After committing $100 million to develop original video content this quarter, Amazon has invested a whole lot more in the medium, swooping in Monday with $970 million in cash to acquire the video gaming platform Google had been eyeing: Twitch Interactive. Read the release.
Variety first reported news of Google's interest in May, citing sources claiming it would acquire the streaming video game company for YouTube.
At the time, it reported that "YouTube is preparing for US regulators to challenge the Twitch deal. … YouTube is far and away the No. 1 platform for Internet video, serving more than 6 billion hours of video per month to 1 billion users worldwide." These antitrust concerns could have opened the door for Amazon to swoop in.
Twitch gives Amazon access to live video content and engagement. Amazon Founder and CEO Jeff Bezos said in a release: "Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month…and, amazingly, Twitch is only three years old." In July, Twitch counted more than 55 million uniques and more than one billion broadcasters (from individual gamers to publishers) contributing content.
Twitch positions itself as a social video platform for gamers and offers brands and broadcast media pre-roll ad formats to run prior to streaming content or "regular" ads, which could be selected and played to any channel's viewers through a "Broadcaster Dashboard" at any given time.
In acquiring Twitch, Amazon continues its march to monetize video. The company detailed plans in February around a partnership with premium sell-side ad video ad server FreeWheel to "create a video offering and increase their ecommerce sales at the same time." Although Amazon's initial focus with video was expanding ecommerce ad units, Amazon Media Group's VP of global advertising Lisa Utzschneider said integrating advertising with short-form content ranging from game trailers to how-to videos, would also be a priority.
One of the key questions industry insiders have is, "How does Amazon draw an audience beyond Prime?" Twitch seemingly gives the commerce giant 55 million new viewers.