YouTube enters another live-streaming fight because of Vertical integration

The first time YouTube tried live-streaming, it failed. YouTube Gaming began in 2015 after Google tried and failed to buy Twitch, and as of this May, the project was shuttered because it was confusing for users. “It was pretty bad. It could not have been worse, to be completely honest,” says the e-sports consultant and broadcaster Rod Breslau, when I reach him by phone. The failure knocked YouTube out of the race it had been in with Twitch to win the hearts and minds of the streaming class, and it kept the company from really developing a robust live-streaming community. Its death, however, was not the end.

In recent months, YouTube has been positioning itself for another run at the crown. Juiced by the impending arrival of Google Stadia, the company’s first foray into cloud gaming, YouTube’s been on a hunt for talent it can use to draw new viewers to its platform. It’s especially wild when you consider that YouTube — the most popular video platform on the planet — already has starred with millions of followers. That, combined with the fact that the platform also has the most effective video distribution network on the internet, means that YouTube could reshape live-streaming in its image. That is if it learned its lessons from the last go-round.

The bigger question, though, remains: will YouTube be able to capitalize on the opportunity?

In the last month, YouTube cut deals with Jack “CouRage” Dunlop and Lachlan Power, who between them commanded about 3 million followers on Twitch. While I’m sure they were paid handsomely, Dunlop and Power will also benefit from plugging themselves into YouTube’s scale. According to Breslau, during Fortnite’s black hole event, there were about three times as many people watching the hole on YouTube as there were on Twitch. According to YouTube, Power’s stream alone maxed out at 198,976 live concurrents, which is a truly staggering number. To put that in perspective: Tim “Timthetatman” Betar, one of the most followed creators on Twitch, drew in 100,000.

More recently, the League of Legends World Championship semi-final happened last weekend, drawing in a peak of just about 4 million concurrent viewers — a number that, according to Breslau, made the event the most-watched esports event of all time in the west (excluding China). And there were more people watching it on YouTube than on Twitch.

IT’S BETTER FOR YOUTUBERS TO STREAM ON YOUTUBE

The difference in viewership can be explained by the difference in audience. Twitch, as a platform, has a community built specifically around live streams; YouTube’s community is centered on events and prerecorded videos. There isn’t really a culture around streaming on the site or at least not much of one outside of political events and lo-fi chill anime beats streams. But paradoxically, it’s also generally better for YouTubers to stream on YouTube — because that’s where their audiences are.

YouTube wants viewers to get more used to seeing live streams on the site. In an email, Ryan Wyatt, head of gaming at YouTube, wrote that part of the reason that YouTube folded gaming back into its main site was to make sure live-streaming was introduced to the entire YouTube audience.

Some YouTubers do go over to Twitch to live stream, but their viewership is nowhere near what they can pull in on YouTube; it can be orders of magnitude different. YouTube, Breslau says, is the only platform with “an endemic fan base with millions of subscribers for millions of creators already. And you already have a platform with all of the subscribers on your platform.” Translation: it’s much easier to stream to the audience you already have than it is to find a new one because it’s easier to convert fans into concurrent viewers than it is to convert internet strangers into fans.

THE POINT OF ALL THIS IS VERTICAL INTEGRATION

Here, Felix “PewDiePie” Kjellberg is probably the best example. Earlier this year he announced he’d signed an exclusive streaming deal with DLive, a blockchain-fueled live-streaming platform that doesn’t have a huge viewership. He has just over 640,000 followers on DLive — an impressive number, but nothing compared to his YouTube audience. On YouTube, he is the most followed creator on the platform, with an utterly bonkers 102 million people. If Kjellberg ever streams on YouTube, where his videos regularly pull in millions of views, it will proverbially break the internet. Many of those 102 million people would get a notification alerting them to a stream at the same time; if even 1 percent of Kjellberg’s total audience shows up, that’s one million concurrent viewers.

Either way, the platform itself doesn’t seem to mind: Wyatt wrote that the site planned to “always invest in YouTube creators, even if part of their business is on another platform.” In his message to me, he also alluded to the fact that YouTube is actually winning the streaming wars. “Regardless of where Creators are streaming, they are all uploading on YouTube,” he wrote, “and we will be sure to continue to support them since every Gaming creator is a YouTube creator.”

The point of all this is vertical integration. YouTube paying creators millions to stream exclusively on the site is just Google buying viewers for Stadia, which neatly integrates with YouTube in ways that encourage streamers to use it. While Twitch is trying to own the future of live television, Microsoft and Google are going head to head in the console wars. As Breslau says, Microsoft bought Michael “shroud” Grzesiek and Tyler “Ninja” Blevins to make Project Scarlett, its upcoming console, a success. “Obviously they want to make YouTube and Mixer big platforms, but the larger tech portion of it — these consoles that are coming out in the next year or two — are a significant reason why this is happening.”

It’s also why we’re absolutely going to see more big names change platforms in the near future. All of this is good for streamers, of course: they get a hefty payday, sometimes in the seven-figure range, just for changing where they create their content. It’s nothing to the platforms, either — to them; it’s like paying a toll with the change you found in your couch. And for viewers, it’s simple: if you like a streamer, you’ll follow them wherever they decide to go.