(Repeats story first sent on Monday, no changes to text)
By Malathi Nayak and Lisa Richwine
SAN FRANCISCO/LOS ANGELES Aug 26 Amazon.com Inc
tracked Twitch's evolution from scrappy guerrilla
startup to one of the Internet's hottest media properties. On
Monday, it announced a near-$1 billion acquisition to get into
one of the fastest-growing online arenas: live-streaming.
Amazon's $970 million bet - its largest ever - underscores
how a loyal and fast-growing following for live-streaming has
grabbed the attention of big brands. Some believe live and
interactive streaming, in which Twitch is a pioneer, is the new
frontier in online video.
Bessemer Ventures' Ethan Kurzweil admitted on Monday he got
blank stares from people he described Twitch to initially. The
San Francisco-based startup lets gamers livecast their play
while responding to cheers, tips and random musings from online
viewers in real time.
In three years, Twitch has become the fourth largest U.S.
producer of peak Internet traffic, ahead of Facebook and Hulu,
according to Bessemer, a backer.
"It's a captive audience and one that is loyal," said Adam
Shlachter, head of media activation at marketing agency
DigitasLBi. "Where you have like-minded people..all aggregated
in one place, kind of holed up around the same thing and
participating in the same experiences, that offers a really
unique environment to target (ads) against."
Live-streaming draws a following partly because of its
immediacy: fans message their favorite personalities and can
evoke a response during livecasts. Twitch and other live-stream
networks like Livestream also cater to niches, featuring content
such as offbeat sports to videogames that mainstream outlets
Twitch had 55 million monthly viewers in July, up about 45
percent from a year earlier. That growth caught the attention of
advertisers, who spotted the chance to reach younger viewers who
watch less television.
Brands will spend $6 billion this year on digital video
advertising in the United States, according to research firm
eMarketer. Live events are appealing to advertisers because
audiences can't skip commercials.
Most of Twitch's thousands of livecasters are simply gamers.
Some boast a following of hundreds of thousands and earn a cut
of ad revenue from the likes of PepsiCo's Mountain Dew
and Time Warner Inc's Warner Bros.
YouTube, whose parent Google Inc was in talks to
buy Twitch, streams some events live but most of its videos are
recorded. On live platforms like Twitch, ads appear as a user
opens a stream or when livecasters take a break.
"Interacting with celebrities and artists is a growing
trend," said Max Haot, chief executive of Livestream.
Twitch is adding staff with expertise in programmatic ad
buying, which uses computers to sell ads in real time, Twitch's
chief revenue officer, Jonathan Simpson-Bint, told Reuters this
month. That will give advertisers the option to insert
commercials into Twitch videos that see a sudden surge of
It's also branching out into music events.
"Amazon has a direct media sales group of its own...I think
our ad sales numbers will be accelerated by the fact that we are
going to have access to resources of Amazon," Twitch's chief
executive Emmett Shear said.
Twitch's breakneck growth is now propelling the live
streaming video format beyond gaming and pushing media companies
and YouTube personalities to test it out.
Discovery Communications Inc's hosts a monthly
Google+ Hangout with NASA scientists and Animal Planet live
streams events like the Internet Cat Video Festival in
Minnesota. Discovery plans to invest in more interactive
streaming events to help build a "two-way" relationship with
viewers, said Sean Atkins, senior vice president of digital
Tom Cote, co-host of "Funny Stuff & Cheese," an independent
online comedy series that streamed over a hundred shows live
during its first season, says his fans like that they can ask a
question and get a response within minutes.
The format has its challenges. It takes creators time to
find a groove and overcome technical glitches, Cote said. And
there's no chance for editing or retakes.
"It will be widespread," he said. "Right now, I think people
don't have the confidence to go live. It's a whole different
beast than traditional video."
(Reporting by Malathi Nayak and Lisa Richwine)