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Twitch to Cut 500 Employees, About 35% of Staff

bloomberg.com

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Re: Twitch to Cut 500 Employees, About 35% of Staff

#11

Post by DivisionSol »

shrewduser wrote: post #9

Any idea why south korea is particularly cost prohibitive? i would assume twitch would be very keen to have a presence there.

Per: https://blog.twitch.tv/en/2023/12/05/an-update-on-twitch-in-...

  Ultimately, the cost to operate Twitch in Korea is prohibitively expensive and we have spent significant effort working to reduce these costs so that we could find a way for the Twitch business to remain in Korea. First, we experimented with a peer-to-peer model for source quality. Then, we adjusted source quality to a maximum of 720p. While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries. Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country.
Korean implements a "Sending Party Network Pays" tax.

Re: Twitch to Cut 500 Employees, About 35% of Staff

#12

Post by unexpected »

shrewduser wrote: post #9

Any idea why south korea is particularly cost prohibitive? i would assume twitch would be very keen to have a presence there.

not an expert, but have read that South Korea's ISP's get to charge Twitch for the bandwidth they consume (no net neutrality). RIP.

Re: Twitch to Cut 500 Employees, About 35% of Staff

#13

Post by lolinder »

shrewduser wrote: post #9

Any idea why south korea is particularly cost prohibitive? i would assume twitch would be very keen to have a presence there.

This was discussed here [0]. The tl;dr is that South Korea has the opposite of net neutrality: instead of charging the consumer for excess bandwidth, they charge the service providers. Streaming video is extremely bandwidth-intensive, so Twitch can't afford to keep streaming if they're charged for every GB.

[0] https://news.ycombinator.com/item?id=38539167

Re: Twitch to Cut 500 Employees, About 35% of Staff

#14

Post by Rebelgecko »

shrewduser wrote: post #9

Any idea why south korea is particularly cost prohibitive? i would assume twitch would be very keen to have a presence there.

https://carnegieendowment.org/2021/08/17/afterword-korea-s-c...

tl;dr is that SK has some big fees for data users that have a disproportionate impact on non-Korean companies

Re: Twitch to Cut 500 Employees, About 35% of Staff

#15

Post by jrockway »

SV_BubbleTime wrote: post #4

Hmm, so they’re starting to feel the effects of ZIRP on pause, good. But they’re also still in the mindset that they need to prevent boobs at all costs. Say what you want about the anything, ZIRP being on pause is about the greatest thing going right now. Unless you’re trying to buy a home I guess.

I doubt it matters. They wanted to be big in Korea. Local competitors got big instead. So they're leaving instead of spending more money. Interest rates could be 0% and you still wouldn't necessarily want to borrow money to bail out a sub-business that doesn't work.

Re: Twitch to Cut 500 Employees, About 35% of Staff

#16

Post by cloogshicer »

wilde wrote: post #7
IshanMi wrote: post #5

For companies like Twitch or Kick, how much do layoffs like these affect the actual streamers? (Like are the layoffs usually accompanied by them reducing the streamer's revenue share, or things like that?)

Right before this they chose to exit Korea. https://blog.twitch.tv/en/2023/12/05/an-update-on-twitch-in-...

Interesting. Is it true what they claim? Why is it so much more costly for them to operate in Korea?

Re: Twitch to Cut 500 Employees, About 35% of Staff

#17

Post by cableshaft »

kibwen wrote: post #10
nine_zeros wrote: post #6

Earlier quoted context omitted.

> The remaining employee's workloads are about to increase 50% Keep in mind that execs will get bonuses for cutting costs but the real workers have additional work without a raise. The downward spiral seems almost inevitable - attrition, drop in quality, services turn shitty, loss of revenue, repeat.

> attrition, drop in quality, services turn shitty, loss of revenue, repeat Execs are lauded for cutting costs, parasitically enrich themselves on the carcass of a once-productive business, jump ship to a new host before it all comes crashing down, repeat.

Some execs have already jumped ship. From the article:

"In the final months of 2023, several top executives announced their departures, including Twitch’s chief product officer, chief customer officer and chief content officer. Twitch also lost its chief revenue officer, who worked on Twitch from within Amazon’s Ads unit."

Re: Twitch to Cut 500 Employees, About 35% of Staff

#18

Post by dmoy »

cloogshicer wrote: post #16
wilde wrote: post #7

Earlier quoted context omitted.

Right before this they chose to exit Korea. https://blog.twitch.tv/en/2023/12/05/an-update-on-twitch-in-...

Interesting. Is it true what they claim? Why is it so much more costly for them to operate in Korea?

Korea changed the pricing model for network traffic to be "sending party pays". For something like OGN that has a literal TV channel it's less of an issue, but for something like twitch that is only Internet, and tons of video, it's more difficult.

Re: Twitch to Cut 500 Employees, About 35% of Staff

#19

Post by raz32dust »

I don't get it. From an outside perspective, it feels like they must be raking in the cash - they take a large cut from subscribers and the number of ads is crazy. Viewership growth seems good [1]. The product seems solid and well-built. The demand is clearly there. Serving live video is obviously expensive, but curious if that is really the biggest component (other than personnel). Would be cool if some industry insider could shed some light on what's wrong with this business.

[1] https://backlinko.com/twitch-users

Re: Twitch to Cut 500 Employees, About 35% of Staff

#20

Post by edgyquant »

kibwen wrote: post #10
nine_zeros wrote: post #6

Earlier quoted context omitted.

> The remaining employee's workloads are about to increase 50% Keep in mind that execs will get bonuses for cutting costs but the real workers have additional work without a raise. The downward spiral seems almost inevitable - attrition, drop in quality, services turn shitty, loss of revenue, repeat.

> attrition, drop in quality, services turn shitty, loss of revenue, repeat Execs are lauded for cutting costs, parasitically enrich themselves on the carcass of a once-productive business, jump ship to a new host before it all comes crashing down, repeat.

Sounds like a sweet gig, how do I land one?
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