Most marketers have seen the reports that YouTube will acquire Twitch, the world’s leading video platform and community for gamers, for $1 billion. So, what would this mean for YouTube if or when it happens? And, more importantly, will digital marketers see any benefits?
Let’s begin at the beginning. Todd Spangler, New York digital editor of Variety, broke the story, entitled “YouTube to Acquire Videogame-Streaming Service Twitch for $1 Billion: Sources,” on Sunday afternoon, May 18, 2014. He wrote, “Google’s YouTube has reached a preliminary deal to buy Twitch, a popular videogame-streaming company, for more than $1 billion, according to sources familiar with the pact. The deal, in an all-cash offer, is expected to be announced imminently, sources said.”
Well, it’s now Thursday morning, May 22, so apparently “imminently” doesn’t mean “in a New York minute.” Or, maybe “preliminary” doesn’t mean “it’s a done deal.” Or, quite possibly, the “sources familiar with the pact” were leaking the story in order to generate interest from other potential buyers at an even higher price.
Whatever is going on behind the scenes, the spokespersons for YouTube and Twitch have declined to comment.
The lack of a formal announcement hasn’t prevented the chattering class from weighing in on the deal. Depending on which opinion you read, YouTube’s acquisition of Twitter is too hot, too cold, or just right. Here are some recent headlines:
- Justin Diaz of AndroidHeadlines writes, “YouTube’s Potential Twitch Buyout Doesn’t Have to Be a Bad Thing.”
- Hayden Dingman of PC World India writes, “Twitch as we know it will die if it’s bought by Google, and that’s a good thing.”
- Lily Hay Newman of Slate writes, “YouTube Will Bring More Diverse Users to Twitch.”
- Andy Smith of ReelSEO writes, “Why the Twitch Purchase Is Great for YouTube but Could Suck for Twitch.”
- Steve Watts of Shacknews writes, “Opinion: YouTube’s Twitch Acquisition Rife With Peril and Possibilities.”
So, what would all this mean for YouTube if or when a deal is officially announced? Well, there’s no reason why anyone on Google or YouTube’s side of the table would leak the deal prematurely. So, unless the “sources” turn out to be a couple of Twitch investors – which include Bessemer Venture Partners, Alsop Louie Partners, WestSummit Capital, Take-Two Interactive Software, Inc., Thrive Capital, and Draper Associates – who can be expected to take the money and run, it means that YouTube will be adding some new executives with “loose lips.”
Now, that shouldn’t be a deal-breaker. Besides, YouTube will get Twitch. Since launching in June 2011, Twitch now reaches 45 million visitors a month, with the average visitor spending 106 minutes a day on the site. Twitch also features more than 1 million broadcasters, which has benefited from the platform’s presence on Xbox One, the all-in-one gaming and entertainment system from Microsoft, and PlayStation4 (PS4) system, Sony Computer Entertainment’s (SCE) next-generation computer entertainment system.
Twitch’s video platform is the backbone of both live and on-demand distribution for the entire video game ecosystem. This includes game developers, publishers, media outlets, events, user-generated content, and the entire e-sports scene. In February 2014, The Wall Street Journal ranked Twitch as the fourth-largest website in terms of peak Internet traffic in the U.S. fortifying the brand as an entertainment industry leader and the epicenter of social video for gamers.
In fact, this would be such a big deal that Spangler’s story included this news nugget: “YouTube is preparing for U.S. regulators to challenge the Twitch deal, according to sources.” Disclosure of this behind-the-scenes insight is another reason why no one on Google or YouTube’s side of the table was responsible for leaking the deal prematurely.
So, if or when this deal happens, will digital marketers see any benefits?
If you talk to the folks at Gameloft, a leading global publisher of digital and social games, then it is business as usual. But, Gameloft was already a Twitch partner and Gameloft’s “Asphalt 8: Airborne” for iOS was the first ever mobile game to feature Twitch’s live-streaming functionality. Gameloft demonstrated the game’s broadcasting capabilities back in March during the week of the Game Developers Conference with a 24-hour live stream event on Twitch.
However, if you talk with most digital marketers, they were so focused on all the opportunities on smartphones, tablets, and even smart TVs that they’d totally overlooked the equally attractive opportunities on game consoles. So, the reports that YouTube was on the brink of the verge of the edge of acquiring Twitch for $1 billion has been a wake-up call.
With 18- to 34-year-olds watching less TV than ever before – and reading less, too, both online and print – it’s been somewhat of a mystery where they’ve all gone. Well, the general answer is online video. And following this week’s wake-up call, digital marketers now know the specific answer is Twitch. That means that digital marketers have already benefited from reports, even if they were premature.