only 5-10k who even make a significant amount of money. So even while most of them neither see a relevant number of viewers, or any viewer at all, they still create a huge baseline of costs just by existing and streaming.

I've always thought similarly about Uber. All they're doing is providing the platform and don't have to supply cars, drivers, etc. They basically take a cut on all rides worldwide and just have to supply a map solution. It seems to me they should be pretty damn profitable.

I think it is opposite of Uber. Content is free. There is hordes of people willing to do it for very little.

But actually doing the hard lifting of moving lot of bytes for users is the expensive thing. Ordering taxi and then updating location every few seconds is pretty light load. And there is not too many users doing it at one time.

What hard lifting? Flat rate egress.

Twitch also transcodes live, etc. There's much more to streaming infra than just egress costs.

Any interaction attempt with big streamers is worthless - like holding up a letter-sized note to someone driving past you at 80 mph.

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