The way people consume entertainment has changed in recent years. Fewer people are watching cable, fewer people are listening to the radio and more people are watching other people play video games.
Viewers now have access to thousands of movies continuously, to watch live sports on smartphones and stream a wide variety of music anywhere.
Everyone knows “Netflix and Chill,” and it’s no secret that streaming movies has become a mainstream trend. Despite cultural relevance, Netflix isn’t the only movie or TV streaming outlet. Big names like Google, Amazon and Twitter have all jumped into the streaming business, signs of an industry that has become extremely competitive.
“The industry has become cut-throat,” says Dan Rayburn, EVP for StreamingMedia.com and principal analyst at Frost & Sullivan. “But every company has its own different aspect to bring to the streaming table: Apple has the Cloud and the IOS, Amazon has the Android-based Fire OS.
“The customers will always have a choice, but there are definitely different advancements for each brand.”
According to Nielsen’s Total Audience Report, there’s a bump in ‘cord cutting.’ 2.6 million households are now “broadband only,” meaning to not subscribe to cable or pick up a broadcast signal. That number doubled since last year. Many speculate that streaming outlets are the reasons why.
The days of Napster and LimeWire are far behind us. YouTube was a popular choice for people to listen to music, but copyright issues led to a poorer quality of songs. This became an issue for listeners, opening the door for music streaming services.
Launched in 2008 in Stockholm, Sweden, Spotify is now a giant in the streaming industry. Unlike iTunes, which forces users to purchase songs or albums, Spotify lets users select any song they want from a vast library of music for a monthly fee.
According to Spotify’s website, the streaming service’s revenue comes from advertising and payments from the premium plan and 70 per cent of that revenue goes towards the “rights holders”, which are the labels, publishers, distributors and artists included in the music library.
As for sports, there are many streaming options available like TSN Go, MLB.TV and NHL GameCenter.
“With sports being a live event, people want to see it live instead of watching the highlights, so sports were a part of the beginning of the streaming success,” says Rayburn. “Don’t forget that MLB.TV was one of the kick starters of streaming popularity.”
Streaming outlets like NHL GameCenter and MLB.TV make money from advertisements and subscription plans like most other streaming outlets.
Broadcasting a stream is an all-in-one package for sites like Yahoo who earn additional revenue from advertisements and site views. More websites might start buying the rights to televised sports broadcasts to make more money as Yahoo did.
Twitch is a site that allows people to stream their video games straight from the gaming console and it is broadcast to whoever is willing to watch. According to Twitch’s website, in 2015 there was an average of 550,000 viewers.
The streamers can earn money through donations from viewers; the more donations the streamer gets, the more money earned to buy new games and equipment, which allows more frequent streaming. Streamers also gain revenue from Twitch itself , earning as much as 25 per cent of the site’s ad revenue. According to hackerbot.net, every 1,000 views is worth $20 – $15 goes to Twitch and $5 goes to the broadcaster.
“I enjoy watching players that are essentially better in skill play [in] the game so I can pick up certain skills I can utilize,” says Twitch viewer and University of Guelph-Humber business student Jeysen Pious.
“I would consider becoming a streamer because many famous twitch streamers make tons of money through donations and capturing even 0.01 per cent of that multimillion dollar industry can yield a substantial amount of money.”
YouTube is even more of a gold mine for streamers because 50 per cent of ad revenue goes to their users.
One of YouTube’s brightest stars, Felix Kjellberg, a.k.a. PewDiePie, has been making videos for five years now. The 26-year-old Swede is arguably the most popular game streamer on the planet. Along with 42.6 million YouTube subscribers, Kjellberg earned $12 million in 2015, according to Forbes magazine.
As of April 2016, Kjellberg’s 11 billion views will keep on growing, along with his net worth. Not bad for a guy who just yells at a screen all day.