Editor's Note: Inc. Magazine announced its pick for Company of the Year on Tuesday, November 25. It's Airbnb! What's your top pick? Vote now in Inc.'s Readers' Choice poll. Here, we spotlight Twitch, one of the contenders for the title in 2014.
Twitch doesn't just sound like an involuntary response, it is.
The San Francisco-based video streaming platform Twitch had been quietly amassing a giant community of devoted gamers and gaming enthusiasts. Yet its popularity became undeniable when Amazon acquired the company for north of $1 billion in August. (The terms: $970 million in cash and another $130 million in stock.) Twitch allows spectators to watch others play video games via live stream, and attracts more than 60 million unique visitors per month.
Businesses in general could take a cue from the dynamic way Twitch carved out a massive market for itself. In addition to monetizing the experience of watching others play video games by running advertisements and charging a monthly subscription fee, the company also creates a way for gamers to earn money doing what they love, as it splits ad revenue with individuals who broadcast themselves playing.
Twitch was born in 2007 as the video game segment of live streaming site Justin.tv. In 2011, after attracting far more traffic than any of the site's other verticals, co-founders Justin Kan and Emmet Shear gave the gaming channel its own platform and rebranded it as Twitch.
Today, Twitch accounts for more Internet traffic in the U.S. than the popular online destination, HBO GO, according to a report from networking equipment company Sandvine. Twitch's growth forced Kan and Shear to shutter Justin.tv completely in August.
Perhaps most interesting about Twitch is the fact that spectators tune in not only to watch but also to interact with the more than 1 million gamers who broadcast themselves.
"I think anytime you have something that people are really passionate about the way they're passionate about video games--whether it's cooking or sports--you see a huge amount of content being produced around that, around people expressing themselves and wanting to share that," Shear was recently quoted as saying.
Though Twitch spectators are merely watching video games--as opposed to playing them--the sharing of suggestions for how to best play the game is a huge part of the live chatting experience, adding a new dimension to the interactivity that almost hands the controller over to the spectator. Gamers also come to Twitch for reviews of new video games, some of which come from paid reviewers.
Will the platform lose any of its cred with gamers now that Amazon owns the company? That's still anyone's guess. But it does look like it's trying to keep that magic alive. Last month, Twitch vice president of marketing and communication Matthew DiPietro announced through a blog post that the company was changing its rules regarding sponsored content, writing:
While we have always encouraged our broadcasters to acknowledge if they are playing games as part of a promotional campaign, we are now establishing a much more transparent approach to all paid programs on our platform and hope that it sets a precedent for the broader industry. Simply put: We want complete transparency and unwavering authenticity with all content and promotions that have a sponsor relationship.
As for its youthful, lighthearted spirit? Shear sounds upbeat. "Amazon really promised to give us the flexibility and freedom we needed to really execute on our strategy," he told the BBC in a recent interview.