Broadband and Gaming

I recently saw an interesting statistic that showed that the most popular worldwide video content is gaming. The worldwide gaming video content industry has more than 665 million viewers which makes it bigger than HBO, Netflix, ESPN and Hulu combined. This is a segment of the video industry that I was only peripherally aware of, which I suspect is true for many of you as well.

The GVC (Gaming Video Content) industry is distinct from the on-line playing of games. The GVC content consists of watching others play games along with content that talks about gaming. The industry is estimated to generate $4.6 billion in revenues in 2017. One third of that will come from subscriptions to GVC content along with other direct consumer spending. The rest comes from advertising. There is a whole industry that has sprung up around the GVC content including big conventions and merchandise.

While you can’t characterize such a large group of people, the gamers and GVC viewers are often what you might think of as tech-savvy. In the US the average GVC viewer is around 30, has more education that average and makes a higher than average income of around $58,000. And while you might expect the viewers of GVC content to be largely male a surprising 46% of GVC viewers are female.

Around the world there are numerous video platforms that have been created for gaming content. In the US and Europe the biggest content provider is Twitch. This is a platform that was originally known as Justin.tv. The platform was created in 2007 by Justin Kan and Emmett Shear. The platform allowed users to post live video streams that could be watched by anybody else on the platform. The platform was often used to show pirated live sports feeds, but over time the majority of the content centered around gaming.

Justin.tv was a large content generator and in 2013 – before Netflix really took off – the service said it had 45 million unique viewers and was the fourth largest source of peak Internet traffic in the US. When the biggest competitor to Justin.tv shut down the platform had a near monopoly on gaming content.

The company was renamed to Twitch Interactive and was acquired at the end of 2014 by Amazon. Amazon beefed up the underlying delivery platform, which increased the quality of the streams. Since then Twitch has grown significantly. Amazon reports that the service has over 100 million unique viewers per month, nearly 10 million per day. The average number of simultaneous viewers at any given time on the platform is about 622,000.

Amazon has grown the service by opening up the platform to ‘partners’ much as it has done with OTT content. Twitch now has over 17,000 partners – those that stream unique content. 35% of the content is viewed on cellphones, with the rest on landline broadband connections.

Twitch viewers are loyal. Over half watch the service more than 20 hours per week – and for many of them this is their primary source of video content. The average Twitch user watches the service for 1 hour 46 minutes per day.

While the Twitch platform is free (and I recommend taking a few minutes to watch the above link), many of the channel partners charge monthly subscriptions.

I find it interesting that Twitch is not counted in the universe of OTT providers. But Twitch viewers and statistics are separate from, and not counted with viewers of Amazon Prime. Perhaps this is not considered as OTT content since a lot of the content is viewer-generated. But this is still largely true for YouTube, which is now counted among the OTT providers. Many of the channels on Twitch are now professionally produced and certainly are hard to distinguish from other OTT content.

The GVC industry is worth noting because they are a big source of video content on our broadband networks. The video watched on the web doesn’t just come from sources like Netflix and more and more of it is coming from platforms like Twitch that carry a mountain of viewer-generated content. This is just one more example of how the major programmers are going to be in trouble as the generations turn. Younger viewers are not watching traditional programming to nearly the degree of older generations.