Walker Jacobs, CRO, Twitch

James Kotecki of C Space Studio speaks with Walker Jacobs, CRO, Twitch

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Episode Transcript

Speaker 1 (00:01):
Hi, I'm James Kotechi. You're listening to the c Space
Studio podcast interviews with technology, media and marketing leaders from CS. Hi.
I'm James Kotechi, the host of the c Space Studio
here at CS and I'm very excited to be joined
by Walker Jacobs, the chief revenue officer of Twitch. Thank you,

(00:23):
how you doing, James, Thanks for being here with us.
Glad to be here. So I imagine a lot of
people here at CS know what twitches. But can we
just start with having you to find the brand? What
is Twitch? Yeah? So Twitch is a live video streaming platform. Uh.
Really the primary use cases video games, and it's folks
streaming themselves, uh, playing games. But we're also in traditional

(00:44):
sports and entertainment and music. And it's a live platform.
It's an interactive platform. It's a community based platform, and
it's a really all about the personalities and the content
and that's what helps us resonate with so many young people.
So give me some numbers. How I know Twitch is huge,
but how huge is it? Well, let's see, there's a

(01:04):
few different ways to look at it. We have about
five thousand streamers go live on Twitch every day. It's
about you know, a little over three million every month
go live sets. Like I think of that as like
individual channels. At any given moment of the day, any
day of the week, there's about a million three people
viewing Twitch. Um and uh, we've got uh, depending on

(01:30):
the month, somewhere between you know, sixteen and twenty million
people coming every single day, and on average they're spending
nine minutes on the platform. So the engagement numbers are
are off the chart. So if there's that many people streaming,
how big is the average audience size with these niche
audiences of really passionate fans and but they're relatively small
or how does that work? It's kind of all over

(01:50):
the place. Um. Uh, there's a lot of small communities,
there's a lot of midsized communities. Uh. Generally it's a
function of how long the person has been on there
and how good they are at it. We also do
a lot of professionally produced contents. We have a lot
of sports tournaments with huge prize pools that are professionally
produced organized tournaments. Those tend to do huge numbers, you know,

(02:12):
hundreds and hundreds of thousands, if not million plus live
concurrent viewers. But there's communities that you'll go on there
and they'll be five or six ten people you know,
um and and for me sometimes those are some of
the funnest ones to go watch because you're really able
to interact with the streamer and uh, there's the phenomenon

(02:32):
you get the first time the television talks back at
you is unlike anything and and that's like the moment
most people have this Aha, um, I get it. This
is this is the future, and it's it's really kind
of an amazing thing. Do you have a sense about
why people come to Twitch to engage in this kind
of activity as opposed to anywhere else they could be

(02:53):
watching or creating live content. Yeah, I think it's the
community aspect of it, and I think it's the uum
the fact that it's like Twitches built around live. I
think that some of the other services, live has been
an afterthought and live has been kind of an add on.
Live is at the center of everything we do. And
so if you're a live streamer and you're trying to

(03:14):
build a live live business, to which I think is
a very natural home. So let's talk about how revenue
plays into that. That's your title Chief Revenue officer. How
does revenue work, especially you know, live being different than
other ways that you could serve ads potentially, um What
are some of the challenges behind creating a revenue model there?
So luckily we have a diversified revenue streams um um.

(03:39):
A big part of our success is making sure that
streamers can be successful. So streamers are able to sell
subscriptions to their community, which is really um it's it's
a way to unlock benefits, but it's also sort of
a patronage model. The community sort of intuitively understands that
this is how the streamers making their money, this is
how they get paid, and it's a way to pay

(04:00):
them back for for all the work. There's also a
virtual currency economy called bits, which is a way for
people to tip and show their appreciation to streamers. And
then advertising is the third piece. So just to sort
of maybe unpack what you're asking a little bit, the
only streamers that are eligible to participate in the advertising

(04:20):
economy are affiliates and partners that are people that have
an established business on Twitch, and every single ad that
so they sign in terms of service, you know, we
know who they are, and at that point, every single
ad that runs in their channel they participate in. So, um,
it's great for the efficacy of the advertising in that

(04:41):
Um the community and the consumers that are watching understand
that the ads that are running on that channel benefits
the streamer that they love. It's um, it's it's it's
it's explicitly spelled out that you know this ad benefits
the streamer on the channel you're watching, and so forth. Also,
because it's live, it adds run when a streamers taking

(05:02):
a natural break, We're not disrupting the consumer from getting
to the content they want to watch. We're not holding
content back and making somebody sit through advertising. It's much
more like a live sports environment or a live awards
show environment where when they when we go to ad break,
there's nothing happening on the other side of it. So
it's not um, it's not jarring and disruptive. And do
you look at integrating brands and advertising more naturally into

(05:25):
the content something that the streamer might read or do
as an integrated thing rather than running it adds separately. Yeah. So, um,
we have a product that has evolved a bit. It's
it's we used to call it bounty board. Um Uh,
it's now it's like sponsored gameplay and sponsored trailer play.
It's a way for game publishers and movie studios to
get influencers and streamers to use their product and share

(05:46):
their product with the community. So, um, they get to
sort of go in to see if it's a game
they like, see if it's a movie they're excited about,
see if it's a TV each other they're excited about,
and then they can take it and share it with
their community and talk about it as a sort of
paid content. Yeah, we're talking with Walker Jacobs, the c
r O of Twitch. Um are their IP issues involved
in people playing other people's video games? So I guess

(06:09):
to break this down down, so you're streaming someone who
you don't necessarily employe who's streaming a video game that
you also don't necessarily own. Definitely, you don't really don't
know any of the video games. So then how do
you sort through all the I P CONTs and are
I mean, I assume all the video game developers and
makers are kind of cool this now because it's promoting
their brands, But do you have to sort through certain
things there? Now, it's all fair use, and it's all

(06:30):
I mean, these are These are people that have either
purchased the game or download of the game, and it's
a streamer that's streaming themselves playing the game. And I
believe that all the game publishers have um decided to
embrace the folks that play their games and support them
as opposed to picking a fight with them and alienating them. UH.
Five G must be a big theme for you as

(06:52):
you look to the huge it's huge. UM. So if
you if you look at sort of how Twitch has
been built over the last six or seven years, UM,
A lot of PC gaming is at the center of it.
PC Uh, consoles and streaming rigs are expensive. UM, it's
sort of a complicated setup. So if you look at

(07:13):
our audience and our viewership globally, it more or less
loosely correlates to GDP in terms of sort of the
concentration of audience we have in a lot of these markets. UM.
I believe the advent of five G is going to
open us up to all income levels, UM, some of
the second and third world markets where where the price

(07:36):
point is going to be different, and even in markets
like like the US, I just think it opens us
up to all new consumers. And when you pair that
with the fact that the game publishers, so many of
them now are launching mobile specific titles. So you've got
pub G Mobile, You've got Call of Duty Mobile, You've
got League of Legends Mobile, You've got uh. I mean
all of these games are specifically built for a mobile environment.

(07:58):
So you know, on our rivals platform ARM, we're now
launching and organizing mobile gaming E sports events and UM.
When you combine five G with that phenomenon, we see
that being sort of a step change in our growth
of of both both streamers and viewers. And what are
some numbers on the growth and the sports real quick?
Oh my gosh, Well, the number of titles UM that

(08:21):
are participating is up. The number of tournaments is in
these hundreds and hundreds and hundreds UM. The several of
the largest game publishers in the world have organized their
own leagues. You've got Activision Blizzard, You've got Riot Games,
which is League of Legends, UM. Epic Games, which is Fortnite,
had their World Cup in New York this year, which
is if the first for them, which was a huge success. Uh.

(08:43):
And then you've got independent tournament organizers that are partnering
with game companies, companies like ESL and others that are
I mean they're selling out arenas, real estate and buildings
are being retrofitted and built specifically for e sports events.
It is you're invading the physical world in a very
and and our brand partners love that they're able to

(09:04):
have physical activations. They're able to have UM you know,
and the players and the fans are able to sort
of interact both virtually on Twitch as well as physically
at the events. UH, they're able to do uh product
sampling and activations and so forth. But really what they're
getting from those e sports UH sponsorships, in my opinion,

(09:25):
is access to I P access to talent entitlements, category exclusivity,
so that they're able to use that, especially for non
endemic advertisers, to have a reason for being in gaming,
and then to activate that more broadly on a platform
like Twitch and others. One more topic I really want
to touch on briefly. VR can I put on a

(09:45):
headset and not just watch someone play a game, but
be as as if I am in the game with them,
so to speak, as r and a game changer there. Uh,
you know, I don't think vr UM exploded the way
some of the hardware companies thought it was going to.
There's a really fun game. I don't know if you've
ever played Beat Saber, I know it, yea, yeah, Beats.

(10:06):
So there are streamers that are streaming some of these
VR games and it's kind of cool to watch. Um,
it's still you know, it's still not a huge thing,
and and it's something that that we're not intimately involved within.
Twitch will be the year of blank fill in the blank. Uh. Well,

(10:26):
I think it's streaming, uh, and I think it's I
think it's live streaming on platforms like Twitch. But I
also think it's the streamer wars. It's gonna be really
fun to watch that playout as far as video on demand. Yes,
Walker Jacobs is the chief revenue officer of Twitch. Thank
you so much, thanks for having me, Thanks for being here.
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