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Comment by AraceliHarker | Hacker News Reader

It's not just Korea that Twitch isn't profitable in; the company as a whole is not profitable.

Considering the high payouts to streamers, the lack of benefits for premium members, the long streaming hours of games which incurs server costs and makes it difficult to display ads, I don't think their business model is sustainable in the long run.

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Twitch was profitable at some point in time according to interviews with the founders. There are more revenue streams since then, so I am guessing overalls it would be profitable.

Their CEO was on his own channel recently talking about what I think were layoffs and how they weren't currently profitable.

> Considering the high payouts to streamers, the lack of benefits for premium members, the long streaming hours of games which incurs server costs and makes it difficult to display ads, I don't think their business model is sustainable in the long run.

I don't game and I don't use twitch, but...

> the high payouts to streamers

This worked really well on Youtube and other platforms.

> the lack of benefits for premium members

If people are still subscribing without many benefits imagine what will happen if they introduce more? That's worked well for Amazon in other areas (eg Prime)

> long streaming hours of games which incurs server costs

I mean there is some server cost but this seems very manageable. I've done a bunch of video streaming work and the server requirements aren't high if you know what you are doing. Bandwith is hard sometimes but I suspect Amazon can optimize their bandwidth deals as well as anyone.

> makes it difficult to display ads

This seems wrong. The whole broadcast TV model is built around 24/7 ads.

> I don't think their business model is sustainable in the long run.

I take the opposing view. I think Twitch has the potential to be one of the biggest sources of revenue growth at Amazon.

Look how well YouTube has done for Google.

having an adbreak right when the most important play of the game is made would really be annoying. It's not like broadcast tv where there are things like time slots and designated ad spots.

That's why Twitch gives you tons of tools to schedule ads and manually trigger them at less disruptive times. It requires the streamer to care about not disrupting their stream enough to plan ahead and preemptively run ads and not just hope they auto-run at the right time.

This very seldom happens to actual competitive events (which often have special deals that require them to run less ads), and most bigger streamers have worked out running ads between games.

Care to share the clever way? I've put on a number of small-scale (high triple digit/low four digit concurrent viewers) streamed events and have always gotten pretty slammed by both cpu and transfer using nginx-rtmp published via hls.

Delivering the video isn't where I think most of the costs are. They've a few times its the free transcode service they offer to just about any one who streams on the platform is where much of their costs are.

> and makes it difficult to display ads

What do you mean by this?

Probably longer intervals between streamers showing ads, compared to TV?

I know that if streamers showed ads every 10 minutes and I was forced to watch them, I would just not watch Twitch at all.

When streamers don't show ads within some interval of time, twitch will automatically play ads to compensate, so I don't think that's what was meant. Twitch has full control of this interval.

The person you're responding to isn't saying that Twitch lacks the ability. They are saying that increasing the occurrence would cause people to get annoyed and leave, resulting in no ads being viewed.

I get that at some point twitch or even amazon.com can't control prices of ads because advertisers will pay only what they think those spots are worth but on the flip side, I think it is worth noting the costs of running twitch have probably massively increased since their justin.tv days. I remember reading in the justin.tv days, they were trying to convince everyone that they're sustainable and that one ad an hour (not one ad roll with multiple ads, just one ad) would MORE than cover all of Justin tv costs. I'm sure the rates have collapsed since then AND the costs have gone up. I wouldn't mind 480p back when the best quality I could watch was from some guy's webcam at 720p but it is a different matter when I want to watch 1080p60 screen share. 480p is worthless for watching video games or coding streams. Probably obvious but just wanted to say out loud that the costs have likely gone up.

Twitch ads sucks. Microphone is muted and we have to rely on small screen above comment section. Anti pattern like this is reason why I don't watch twitch anymore.

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