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Twitch to Cut 500 Employees, About 35% of Staff

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

#191

Post by Analemma_ »

prox wrote: post #151
ctroein89 wrote: post #124

Earlier quoted context omitted.

Video is expensive, and streamers don’t like ads. Amazon has for years been saying that they think that Twitch is under monetized. In their minds, 20% of watch time could be ads, just like regular TV. Streamers don’t like ads: it kills the vibe when your audience gets a 2 minute timeout. So streamers aren’t running enough ad breaks, and try to support themselves via memberships, merch and other alternative monetizati…

It’s too bad they are so unimaginative when it comes to that. I mean at the very least they should hand controls to the streamer to run an ad: right now it’s the algorithm that does it. Also they should primarily look at other ways to monetize. Subs are still the best way, but not everyone has that kind of money. One other big problem is that there former heads just didn’t get streamers and they ran a lot of big ones…

> I mean at the very least they should hand controls to the streamer to run an ad: right now it’s the algorithm that does it.

They do: as a streamer, you've got a button to trigger an ad break at any time. But the streamers rarely push it, for the reasons already mentioned. Video ads pay so little that it's not worth it to streamers to annoy their audience that way, when direct monetization methods which depend on happy viewers (subscriptions, shout-outs, merch) are much more profitable to them.

There's a real problem of incentive misalignment between the streamers and the platform re: monetizing the stream by sticking ads in it, and I don't think it can be resolved; hence the layoffs.

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

#192

Post by eklitzke »

lchengify wrote: post #109
wnevets wrote: post #104

Earlier quoted context omitted.

How is it possible for them not to be profitable? Don't they take a 50% cut on subs?

I am supremely curious about this myself. My guess would be their ad spend is bad in comparison to the other networks (Google, Facebook, TikTok). Could be because their audience isn't worth as much, could be because the ad formats are bad, could be because they can't get advertisers. But unless they are serving ads from Google's network, my guess is they are 4th place at best. As noted on other threads, their streami…

I'm not an expert in this, but I don't think you'd be using similar hardware for video encoding and AI. Encoding uses a lot of compute, but it doesn't use much memory, whereas deep learning models (especially LLMs) use gobs of memory for both training and inference.

If I had to guess, I'd speculate they're doing encoding on their Graviton ARM CPUs: https://community.arm.com/arm-community-blogs/b/infrastructu...

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

#193

Post by tempestn »

lchengify wrote: post #92

Not mentioned in the article but definitely the elephant in the room: The rise of TikTok streaming [1] TikTok doesn't focus on gamers, but attention is finite. TikTok surpassed Twitch a while ago in revenue and it's accelerated since then. TikTok + Youtube (very profitable) makes Twitch at best a flat third place. Not a great business to be in when ZIRP ends. > Nine years after Amazon’s acquisition of the company, th…

The majority of Twitch's costs are going to be revenue to AWS; I wonder if they are still unprofitable if you include the AWS earnings on those services. Or in other words, if AWS hosts Twitch at cost, is it profitable then? If so, or if it's even close, the business would still have value to them. Maybe this layoff is intended to get there.

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

#194

Post by kenhwang »

EamonnMR wrote: post #189
golergka wrote: post #178

Earlier quoted context omitted.

What about all the pirate websites? There's hundreds of them all around the world, some supported with ads, others with subscriptions. How do they manage the bandwidth problems?

For them, content is free.

Sometimes bandwidth too if they have clever peer-to-peer setups.

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

#195

Post by hn_throwaway_99 »

tiffanyh wrote: post #76

Is Section 174 a driver for these layoffs? It now eliminates the ability for businesses to deduct their R&D expenditures as an expense. https://www.irs.gov/pub/irs-drop/rp-23-08.pdf

Section 174 usually is more of an issue for smaller/private companies. On the contrary, when I worked for a bigger company, we specifically tried to capitalize as much software development costs as possible, because it makes the company look more profitable. We (all of the software engineers) hated this because, for an internet-facing company that does continuous deployment, bucketing "new work" into CapEx vs "maintenance" into OpEx is nearly impossible when you're just adding new features to an existing product over time.

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

#196

Post by ayberk »

lchengify wrote: post #92

Not mentioned in the article but definitely the elephant in the room: The rise of TikTok streaming [1] TikTok doesn't focus on gamers, but attention is finite. TikTok surpassed Twitch a while ago in revenue and it's accelerated since then. TikTok + Youtube (very profitable) makes Twitch at best a flat third place. Not a great business to be in when ZIRP ends. > Nine years after Amazon’s acquisition of the company, th…

I'm not surprised a bit given how hostile Twitch has become to users. Completely irrelevant ads, ads playing at worst times (who the hell thought it'd be a good idea to show an ad before the actual stream??), apps abandoned(at least apple tv app). I literally stopped watching some streamers because of Twitch itself.

This is in-line with Amazon's departure from "customer obsession" overall. I can't wait for bigger tournaments to move to a better platform.

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

#197

Post by dathinab »

ctroein89 wrote: post #124
wnevets wrote: post #104

Earlier quoted context omitted.

How is it possible for them not to be profitable? Don't they take a 50% cut on subs?

Video is expensive, and streamers don’t like ads. Amazon has for years been saying that they think that Twitch is under monetized. In their minds, 20% of watch time could be ads, just like regular TV. Streamers don’t like ads: it kills the vibe when your audience gets a 2 minute timeout. So streamers aren’t running enough ad breaks, and try to support themselves via memberships, merch and other alternative monetizati…

As far as I can tell most streamers most times are, or would be, fine with having roughly 3min of ADs per hour. If it's at an predictable time they can slightly shift around to match up with their content. It's a amount of time perfect to standup, stretch drink, something and similar healthy things you really should do every hour. (You can setup twitch that way.)

But that's just 5% of ads.

And if you change that to 10% it is, as far as I can tell, already in a area where most would seriously consider leaving the platform for good and at 15% I think hardly any streamer would still be on twitch.

Lets be honest the only reason normal TV got away with 20% is because it had no alternatives, and often anyway just ran in the background.

But most funny because how few companies buy ADs on Twitch you might just end up seeing the same 3 ADs in a loop for 20 minuts. As far as I can tell at least outside of the US twitch is sometimes even incapable to run a 3-5min AD break properly due to the lack of bought ADs...

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

#198

Post by tempestn »

npalli wrote: post #175
lchengify wrote: post #92

Not mentioned in the article but definitely the elephant in the room: The rise of TikTok streaming [1] TikTok doesn't focus on gamers, but attention is finite. TikTok surpassed Twitch a while ago in revenue and it's accelerated since then. TikTok + Youtube (very profitable) makes Twitch at best a flat third place. Not a great business to be in when ZIRP ends. > Nine years after Amazon’s acquisition of the company, th…

>> Nine years after Amazon’s acquisition of the company, the business remains unprofitable, according to the people, who asked not to be identified discussing private information. >This ... is wild, I had no idea Twitch wasn't profitable Indeed very wild. Ironic too, considering the co-founder (Michael Siebel) is a managing director of YC and has advised hundreds of startups about creating businesses.

I wouldn't mind being advised by someone who created a business and sold it to Amazon for a billion dollars, lack of profitability notwithstanding.

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

#199

Post by Sohcahtoa82 »

wnevets wrote: post #161
TheRealPomax wrote: post #133

Earlier quoted context omitted.

Live streaming 1080p 60fps video to a channel with even just a few hundred viewers is a staggering amount of data that you need to push out. Multiply that by thousands of simultaneous streams, and the numbers don't look good. Because even though "Amazon" might be able to afford to send out all that data, "a subdivision owned by Amazon" still has to balance the budget and show that it can cover the cost for its slice…

> Live streaming 1080p 60fps video to a channel with even just a few hundred viewers I've been in streams with less than 100 viewers and seen hundreds of dollars in bits & gifted subs being spent in a single hype train. Are those really unprofitable for Twitch?

When someone buys a sub ($5-25 depending on tier), Twitch gets half the money.

Bits are a little more complicated. Donators have to buy bits ahead of time and then donate them. 100 bits is worth $1 to a streamer. But 100 bits will cost between $1.18 and $1.26 depending on how many bits you buy at once. Buying a larger block means paying a little less. (Side note: Once the streamer has received the bits, they can't be taken back, even if the credit card charge that bought the bits is reversed due to a fraud claim)

If a streamer with <100 viewers was getting hundreds of dollars in a single hype train, then either that streamer is very lucky and has a rich viewer that doesn't mind throwing around money, or I'd suspect something fishy is going on. ie, bits being bought with stolen credit cards, or the whole thing is a money laundering scheme.

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

#200

Post by bentcorner »

everforward wrote: post #176
kevinventullo wrote: post #153

Earlier quoted context omitted.

Why does “content is essentially free” apply to TikTok and not Twitch?

I don't really follow the space, so if I use the wrong amounts or titles, someone please correct me. For streamers with even a moderate following, they'll be in some status with Twitch to earn money off Twitch's ads. Don't recall if it's Affiliate or Partner or what, but the follower counts were surprisingly small to qualify for ad revenue. Twitch pays out $3.50 per 1k ad views to those creators, so Twitch is paying…

Doesn't this imply that Twitch needs to cut payouts then?

In the long run it seems like streaming as a career that is solely funded by the platform is dead. Streamers will need alternative sources of revenue (patreon, OF, etc) to keep things going.

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