Twitch.TV, the YouTube for Real-Time Game Streaming

Twitch is well known to tens of millions of gamers, but still somewhat under the radar for everyone else. So what is the company, how popular is it, and why might YouTube want to buy it?

What is Twitch? How did it start out?

It’s essentially the YouTube for live gaming: people broadcast themselves playing and/or talking about games while other people watch them (either live or via archived footage) while chatting about it.

Twitch was a spin-off from Justin.tv (founded by Justin Kan back in 2005), one of the first big livestreaming-video sites online. It launched in June 2011 billed as “the largest competitive video gaming broadcast network in the world”, with an emphasis on e-sports (competitive gaming). Since then, the company has raised $35m in funding from various venture capital firms in two rounds.

Twitch has received significant investments of venture capital, Justin.tv had raised $7 million by the time of re-branding after which twitch.tv has gone on to raise an additional $15 million and $20 million in 2012 and 2013 respectively. “The investments from Thrive Capital, West Summit Capital, and Take-Two Interactive, ensures we can more effectively grow and tap into new markets,” said Kevin Lin, COO of Twitch.

Is it popular?

Very. In 2013, Twitch more than doubled its monthly audience from 20m people at the end of 2012 to 45m at the end of 2013. Those viewers were watching 106 minutes a day on average, with 6m videos broadcast on the site every month by 900,000 unique broadcasters.

In February 2014, a study by internet infrastructure company Deep Field claimed that in primetime hours in the US, Twitch was the fourth largest source of network traffic, behind only Netflix, Google and Apple.

Meanwhile, last October's League of Legends Season 3 World Championship event attracted 32m viewers in a single day, with 8.5m watching simultaneously at its peak.

Why is YouTube interested?

YouTube and Twitch are both benefiting from the same trend: people going online to watch other people playing games – an artform that traditional television has usually struggled (in the west, at least) to make compelling viewing.

Gaming channels like PewDiePie, Stampy, The Diamond Minecart, Vanoss Gaming, Yogscast, Sky Does Minecraft and others are hugely popular on YouTube: PewDiePie is the most popular channe on the service with 26.4m subscribers, and nearly 300m video views in April alone.

Gaming is thus one of YouTube's biggest genres alongside music. Buying Twitch would shore up that status, making YouTube the number one platform for e-sports as well as "Let's Play" videos. Oh, and the huge and engaged audience to show ads to is obviously part of the appeal too.

The two companies also have similar approaches: for example, YouTube's partner program for its creators is matched by Twitch's Twitch Partner Program, which had 5,100 members at the end of 2013.

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