Twitch, the live-streaming platform acquired by Amazon 10 years ago for $1 billion, is going through hard times. Despite $2 billion in annual revenue, the service is operating at a loss. Internal problems, increased competition, and doubts about the viability of the live-streaming format itself are calling into question Twitch’s future, writes Business Insider.
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Amazon is feeling the disappointment of its investment in streaming platform Twitch, which it acquired in 2014. Twitch was initially expected to become “the next YouTube or Instagram✴” and a fast-growing service that would see a dramatic increase in popularity and profitability after joining a major tech platform. However, those hopes have not materialized. Twitch is losing money and its user base growth appears to have stalled.
Trying to understand the issue, Business Insider, citing WSJ notes that despite the fact that Amazon has cut a third of Twitch’s employees this year, the service’s problems may be related not only to internal factors, but also to the specifics of the streaming market as a whole, since it remains unclear how big the audience is that is willing to regularly watch live video game broadcasts and other content on Twitch.
At the same time, the streaming industry itself continues to evolve. Content creators now use various platforms, including TikTok and YouTube, which offer more favorable monetization terms. For example, YouTube has simplified the process of cutting live broadcasts into short clips that are easier to monetize.
Despite Twitch’s technological advantage in streaming, the platform has failed to take full advantage of its growing popularity. According to experts, Twitch is still perceived as “YouTube’s little brother” and has failed to carve out a meaningful place in modern digital culture.
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