Tom Waterhouse, of Waterhouse VC, in his most recent column analyses the popularity and rise of gambling streamers. He charts the fall and success of Twitch, and its rival Kick.
Twitch has seen a rise in users due to the popularity of professional gamers. Amazon bought Twitch for $970m in 2014, only three years after the platform’s launch. The streaming industry is a huge opportunity, and only a few platforms dominate the US$3.8bn market.
The audience can join in on tutorials, social chats, and gameplay hosted by the gamers they love. Both streamers and audiences can use most platforms for free.
Platforms monetise audiences by monetizing advertising, premium subscription revenues and merchandise sales. Twitch offers three subscription tiers: $4.99 ($9.99) and $24.99 ($24.99).
Dividende de revenus de subscriptions
Twitch splits subscription revenues 50/50 with the streamer. The split was 50/50 until 2023, when it was changed to 70/30.
Twitch has its own currency, “Bits” which viewers can use to tip or support the streamer. Bits revenue is divided between streamers and platforms. The split is based on several factors such as popularity of the streamer and location.
Twitch changed the way it splits subscription revenues with its streamers for several reasons. The majority of streamers feel that their efforts are not being compensated.
According to a leak from 2021, only 0.01% streamers earn more than the minimum wage. Twitch’s revenue split was also influenced by the increasing competition of new platforms.
Kicking stream on the head
Launched in January 2023, Kick is rapidly gaining popularity among streamers as well as viewers. Platform offers streamers a very lucrative deal, allowing them to split the revenue 95/5 in their favor. The platform allows the streamers to retain all tips.
Kick is a platform that has embraced gambling, which makes it different from Twitch.
A Twitch streamer confessed in September 2022 that he borrowed money under false pretences from creators popular to fund gambling. Twitch banned most gambling streams due to this, and the negative impression of gambling streaming. The ban became operative on 18 October 2022.
The company stated: “We will be updating our policy on 18th October in order to prevent streaming of gambling websites that offer slots, dice, and roulette games, but are not licensed by the US, nor other jurisdictions which provide adequate consumer protection.”
Give people what they Want
Kick, on the other hand, has a lot of gambling-related content. It has been able to attract some of Twitch’s most popular streamers.
Trainwreckstv, for example switched over to Kick.com after Stake was barred from Twitch. In 2023, xQc signed a two-year US$70million deal with Kick.
Kick is clearly meeting a global need for gambling streaming. When gambling is banned, consumers often still find ways to play. This industry is resilient.
This is an emerging industry. As with any emerging industry, regulations are developing quickly.
Easygo Entertainment Pty Ltd is the “Australian powerhouse” behind Kick and Stake, two of the fastest-growing online brands in existence.
Easygo is the sole shareholder of Kick Streaming Pty Ltd, its registered legal entity. Easygo, a company founded in 2016, was created by Ed Craven & Bijan Tehrani.
A worthy competitor?
We can therefore be sure that Kick won’t ban streaming gambling. In several newsletters such as the May 2023, we have talked about Stake and its extraordinary growth in crypto betting.
Kick is attracting new streamers. The platform has grown from having 9,000 channels active in January, to over 67,000 channels active in April thanks to its 95/5 revenue split.
The platform’s monthly hours of viewing quadrupled in the same period from 12,8 million to 51,8 million. Annually, this translates to just 620 millions hours. This is only 2.8% the size of Twitch.
Kick, however, is a serious competitor to Twitch, thanks to its strong growth, and positive attitude toward gambling streaming.
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Note that the information above in regards to Kick Streaming and Easygo Entertainment platforms, Stake and Twitch as well as YouTube and Meta is based upon publicly available company information and shouldn’t be construed to be financial advice. This document contains general information and is not intended to be construed as investment advice or any other type of financial product recommendation. The reader should seek and follow professional advice on investment specific to his or her circumstances.
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