The Bauminator

Does YouTube Have An Itch For Twitch?

Reports Say A Deal Is In The Making 5/19/2014 9:45 AM

Twitch’s rapid rise in popularity might be capped by a massive acquisition by YouTube, according to multiple reports. But how soon such a deal comes together is not entirely clear.

 

Variety first reported Sunday that Google’s YouTube is poised to buy Twitch, a service that lets video gamers live stream their gameplay, for more than $1 billion, adding that YouTube is also preparing to get some static from regulators about the deal’s potential affects on the online video market. The Wall Street Journal, meanwhile, said the talks between YouTube and Twitch were at an “early stage,” and didn’t have a line on a potential purchase price.

 

A Twitch official, meanwhile, tweeted that the company “doesn’t comment on rumors.”

 

But if YouTube were to pull the trigger, an acquisition of Twitch would be its largest ever, if it hits the price range cited by Variety. By way of comparison, Google bought all of YouTube for just $1.65 billion in 2006.

 

And YouTube’s apparent interest sheds more light on an ad-supported live video streaming service that has been growing in leaps and bounds.

 

Twitch, according to a report issued last week by bandwidth management firm Sandvine, is on the cusp of becoming a top ten streaming app in the U.S., accounting for 1.35% of traffic, outpacing HBO GO’s 1.24%. But that was still well behind Netflix, which accounted for 31.09% of aggregate traffic (upstream and downstream) on fixed access networks in North America, followed by YouTube’s 12.28%.

 

But in the live streaming category, Twitch has no equal in the U.S.  According to recent data from Qwilt, a company that makes “transparent” video caches and sells to MSOs such as Mediacom Communications, Twitch has locked up 43% of live streaming traffic in the U.S., well out in front of WWE (17.7%), Ustream (10.9%), MLB.com (7.9%), and ESPN (6.3%).

 

The majority of Twitch content is free, though partners have the ability to sell subscriptions to their channels. At last check, Twitch claimed to have 1 million monthly “active broadcasters” and 45 million visitors per month.

 

In February, Twitch Interactive replaced Justin.tv Inc. as the company’s corporate umbrella name. Twitch has raised about $35 million.

 

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