Amazon's $970 million buy gives Twitch the best of both worlds: Money and freedom
The saga is over. Twitch, the game-focused video streaming service indeed has a new owner, as has long been rumored, and yes, the selling price was right around the $1 billion everybody was whispering about. But the earlier leaks got one oh-so-crucial detail wrong: On Monday, it was Amazon announcing a deal to buy Twitch for $970 million—not YouTube.
It’s a bit of a shock. Variety and The Wall Street Journal both initially reported that it was Google in talks to buy Twitch, and VentureBeat went so far as to call it a sealed deal a month ago. Apparently not; earlier Monday, WSJ and The Information reported that the Google-Twitch talks had cooled, and then BAM! Amazon made its grand announcement.
“We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster,” Twitch CEO Emmett Shear wrote in a statement of his own. “We’re keeping most everything the same: our office, our employees, our brand, and most importantly our independence. But with Amazon’s support we’ll have the resources to bring you an even better Twitch.”
Amazon: YouTube’s benefits without YouTube’s drawbacks
Those words touch on some key points. As my colleague Hayden Dingman wrote when rumors of Twitch’s sale first broke, Twitch as we know it would die if Google bought it—but in a good way. Twitch was originally a small subsection of the larger Justin.tv site (may it rest in peace) before exploding in popularity. Twitch wasn’t originally intended to scale to the gargantuan size it is today, and the cracks are only becoming more pronounced the larger the service becomes. Stream quality often looks like garbage, even on high settings. Lag is a major concern. Twitch’s mobile apps suck. And so on. (But the core service is wonderful!)
The back-end infrastructure needed to build a major video site doesn’t come cheap—unless your name is Google. Or Amazon, armed with the gargantuan cloud known as Amazon Web Services.
Selling to Amazon provides Twitch with access to the kind of scale and resources a giant DIY streaming service needs. What’s more, Amazon isn’t tainted by the faint aura of distaste many hardcore gamers have for YouTube—a distaste that largely stems from the strict, easily abused copyright controls Google’s site has in place. Legions of Twitch fanatics screeched when rumors of a Google buyout first swirled, and those screeches turned into outright howls of protest when Twitch began over-aggressively scanning the audio of saved videos for copyrighted content earlier this month.
Hey look! Twitch is buckling down on copyright. So, it’s basically YouTube only purple.— Nate Smith (@NateWantsToBtl) August 6, 2014
Many were also concerned that Twitch itself would be consumed by Google, relegated to being a mere subset of the YouTube brand (which has itself made major strides into live streaming in recent months). It sounds like that isn’t a concern with Amazon, given Shear’s proclamation that Twitch will remain an independent entity.
Amazon indeed has a history of allowing its acquisitions to maintain their own identity: Witness the largely hands-off approach Amazon’s had with Zappos, Audible and Good Reads. That history might have tipped the scales in Amazon’s favor, assuming Google was actually in the running.
Acquisition promises don’t always wind up becoming post-money reality—consider how Comixology dropped support for in-app purchases on its iOS app after Amazon bought it. But at first glance, Twitch appears poised to eat its cake and have it too: bolstered by the big money and big resources of one of technology’s major players, but free to carve out its own future. Twitch can still be Twitch, but now it’s rich—and that should mean nothing but good things for gamers who like to share their late night Dota 2 sessions with the world at large.
Now if only I could figure out why Amazon is so interested in live streaming video games, aside from keeping a rising Internet star out of Google’s hands. Could it have something to do with the new Fire TV set-top box?