Amazon really aren't on the radar round here nearly as much as they should be. As some in this thread have pointed out their strategy is to spend absolutely all income on slightly out there R&D, which in the case of things like their web services wildly over return.
Just because they aren't based in the valley and make Apple look positively liberal when it comes to secrecy and working practices doesn't mean they should be ignored. Quite honestly I think they're the single most terrifying company in the US today, an idea Bezos would take as a compliment.
The big picture is they are gunning to become the universal middle men for when people actually spend money on the net. Google only have the ad side of things together, but never really cracked getting end users to open their wallets, yet Amazon are in the position of starting in front of users, and slowly moving themselves into being the background glue between everything else, facilitating transactions between everyone while taking their cut and enforcing their rules. Terrifying, and brilliant.
I wish they'd try harder with their payments business - they could be in a position to compete with Stripe or Paypal but instead force users to pay with their Amazon accounts. That doesn't make sense as a business strategy to me.
Amazon is in many ways a more interesting company than google. Amazon's offerings are becoming more and more diversified and they're industry leaders in more than one area. And they are making a strong push at maintaining growth/expansion.
Amazon has a strong history of expanding their business and building new highly valuable products with staying power. Google has only expanded a little in terms of actual functional products, most of their additions have been via acquisitions, and they have not done well at monetizing or even supporting many of their new product offerings. Google is primarily search + backbone ISP, that's where almost all of their revenue comes from, everything else falls into a tiny "other" category. Indicative of their utter inability to effectively spinoff new products and high revenue businesses.
The only downside is that the work environment is more than a little dysfunctional.
They're not as secretive as Apple. We use AWS and I'm often talking to our account manager or support, and they're always talking about upcoming products and features in the pipeline. They just don't give ETAs, which is sensible, to ensure customers aren't banking on feature X being available on date Y.
They also advertise some of their working practices when it benefits them (eg datacentre physical staff don't have logical access), but to be honest, there aren't a lot of big companies out there that openly advertise their internal processes. They're also being extremely open about wanting to be The Middle Man when it comes to cloud, nothing stealthy about it at all. I just went to a free AWS summit, where the VP giving the keynote said as much - how is it possible to accuse them of secrecy when they paid for a big venue for me to visit, just in order to tell me exactly that factoid?
They are worth watching due to monopolistic concerns, sure, but there's so much FUD out there about them.
Twitch is not going to be another YouTube success story. There just aren't enough great uses for live streaming yet and video game streaming is very far from being mainstream. Twitch obviously can't believe it's very close to reaching NFL-like status either or it wouldn't sell for a mere billion and change.
Amazon or Google will piss off or drive away the Twitch user base. The users will all move to Hitbox.tv or any number of new sites that will pop up. It's easy to do live streaming, it's just expensive. This acquisition will bring funding and Yahoo will buy the next popular live streaming site.
It's true that video game streaming is far from being mainstream, but considering how engaged kids are in gaming now, I don't think it's far-fetched to see it only becoming more popular in the future.
There is already a lot of money in esports, so I'll go out on a limb here, and say that it's only a matter of time before it becomes mainstream.
Depends on your definition of mainstream. I know some huge games like League of Legends, DOTA2, and Starcraft routinely do 6 figure concurrent viewer counts for tourneys. That is higher than a lot of TV. I personally have had 8,000 live viewers.
NFL like status is not attainable so lets not say that this is the business plan. Yes the users can move somewhere else, but for gaming twitch is the de facto site for streaming right now. There has been talk of switching sites whenever some streamers get aggravated but it would have to be a huge failure to have people switch en masse.
It is also not easy to do live streaming. It uses massive amounts of bandwidth, and you have to keep this going live to people all over the world. Twitch is the YouTube of video game streaming at the moment and it would be hard to unseat them.
I think your underestimating the potential of game streaming. Twitch might be a seemingly impossible distance from reaching NFL-like numbers on a single stream, but what about 1% of that audience on 100 streams? or 500 streams? They don't even need to have that, because twitch is streaming 24/7. Everyone will see a few YouTube videos a week, maybe even a few a day, but Twitch users will watch a stream for HOURS.
I'll preface this by saying that I do believe esports will be the biggest international competition after soccer/football. I do agree that twitch won't be the end all be all in live streaming games. The barrier is very low and I think in a growing market, a company under amazon or google can't flourish.. where a startup that leaner and more in touch with trends could easily come out and compete.
Even if live-streaming video games (or other digital real-time content like screenshares) was a hot market, Amazon doesn't have as good a record as Google in integrating it's acquisitions.
Look at Audible - they still have their own crufty website (which uses the same credentials as your Amazon site, sure) and discovery and reviews are less usable there than on Amazon.com.
Also see Goodreads, DPR and IMDB - all places where things have essentially gone on "as before".
Twitch will more easily move to deliver IPTV broadcast of events to the cable-cutting netflix crowd than traditional media. I would be happy to bet long on them.
I mean we already see the start of it with YouTube broadcasting Coachella, etc. More recently, Twitch has been used to stream gaming-related real life stuff, like the Dota 2 International 4 after-party DJ set. Conversely, the big media conglomorates are still wrestling with how to deliver content online and most just mirror your cable subscription to your device, rather than offer IP-exclusive methods of delivery.
I don't think Amazon is the best fit for Twitch - I personally would've preferred some company who is in the entertainment industry and more willing to start breaching into broadcasting live concerts, sport, big events, etc. on it. Valve, for example, already uses Twitch pretty heavily during their events and has shown interest to move outside of gaming (they sell non-gaming software via Steam) but they're probably also not mature enough to really start becoming a fully-fledged media company either. I don't really know of one company who is ideal in that space.
That said, I don't think Amazon is the worst either. It'll be intersting to see how they take it.
With the impact from the many health issues only just starting to be felt, I'd take a bet that esports are more popular than the NFL in another decade.
>There just aren't enough great uses for live streaming yet and video game streaming is very far from being mainstream.
You may be right, but you may be wrong. Twitch is in a similar sort of space as sports - which are the best kind of content generators (and content is king). Piracy is largely side-stepped because value is highest when it is LIVE. New content is always created by incumbents and new challengers, and there is tons of opportunity for marketing.
I don't know what the future holds, but E-Sports are here to stay. It'll only get bigger.
>Twitch obviously can't believe it's very close to reaching NFL-like status either or it wouldn't sell for a mere billion and change.
Why not? Superbowl has 100 million viewers. 200 million viewers for the total NFL season. I don't think those numbers are that impressive, when Facebook gets 800 million active users per day, on 1.3 billion active accounts and Youtube gets 4 billion views per day. In fact, NFL is pretty much done. There is only so much money you can squeeze out of North America, and nobody else cares about it.
>The users will all move to Hitbox.tv or any number of new sites that will pop up. It's easy to do live streaming, it's just expensive.
It's easy to do Youtube. It's easy to do Facebook. It's easy to do Instagram. It's easy to do WhatsApp. Now go do it and see how well you do.
I thought it has previously been confirmed a few months ago that Google was acquiring Twitch. Did that fall through or was the confirmation later retracted?
I think this makes sense for Amazon for two reasons:
1) One of the barriers to entry of live-streaming sites is the expensive hosting costs. With AWS infrastructure, Amazon could potentially have another competitive advantage over other live-streaming sites. They may even provide a better service through higher resolution streaming as they wouldn't be as constrained with bandwidth costs.
2) As Amazon enters the online advertising space to compete with Google Adwords and Adsense, they'll want to own web properties with high impressions for their display ads. User based video creation is great for that but comes with risk for copyright violations. Twitch solves both these issues as it'll give display ads high impressions without much concern about copyright violations as these will mostly be legit user-originated content.
Wow. Google buying them made a lot of sense for deeper integration of live-streaming services into YouTube and going after current-gen console owners... but Amazon?
Regardless of who actually ends up buying Twitch, I'm happy to see that they are valued so highly. They are a great service and have helped make competitive gaming more mainstream due to exposure.
How much longer does Amazon have before investors start beating the drum to become profitable? Would love to see where Twitch fits into their bottom line--I guess it might help sell Fire TVs?
Well they've been given a pass for approximately 18 out of their 20 year existence, split into two segments of time.
There was a two year period of time after the dotcom crash was over where they were beaten on pretty heavily about the lack of profitability.
It really doesn't matter if investors beat the drums frankly. Bezos controls enough of Amazon's stock - roughly three times the next largest investor - it would be difficult to spar with him, short of the stock truly plunging (something like a 75% drop from here might do it). The Bezos family controls roughly as much stock as the next five largest owners combined.
The correct answer is: so long as Amazon's sales continue to grow at ... 15% to 25% per year, and the losses do not become life threatening again, the drums will never get loud enough to disrupt what Bezos wants to do.
I expect with a $100b +/- market cap, Amazon can continue to function without much external concern for quite some time. $100b or so mostly keeps them out of range of someone trying to buy them, and will enable continued acquisitions as needed, while not bashing shareholders too much on the downside such that everyone turns against Bezos. I see no reason they can't maintain that perpetually with zero profits, if sales continue to grow, given the sales scale they're likely to reach in the next decade. They will be given a serious sales multiple so long as sales keep growing relatively quickly. Investors will focus on that and be placated by the kool-aid. When sales growth stops, investors will shift to demanding profits and dividends.
There would have to be some catastrophic setbacks, big losses, and a pause in sales growth, to force Bezos into changing his approach. I suspect at that point he would step aside and become just chairman.
However, keep in mind, Amazon would love to have a cash cow. They'd love nothing more than to print up $4 billion per year in profit from the fire phone, or from their new advertising initiative. So they can show profits, boom the stock, and perpetually run a tight margin business everywhere else.
A better way to phrase the question would be 'when will amazon stop reinvesting every cent of gross profit into growth (AWS, fire phone etc all have large Capex that could have been booked as profit).
In my opinion the answer to this question is whichever comes first of Jeff Bezos dying, amazon being the largest company in the world or amazon imploding and going broke.
In recent times Amazon has started making content exclusive to their own hardware (Amazon TV, Fire tablets/phones). Go check out the comparison chart here:
Note that aside from Apple's devices, Amazon Prime video works only on Amazon's own mobile hardware.
Is this why they're buying Twitch? To make it another "Amazon Exclusive" for Fire devices? Frankly that would explain a lot. If they can lock the content down it will force people into their ecosystem if they want mobile access.
So, this will change basically nothing about Twitch? I assume all of their infrastructure is already on Amazon, so probably more business as usual than having to move everything on to Google's infrastructure (which seems to usually derail product development for 3-6 months on most acquisitions).
[+] [-] fidotron|11 years ago|reply
Just because they aren't based in the valley and make Apple look positively liberal when it comes to secrecy and working practices doesn't mean they should be ignored. Quite honestly I think they're the single most terrifying company in the US today, an idea Bezos would take as a compliment.
The big picture is they are gunning to become the universal middle men for when people actually spend money on the net. Google only have the ad side of things together, but never really cracked getting end users to open their wallets, yet Amazon are in the position of starting in front of users, and slowly moving themselves into being the background glue between everything else, facilitating transactions between everyone while taking their cut and enforcing their rules. Terrifying, and brilliant.
[+] [-] iLoch|11 years ago|reply
[+] [-] InclinedPlane|11 years ago|reply
Amazon has a strong history of expanding their business and building new highly valuable products with staying power. Google has only expanded a little in terms of actual functional products, most of their additions have been via acquisitions, and they have not done well at monetizing or even supporting many of their new product offerings. Google is primarily search + backbone ISP, that's where almost all of their revenue comes from, everything else falls into a tiny "other" category. Indicative of their utter inability to effectively spinoff new products and high revenue businesses.
The only downside is that the work environment is more than a little dysfunctional.
[+] [-] eclipxe|11 years ago|reply
[+] [-] grimtrigger|11 years ago|reply
[+] [-] vacri|11 years ago|reply
They also advertise some of their working practices when it benefits them (eg datacentre physical staff don't have logical access), but to be honest, there aren't a lot of big companies out there that openly advertise their internal processes. They're also being extremely open about wanting to be The Middle Man when it comes to cloud, nothing stealthy about it at all. I just went to a free AWS summit, where the VP giving the keynote said as much - how is it possible to accuse them of secrecy when they paid for a big venue for me to visit, just in order to tell me exactly that factoid?
They are worth watching due to monopolistic concerns, sure, but there's so much FUD out there about them.
[+] [-] dang|11 years ago|reply
In general, we want the best article out there on a given topic, where "not being behind a paywall" adds points toward "best".
[+] [-] staunch|11 years ago|reply
Amazon or Google will piss off or drive away the Twitch user base. The users will all move to Hitbox.tv or any number of new sites that will pop up. It's easy to do live streaming, it's just expensive. This acquisition will bring funding and Yahoo will buy the next popular live streaming site.
[+] [-] weixiyen|11 years ago|reply
I'm on Twitch.tv more than ABC, NBC, CBS, etc for 8 months out of the year (football season excepted).
And I'm definitely not the only person who is like this.
No kids are leaving Twitch as long as it doesn't get rebranded. Amazon just needs to run it as a separate product.
[+] [-] vetler|11 years ago|reply
There is already a lot of money in esports, so I'll go out on a limb here, and say that it's only a matter of time before it becomes mainstream.
[+] [-] specialp|11 years ago|reply
NFL like status is not attainable so lets not say that this is the business plan. Yes the users can move somewhere else, but for gaming twitch is the de facto site for streaming right now. There has been talk of switching sites whenever some streamers get aggravated but it would have to be a huge failure to have people switch en masse.
It is also not easy to do live streaming. It uses massive amounts of bandwidth, and you have to keep this going live to people all over the world. Twitch is the YouTube of video game streaming at the moment and it would be hard to unseat them.
[+] [-] rkuykendall-com|11 years ago|reply
[+] [-] angryasian|11 years ago|reply
[+] [-] r00fus|11 years ago|reply
Look at Audible - they still have their own crufty website (which uses the same credentials as your Amazon site, sure) and discovery and reviews are less usable there than on Amazon.com.
Also see Goodreads, DPR and IMDB - all places where things have essentially gone on "as before".
[+] [-] NamTaf|11 years ago|reply
I mean we already see the start of it with YouTube broadcasting Coachella, etc. More recently, Twitch has been used to stream gaming-related real life stuff, like the Dota 2 International 4 after-party DJ set. Conversely, the big media conglomorates are still wrestling with how to deliver content online and most just mirror your cable subscription to your device, rather than offer IP-exclusive methods of delivery.
I don't think Amazon is the best fit for Twitch - I personally would've preferred some company who is in the entertainment industry and more willing to start breaching into broadcasting live concerts, sport, big events, etc. on it. Valve, for example, already uses Twitch pretty heavily during their events and has shown interest to move outside of gaming (they sell non-gaming software via Steam) but they're probably also not mature enough to really start becoming a fully-fledged media company either. I don't really know of one company who is ideal in that space.
That said, I don't think Amazon is the worst either. It'll be intersting to see how they take it.
[+] [-] onewaystreet|11 years ago|reply
[+] [-] hatu|11 years ago|reply
[+] [-] macspoofing|11 years ago|reply
You may be right, but you may be wrong. Twitch is in a similar sort of space as sports - which are the best kind of content generators (and content is king). Piracy is largely side-stepped because value is highest when it is LIVE. New content is always created by incumbents and new challengers, and there is tons of opportunity for marketing.
I don't know what the future holds, but E-Sports are here to stay. It'll only get bigger.
>Twitch obviously can't believe it's very close to reaching NFL-like status either or it wouldn't sell for a mere billion and change.
Why not? Superbowl has 100 million viewers. 200 million viewers for the total NFL season. I don't think those numbers are that impressive, when Facebook gets 800 million active users per day, on 1.3 billion active accounts and Youtube gets 4 billion views per day. In fact, NFL is pretty much done. There is only so much money you can squeeze out of North America, and nobody else cares about it.
>The users will all move to Hitbox.tv or any number of new sites that will pop up. It's easy to do live streaming, it's just expensive.
It's easy to do Youtube. It's easy to do Facebook. It's easy to do Instagram. It's easy to do WhatsApp. Now go do it and see how well you do.
[+] [-] christopherslee|11 years ago|reply
[+] [-] imjk|11 years ago|reply
2) As Amazon enters the online advertising space to compete with Google Adwords and Adsense, they'll want to own web properties with high impressions for their display ads. User based video creation is great for that but comes with risk for copyright violations. Twitch solves both these issues as it'll give display ads high impressions without much concern about copyright violations as these will mostly be legit user-originated content.
[+] [-] antoncohen|11 years ago|reply
http://blog.twitch.tv/2014/08/a-letter-from-the-ceo-august-2...
[+] [-] mmxiii|11 years ago|reply
For now, Amazon is selling physical copies, but seems reasonable to reuse their content delivery infrastructure for game downloads in the future.
[+] [-] samelawrence|11 years ago|reply
What are you working on, Jeff?
[+] [-] bhouston|11 years ago|reply
Does anyone have statistics on whether FireTV is doing better with gaming that OUYA? Does anyone actually use the gaming features?
[+] [-] alexgaribay|11 years ago|reply
[+] [-] ig1|11 years ago|reply
http://www.bvp.com/blog/twitch-time-wild-ride-start-finish
[+] [-] tdicola|11 years ago|reply
[+] [-] adventured|11 years ago|reply
There was a two year period of time after the dotcom crash was over where they were beaten on pretty heavily about the lack of profitability.
It really doesn't matter if investors beat the drums frankly. Bezos controls enough of Amazon's stock - roughly three times the next largest investor - it would be difficult to spar with him, short of the stock truly plunging (something like a 75% drop from here might do it). The Bezos family controls roughly as much stock as the next five largest owners combined.
The correct answer is: so long as Amazon's sales continue to grow at ... 15% to 25% per year, and the losses do not become life threatening again, the drums will never get loud enough to disrupt what Bezos wants to do.
I expect with a $100b +/- market cap, Amazon can continue to function without much external concern for quite some time. $100b or so mostly keeps them out of range of someone trying to buy them, and will enable continued acquisitions as needed, while not bashing shareholders too much on the downside such that everyone turns against Bezos. I see no reason they can't maintain that perpetually with zero profits, if sales continue to grow, given the sales scale they're likely to reach in the next decade. They will be given a serious sales multiple so long as sales keep growing relatively quickly. Investors will focus on that and be placated by the kool-aid. When sales growth stops, investors will shift to demanding profits and dividends.
There would have to be some catastrophic setbacks, big losses, and a pause in sales growth, to force Bezos into changing his approach. I suspect at that point he would step aside and become just chairman.
However, keep in mind, Amazon would love to have a cash cow. They'd love nothing more than to print up $4 billion per year in profit from the fire phone, or from their new advertising initiative. So they can show profits, boom the stock, and perpetually run a tight margin business everywhere else.
[+] [-] discodave|11 years ago|reply
In my opinion the answer to this question is whichever comes first of Jeff Bezos dying, amazon being the largest company in the world or amazon imploding and going broke.
[+] [-] azernik|11 years ago|reply
[+] [-] bdz|11 years ago|reply
[+] [-] lawdawg|11 years ago|reply
[+] [-] simonz05|11 years ago|reply
[+] [-] tehwebguy|11 years ago|reply
[+] [-] Someone1234|11 years ago|reply
http://www.amazon.com/Fire-TV-streaming-media-player/dp/B00C...
Note what Amazon Prime Streaming works on. Then go here:
http://www.amazon.com/gp/video/ontv/devices
Note that aside from Apple's devices, Amazon Prime video works only on Amazon's own mobile hardware.
Is this why they're buying Twitch? To make it another "Amazon Exclusive" for Fire devices? Frankly that would explain a lot. If they can lock the content down it will force people into their ecosystem if they want mobile access.
[+] [-] eroo|11 years ago|reply
None of the reporting outlets have any substantial details yet though.
[+] [-] unknown|11 years ago|reply
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[+] [-] grantlmiller|11 years ago|reply
[+] [-] jboons|11 years ago|reply
[+] [-] chx|11 years ago|reply
[+] [-] programminggeek|11 years ago|reply
[+] [-] simonz05|11 years ago|reply