Each month, Australian bookmaking legend Tom Waterhouse publishes a newsletter from Waterhouse VC, his gaming and wagering-focused venture capital fund.Since inception in August 2019, the fund has achieved a gross total return of 1,891% through to 30 June 2023.
In collaboration with iGaming NEXT, the August edition of Waterhouse VC takes a deep dive into the battle between Twitch and Kick for streaming supremacy.
Twitching into gear
Streaming involves transmitting media content, whether it’s live or pre-recorded, through the internet for immediate playback on computers and mobile devices.
Streaming allows audiences to connect with content creators across gaming, art, music, sport and several other categories.
A viewer can engage directly with the streamer through chat functionality and can pay them if they enjoy the stream, effectively monetising streaming for the content creator.
The rise of pro gamers and dedicated fan bases has boosted user numbers on streaming platforms like Twitch, which Amazon bought in 2014 for $970m, just three years after its 2011 launch.
The opportunity in streaming is vast, with just a handful of platforms dominating the $3.8bn industry.
Audiences converge to take part in gameplay, tutorials, and social chat rooms, hosted by their favourite gamers.
Most platforms are free-of-charge for both streamers and their audiences. The platforms monetise their audiences through advertising and by taking a portion of premium subscription revenue and merchandise sales.
For example, there are three tiers for Twitch users who want to subscribe to a streamer: $4.99, $9.99 and $24.99 per month.
In the case of Twitch, subscription revenue was split 50/50 between the platform and the streamer until June 2023 when the split was adjusted to 70/30 in favour of the streamer (details here).
Twitch also has ‘Bits’, which is the platform’s internal currency used by viewers to support/tip the streamer.
Revenue generated through Bits is split between the streamer and the platform according to several factors, such as the streamer’s popularity and their location.
