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  • Writer's pictureTaavi Salm

Live streaming: a new competition for TV

Live streaming (called also simply streaming) refers to online streaming media simultaneously recorded and broadcast in real time. in the last few years it has become serious rival to to traditional broadcast TV for younger people. User interaction via live chat rooms is a major component of live streaming. Live stream services encompass a wide variety of topics, from social media to video games to professional sports.

What are the big platforms of live streaming?

  • Twitch is the world's leading live streaming platform. It is designed to be a platform for content, including esports, sports tournaments, personal streams of individual players, and gaming-related talk shows.

  • Mixer is a Seattle-based video game live streaming platform. It is the new platform trying to compete with Twitch. It is mainly known for signing multiple big Twitch streamers to Mixer-exclusive deals like Michael "Shroud" Grzesiek and Tyler "Ninja" Blevins

  • YouTube live is the live streaming platform of the popular video sharing platform YouTube. Their content includes live gaming, live music, live sports, and live news.

  • Facebook Live is the live streaming platform of the popular social media and social networking platform Facebook.

  • Periscope is an American live video streaming app for Android and iOS. It is owned by twitter.

The game streaming market is dominated by Twitch with the others slowly growing their market shares.

Surprisingly last December it was not a game but just chatting that was the most popular with streamers.

Who is the audience for live streaming?

If we take the example of Twitch the average stream watcher is under 34 years old and mostly male. Only 27% of user are older than 35.

Where is the money in live streaming?

What makes live streaming so appealing to many is the illusion that it is easy money. Just play games and you will get money. It is not that simple.

The streaming landscape is very competitive, as there are thousand of people competing for views. There isn't a miracle formula, it is a mix of personality and skill.

Here are the main ways to earn money from streaming:

1. Running ads during live streams.

Pre-roll ads run before the live stream, viewable on mobile and desktop. Mid-roll ads run during the live stream, can be manually inserted during desktop streams. Display and overlay ads run beside or over content, viewable on desktop. 

2. Fan donations. Every platform has a way for viewers to donate, usually with virtual currency. - YouTube’s main tipping service is Super Chat. Viewers can use tips to pin messages in your channel’s chat window, making them more noticeable. YouTube also lets users buy chat animations called Super Stickers, and you get a cut of each purchase. - Twitch allows viewers to “cheer” using Bits, the platform’s virtual good. If you’re a Twitch affiliate or a partner, you get around a cent for every Bit viewers use when cheering. - Facebook’s tipping service revolves around Stars, a type of virtual good viewers can buy and send to you, giving you a cent per Star. - Mixer has a system where viewers gain Sparks by watching streams and spend them on Skills (animation and gifs). Getting enough Skills will get you a payout.

3. Pay per view/subscriptions. The pay per view model asks fans to pay a certain amount to unlock access to a creator’s “hidden” live content. This content is usually more special and unique than the open content (it has to be worth paying for). Similarly, a subscription gives access to all of a creator’s exclusive content for a period of time.

The most commonly used pay walling service is Patreon. It is currently one of the most influential donation platforms, shaping the financial freedom and future of many creators. You can see on the graph below that after an initial fall, the Patreon donations are rising again.

Source: graphtreon

4. Brand deals and sponsorship.

Striking a great deal with a large company is a dream for many creators. Promoting a brand over live video makes the “ad” feel more trustworthy. Profit from brand deals and sponsorship can vary drastically based on brand, your channel specificity, the size of your following, and more factors.

5. Affiliate programs.

A membership in an affiliate program will allow you to get a commission every time a shopper clicks on your affiliate link and makes a purchase. It is a specific form of sponsorship. The streamer needs to place the link or the code somewhere in their stream description and mention it during the live stream.

6. Sell your merchandise.

Creating and selling your own merchandise is a viable revenue model for live streamers. You can promote your own merchandise in a live stream casually pointing out where and how to buy it.

Sites like Merch by Amazon, redbubble, spreadshirt (among many others) allow you to create and sell your designs with no upfront investment or costs.

Why talk about live streaming?

In a time of social distancing it is the media channel that is gaining the most traction. Creators on those platforms do not need to film on set, travel to a studio or hire technicians to deliver content wish has maintained the flow of new streams during confinement. Despite these factors big brands are still not seeing the marketing potential of this medium.

Streaming is a huge marketing opportunity for companies targeting younger adult audiences. In a 5 yo 10 year perspective streaming platforms audience reach will multiply by 100x because of the younger generation that have been growing with the medium.

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