Tom Waterhouse from Waterhouse VC decided to research this topic and compare two of the most popular streamers. Twitch was launched in 2011, but its biggest growth was recorded after Amazon bought the platform for $970 million in 2014. At the time, there were very few streamers in the whole US market.
There awaited various thrilling features, including many tutorials and chat rooms hosted by famous gamers from all over the world. The money comes from both ads and premium subscriptions, as well as a few merchandise sales, and the platform and the streamer used to split the subscription revenue 50/50 until June when it changed to 70/30 for the streamer.
Among other things, Twitch offers Bits – it's an internal currency that users can give to steamers as a sign of support, and that revenue is also split. However, according to the source, the streamers believe they're underpaid. In 2021, some information about the network was leaked, and according to that, only 0.01% of streamers were paid more than the minimum wage. This is the main reason for the different split percentages, along with increased competition from the new platforms.
Kick – a serious threat
Another major platform is Kick, which is relatively new, with the launch in January 2023. However, it rapidly became popular among streamers and viewers. Streamers love it because of the 95/5 split, along with keeping all the tips to themselves.
Kick also allows gambling. After the 2022 scandal, when Twitch borrowed money from creators to pretend to fund gambling expenses, Twitch decided to ban most of the popular gambling streaming, starting in October last year.
Back then, the company claimed: “We'll be making a policy update on 18 October to prohibit streaming of gambling sites that include slots, roulette, or dice games that aren't licensed either in the US or other jurisdictions that provide sufficient consumer protection.”
On Kick, however, gambling content is beyond popular, which has drawn streamers to the platform. Since fans keep finding new ways to gamble, the ban didn't help – many of them simply transferred to Kick, which likely won't ban gambling content from the platform since its popularity keeps growing.
In January, the platform had 9.000 active channels, and in April, that number increased to 67,000. Also, there were 12.8 million viewing hours in January, and that number increased to 51.8 million until April. It is still only 2.8% of Twitch's hours, but the company keeps growing, and gambling streaming helps a lot.
Will Twitch be replaced by Kick? It's early to say for sure, but the games have just begun.
Source: “Waterhouse VC: Twitching into gear”. iGaming Business. August 22, 2023
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