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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

#91

Earlier quoted context omitted.

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

Wouldn't the work around then be for Twitch to do a 49-51 split with a South Korean ISP to get favortism? These entrenchment laws are there to favor the big ISPs in SK, it would stand to reason that they would be happy to make money in such an arrangement, and Twitch gets a secondary downstream benefits that they can reap.

There’s a good chance someone already had this idea, explored it, and found a reason why it can’t work.

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

#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, 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. If you're pushing that much live video you really need to find a business model that works, especially when Youtube arguably does it better. Kind of surprised it took this long to start to wind it down.

[1] https://appfigures.com/resources/insights/20210924/amp?f=4

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

#93

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 ins…

1. I think the infrastructure costs is probably more than you think. It’s probably the single biggest line item. They have to encode every video stream to multiple formats, and then deliver it globally. 2. The core product is pretty mature. 3. Elon raised the bar for how large of a staff cut you can make. 4. Most of their revenue is split with content creators. 5. They lost their CEO about a year ago. New guy has to…

Twitch just announced a partnership with Nvidia at CES to allow streamers to encode multiple versions of their stream on their own PC and push them to Twitch. Previously, only partner/affiliate streams had transcoded streams at various levels of quality. That might cut back on the amount of transcoding Twitch has to do server side…

They also said they’ll be supporting AV1 and NVENC codecs soon which can help reduce bandwidth costs. They currently only support h264.

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

#94

Earlier quoted context omitted.

ask sam altman what he did - I still can't figure out how he went from "startup that went nowhere" to "hand out other people's money at YC until paulg fires him" to "CEO of openai".

Something called hard work?

Bless you my sweet summer child.

(OP, in some of the longform pieces written since The Event they touch on this transition being a mystery too, but I think it's a tale as old as time: earnest, smile on their face, performs work and passion, team player, right place right time and asked.)

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

#95
post #50

Earlier quoted context omitted.

I think viewership peaked in 2021 and has been flat or down since then. [1][2][3] I know some of my friends watch Twitch less because the ad policy became toxic. [1] https://twitchtracker.com/statistics [2] https://sullygnome.com/longtermstats [3] https://streamscharts.com/overview#:~:text=Twitch%20growth%2...

What happened to the ad policy?

Twitch will run preroll ads on your stream unless you elect to run at least 3 minutes of ads per hour. These preroll ads have a huge effect on viewership because new viewers who tune in to an immediate ad will typically just leave. So, these "elective" ads are not very optional. But, this is a lose-lose situation, because these elective ads are very disruptive to viewers too. They are often implemented as a 90 second ad every 30 minutes. If this doesn't sound bad, remember that this is live content. If you're watching an ad, you're missing out on content, and when the ad is over, there's no way to wind it back to see what you missed.

Besides the ad policies, the Twitch revenue split for subscriptions has been changing over time. Historically it defaulted to 50/50 and most streamers of any decent size audience would have a contract to be granted 70/30 split. However, the 70/30 split has been phased out and today nearly no streamer on the platform has it anymore. This is a huge difference for streamers. The CEO of Twitch was handing out 70/30 split "coupons" as a prize in a live event[1], it's a big deal.

Besides subscription revenue, Twitch is constantly battling to reduce other sources of income, like branded sponsorships. Last year they announced significant restrictions on streamers displaying branded content with sponsors.[2] While these rules were soon reverted, it suggests Twitch is in a fight for its life. All indications point that this is going to continue to be a problem in the future. In short, streamers need to deal with the ads because their revenue from other sources is constantly at threat.

1: https://www.dexerto.com/entertainment/twitch-ceo-surprises-s...

2: https://www.theverge.com/2023/6/7/23752437/twitch-new-ad-rul...

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

#96
post #56
post #39

Earlier quoted context omitted.

What's "late-stage capitalism"?

Its modern jargon that refers to multinational, corporate focused, globalized markets. Its gone through a few definitions over the last century, but most recently its been used by the anti-work movement to deride a culture that has all but abandoned individual people in favor of the ultra wealthy. A culture where greed and money are the only virtues and all choices are driven by the bottom line. Jokes on them, that's…

This isn't really correct.

While yes, so called "anti-work"[0] movement (or if you're from the early 2000s, the occupy wall street movement would be of similar philosphical values, for example) uses this term rather often, it derives from the work of the Ernest Mandel[1][2] based on his work in which he used the term to describe the latter stages of capitalism post WWII as he saw it, and how it inevitably would end up in deep inequality and power concentration, to paraphrase the thesis.

As far as "its always been that way" goes, I can't speak for all of the past, but there are clear models in the present that show it doesn't have to be that way. Norway & Sweden come to mind, for example.

[0]: Orewellian term at its best. The movement isn't actually anti work, much like luddites weren't anti technology. This label is attached by and large to people who are centered around ideas related to equitable wealth distribution in society & more worker rights, namely. They don't actually profess to be against work, as far as the movement goes. Individuals may vary. Never the less, its clear doublespeak.

[1]: Notably, a socialist. Wrote the book Late Capitalism (https://www.goodreads.com/en/book/show/931838)

[2]: The term was then popularized by Fredic Jameson, another socialist, though his critique was centered around the culture of post modernism and capitalism intersections: https://jacobin.com/2023/04/ernest-mandel-marixism-late-capi...

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

#97

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 ins…

1. I think the infrastructure costs is probably more than you think. It’s probably the single biggest line item. They have to encode every video stream to multiple formats, and then deliver it globally. 2. The core product is pretty mature. 3. Elon raised the bar for how large of a staff cut you can make. 4. Most of their revenue is split with content creators. 5. They lost their CEO about a year ago. New guy has to…

>3. Elon raised the bar for how large of a staff cut you can make.

Did he? Their revenue is way down, and they've had a lot of downtime. Unlike Netflix, they make most of their money on ads, not subscriptions, so more downtime is more money lost.

They're also on a huge hiring spree right now. Go look at how many roles they're hiring for. I don't think they'd be hiring that much if everything was fine and dandy.

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

#99
post #58

Earlier quoted context omitted.

They’ll probably give them all chatGPT subscriptions and ask them to deal with it. If that goes well they’ll probably cut the staff in half again.

Not an engineer so I'm curious... Is this actually a thing that's happening in Eng orgs these days?

If you’re an eng and not using ChatGPT/copilot you’re going to get left behind pretty soon.

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

#100

Earlier quoted context omitted.

You answered your own question. Twitch is solid and well-built. It doesn't need an army of well-paid engineers to maintain it and isn't seeing a great ROI on new features. Some companies repurpose all, many or some engineers when the spreadsheet says to, others fire them wholesale.

Not many people realise this. Engineers build stuff. When your product is feature complete, you can get rid of most of them. Big tech companies keeping tens of thousands of engineers on staff despite their core product not seeing substantial changes for years are just wasting money.

When you're at scale, a .5% increase in performance or decrease in utilization pays for a team of engineers. Being able to have one less SaaS product bill as well. Maybe Twitch isn't at that scale, but some companies certainly are.
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