
YouTube to Acquire Videogame-Streaming Service Twitch for $1 Billion? - Ocerge
http://variety.com/2014/digital/news/youtube-to-acquire-videogame-streaming-service-twitch-for-1-billion-sources-1201185204/
======
minimaxir
It's worth noting that Twitch partially became popular because it _wasn 't
YouTube_, and gamers could stream without content restrictions (e.g. copyright
and region)

Miraculously, this could end up making YouTube comments _even worse_.

~~~
icehawk219
I think it's important to take notice that Twitch's recent problems (the
buffering problem, chat problems, the delay in general) are problems with
their ability to cater to the big tournaments which causes me to really not be
all that surprised if this turns out to be true.

The ways they've handled the tournaments have really disillusioned many
streamers. I don't know if there's any better way for them to have dealt with
the scaling problems they faced as I can only imagine the work that must go
into supporting a live stream, with real time chat, that has 100k+ viewers
(and for some of the bigger tournaments that's a small number). Something like
a 30s+ delay in the stream makes it very difficult to have real interactions
between the streamer and the viewers which is particularly bad for smaller
streams. For the big guys it doesn't matter as much since their interaction is
less back-and-forth and more broadcaster in style and there's absolutely no
interaction with the tournaments.

The point is that if this is true it really doesn't surprise me at all. And
whether or not it is I think there's definitely an opening for some serious
competition to Twitch by making a service that is essentially an exact copy
but from a business focus standpoint caters more towards the small-to-medium
sized streamer and their audience.

~~~
scawe
Pretty sure the delay in general is due to them moving to a new system about a
year or so ago.

~~~
baldfat
It was to fix stuttering. Specifically in Europe.

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arrrg
That’s sad. Less competition, worse both for those watching and making
content.

Makers of (gaming-related) content for YouTube – worried about the future of
YouTube – have often already been relying on Twitch to provide them some
stability, to stand on more than one leg. This competition also insured that
YouTube couldn’t do literally anything. Makers of content had a place to go if
things didn’t work out.

This is a potentially great move for Google and more specifically YouTube, but
I don’t see any upside for anyone else (ignoring those profiting from the sale
for the moment).

~~~
United857
Don't forget Kamcord, the other player in this space (and another YC company).
Twitch isn't everything.

~~~
mcmillion
I'm an avid gamer and this is the first time I've heard about Kamcord, so
that's must mean something.

~~~
diziet
Kamcord is Mobile Gaming focused first, whereas Twitch is on PC~

~~~
glomph
Who streams mobile games?

~~~
pferde
Who fucking _plays_ mobile games?

~~~
zimpenfish
About 75% of the people on my daily commute.

------
tomasien
Congrats to Justin and everyone involved in Twitch!

As a side note: most of my friends are LoL fans, and I seriously believe
professional gaming will be one of the major professional sports in the next
few years, perhaps on the level of Hockey. They're super normal, social,
extroverted people - yet they'll interrupt a trip to make us watch a LoL match
on Twitch. They all came of it independently too.

I really believe Twitch could have been a big, independent company. They did
what they thought was right and I NEVER want to be that guy that craps on
acquisitions, but I wish this one hadn't happened. I was rooting for Twitch
big time. Still, very happy for them, hope YouTube does this right! I assume
if everyone doesn't Riot (pun intended) the technical chops at YouTube will
actually make Twitch a much more pleasant place.

~~~
mkal_tsr
Same here.

As a user of Twitch, I do not want this to happen. As a person with common
sense, if I had an acquisition offer for $1 billion on the table, I'd sell out
so freaking fast.

------
Maarten88
Compared to recent other aquisitions, 1 billion somehow seems like a bargain.
Twitch has clear potential to play an important role in the future in TV and
entertainment. Compare that to i.e. Snapchat...

~~~
joosters
$1 billion but _all in cash_. Sensible sellers...

~~~
Maarten88
Well, the buyer also happens to have plenty cash laying around in offshore
locations, waiting to be used for things like this.

~~~
arjunnarayan
Can offshore cash be used for acquisitions without being taxed on
repatriation?

~~~
notatoad
it'll be taxed on repatriation, but it doesn't have to be repatriated to be
used. if you buy something with foreign cash, it's the seller's job to get it
into their country.

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dshankar
This is now probably Y Combinator's largest acquisition!

~~~
diziet
Biggest out of any incubator ever, if it happens -- beating out Angelpad's
Mopub being acquired by Twitter for 350M.

------
programminggeek
It's interesting that YouTube is acquiring Twitch and not Google. I realize
that's sort of a smallish point, but it's interesting how that might be
announced officially. Google obviously owns YouTube, but in terms of branding
and identity and control, it's interesting.

~~~
azakai
I think this is not a smallish point. It implies that Twitch will be under
YouTube, and not kept independent in parallel to YouTube inside Google. That
says something about the plans for integration.

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burritofanatic
One summer night in 2007, I found myself playing poker with Justin Kan in a
living room of the "Y-Combinator" building in San Francisco. Emmett Shear may
have been there, but amongst the crowd in the living room was Steve Huffman,
who was playing around with a new electric guitar, and Alexis Ohanian who was
doodling on paper. I didn't know what reddit was at the time, nor did I know
that the acquisition by Conde Nast had occurred -- I only connected the dots a
several years later.

After seeing this headline, I can't help but think that the power of networks
is real, as is the results of deliberate, focused dedication to one's
direction and craft. Pretty awesome stuff, congratulations!

------
tpeng
WSJ confirms talks -- "early stage" "deal isn't imminent"

[http://online.wsj.com/news/articles/SB1000142405270230442270...](http://online.wsj.com/news/articles/SB10001424052702304422704579570601736756672?mod=WSJ_hp_LEFTTopStories&mg=reno64-wsj)

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Nanzikambe
Twitch is massive in the Eve Online community along with other MMOs precisely
because it isn't Youtube and allows streamer to play whatever background music
they chose.

I can a fairly substantial move away from it _if_ Youtube begin applying the
policy that removes all audio, if even a snippet of something copyrighted is
detected.tracks for

------
vdaniuk
If confirmed, this would definitely be a smart decision. Twitch will be
extremely important in ecosystem development as e-sports break in the
mainstream worldwide. Lots of engaged eyeballs.

Google near monopoly on online video market bugs me though, community at large
would benefit from multiple players and more competition.

~~~
korzun
One will argue that 'e-sports' already peaked in 2002.

~~~
im3w1l
As time goes on the non-gamer generations die off. The gamers grow richer and
their willingness to pay increase. The new generations will probably also
game.

~~~
Grue3
You're forgetting that people grow out of gaming. Once you have a job and a
family, gaming just isn't as fun anymore.

~~~
GFischer
It's still fun, you just don't have the time anymore (I feel really bad if I
take out a 3-hour chunk of time to play a game, or a real-time game which
demands 1-hour of continuous focus).

Much as I don't play football anymore but still watch it, I also follow some
games :) and so do many friends in their late 30s / 40s with families (mostly
the same ones as others in the thread, like Magic: The Gathering, League of
Legends, Hearthstone, etc.).

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smoyer
My son watches a lot of Starcraft tournaments on Twitch and his immediate
response was that YouTube might actually improve the infrastructure so that
they could handle streaming to everyone who wants to watch.

~~~
Thaxll
Their infrastructure is good enough, they're able to stream to 180k+ viewers
in HD without problems.

~~~
smoyer
Big tournaments often refuse HD connections and revert to 720p or 480p ...
it's not our Internet connection.

~~~
addandsubtract
720p is HD though.

~~~
winthrowe
Even if it's technically 'hd' 720p is still an ugly rescaling experience.

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tjmc
Wow - what an amazing ride to acquisition. To think it all started when Justin
strapped a camera to his head! Congrats guys!

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owenwil
This is disappointing. YouTube's 'community' is extremely toxic, I can imagine
if Twitch is rolled into it, it'll die a long, slow death.

~~~
thomasfortes
Twitch community is also pretty toxic.

Most of the time the biggest streamers put their chats in sub mode (paying
supporters) to avoid it.

~~~
jewbacca
The Twitch chat is half the value of the stream-watching experience for me.

The "character" of the Twitch chat is valuable. The manically insane hivemind,
with all the juvenilia and "shittiness" that is inherent to it, is a roiling
primordial stew of genuinely worthwhile culture. It's the birthplace of memes
in both the vulgar sense and the higher sense of that word, and, to me, feels
like 4chan in its early days. The ecstatic chaos of the chat during an
unmanageably large event is a unique and deeply valuable thing.

It was why Twitch Plays Pokemon was such a massive phenomenon. Channels which
set their chats to subscriber-only mode are shooting themselves in the foot.

I've always desperately craved a comparable live mass chat experience for non-
gaming-related events, eg during a football game, or a televised cultural
event or major news story.

~~~
addandsubtract
>Channels which set their chats to subscriber-only mode are shooting
themselves in the foot.

I think both chat modes (sub and free for all) have their place and time. I
enjoy chats that are put into sub-mode, just to read a sensible conversation
and have the streamer answer interesting questions, that she otherwise
wouldn't have picked up on. On the other hand, some stream chats live off of
the chaos that is twitch chat.

~~~
jewbacca
Good point. I would amend that to "large events and tournaments with
subscriber-only chats are poisoning their own hype."

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robryan
If they do acquire Twitch I hope that they still let it run separately and
just improve the back end (as while it has improved it still lags for a lot of
people around the world).

I worry if they tried to roll it into youtube that it would turn people away.
Their numbers are pretty dependent on a small number of League/ Dota/
Hearthstone and a few other games casters and steamers.

~~~
kawsper
I agree, Twitch livestreams is unwatchable for me most of the times I have
tried to use it.

Youtube on the other hand, while available, have worked quite good.

~~~
Trufa
It's funny that my experience is the complete opposite, I wonder if it's just
our confirmation bias, or the fact that we are too small a sample. It could
also be that us being in different countries (I assume) impacts a lot in our
experiences.

~~~
kawsper
I didn't provide enough information, streaming from both Twitch and Youtube
works flawlessly from London where I am located now.

------
bobbles
I wonder how companies like Sony feel about this considering a part of their
service is now owned by Google.

~~~
runevault
I hadn't even considered this, as both the PS4 and Xbox One have stuff in the
core system for streaming to twitch (though PS4 also has UStream IIRC). That's
an... interesting wrinkle.

~~~
TorKlingberg
Yes, this could be really interesting. Microsoft's Xbox One has Twitch
integration, while Google refuses to make a YouTube app for Windows phone. I
could imagine Microsoft looking for alternative streaming services.

------
sergiotapia
I hate YouTube with a passion, this is terrible news for Twitch users. YouTube
is absolutely dreadful and makes design decisions that just go against common
sense. This is a terrible loss. :/

Will I still be able to see Twitch streams on my PS4? Blergh.

------
scotty79
Semi-related question... Do you know who came up with an idea of allowing
companies to own other companies (and when)?

~~~
raldi
In most free countries, things are allowed by default. If you want to restrict
something, _then_ the onus is on you to pass a law.

~~~
scotty79
So if I want my chair to own a website and collect revenue from ads it can?
And I won't be taxed a penny since it's not me who earns this money?

------
tomeric
Twitch has rapidly become the site I stay on the longest, mostly for
Hearthstone and Magic the Gathering streams. It's the first time I enjoy
watching a "sport" live. Just a few hours ago I decided to pay for a Twitch
account in order to not see ads, something I wish YouTube would allow me to do
(I don't want to use AdBlock, because I think it's unethical).

I hope that if this is true, it's a feature that YouTube will copy and not one
that will be disabled in the future.

~~~
NicoJuicy
I didn't find pricing on the Twitch site. But for 9$/month (looked it up), i'd
probably pay for YouTube to, if that means more copyrighted content is
available to me with no ads

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dang
Since this is unconfirmed, we added a question mark to the title.

~~~
mbesto
Surely, YC knows whether this is true or not :)

But in all seriousness, shouldn't it just say the original title - "YouTube to
Acquire Videogame-Streaming Service Twitch for $1 Billion: Sources". The
Sources implying it's not publically confirmed, right?

~~~
dang
That headline still seems overstated given that other stories are
contradicting it.

I suppose I should mention that I have zero information about this, other than
what's appeared on HN.

~~~
mbesto
Fair enough - I've just seen the contradicting stories as well. Would this
fall under sensationalist or link-bait then?

~~~
dang
I'm not sure. A lot of this is guesswork.

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Orangeair
Why on Earth would Twitch let themselves be bought by a company that was in
the news just a few months ago for systematically destroying the Let's Play
community?

~~~
gedrap
Let's not pretend, many of us would do the same. Many people would quickly
forget their opinion for $1M. And we are talking a billion. Can't judge those
guys.

~~~
ntumlin
It kind of makes me sad to think of all the bad things I would do/let happen
for $1 billion, or even $1 million.

~~~
scrollaway
I'd do a lot of bad things for a few millions. I do believe I'd spend a large
part of the _rest_ of those billions making things right. I hope.

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KalobT
A lot of people are saying this is a bad move because _insert reason that
contradicts YouTube 's existence_. But consider Tumblr's sale to Yahoo! and
nothing changed. Google bought YouTube when Google has 1% of the internet
traffic. YouTube already had 6% [2006] (and is the worlds most popular site
per unique visitors).

To be honest, I'm surprised MSFT didn't try to buy them first.

------
J_
Does anyone roughly know what Twitch's revenue/profitability is? I know that
they're pretty profitable, but I'm not sure to what extent.

1 billion USD seems somewhat low considering Snapchat was valued at 3.5
billion, and I'm pretty sure their revenues are non existent in comparison to
Twitch's revenues.

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mhartl
Wow, congrats to the Twitch team!

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free2rhyme214
Here's an idea: Google buys Twitch and shuts it down. Thus making people go
directly to YouTube to stream.

But something more realistic is they buy Twitch and then integrate it into
YouTube so everyone has to use YouTube to stream everything. Smart.

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karangoeluw
> Reps for YouTube and Twitch declined to comment.

Yeah. I call this just a rumor.

~~~
objclxt
...a publicly traded company like Google is not going to comment on
acquisition rumors, for many, many reasons. Variety normally has good sources
- if they're reporting it, a deal is almost certainly being discussed. Maybe
it won't complete, but this isn't some random posting on Secret here.

~~~
dublinben
Your comment made me wonder. Is there any site where people (users or editors)
track and check up on predictions like this made by various media outlets?

I'd find it really helpful if I could point to a database showing that Variety
or WSJ had a 90%+ accuracy in predictions like this, whereas another site
might have a 50% accuracy.

~~~
philrapo
Actually, a study on this _just_ came out:
[http://www.bus.umich.edu/ConferenceFiles/2014-Mitsui-
Finance...](http://www.bus.umich.edu/ConferenceFiles/2014-Mitsui-Finance-
Symposium/files/W_Sosyura_RumorHasIt.pdf)

From a 3rd party summary: "...Kenneth Ahern at the University of Southern
California and Denis Sosyura at the University of Michigan, reviewed 2,142
articles written about 501 rumors between 2000 and 2011. Of those rumors, only
167 were followed by a public bid for the company. The Wall Street Journal was
the most prolific publisher of such articles, with 158 during the time period.
It was followed by Dow Jones Newswires with 67 and the New York Times with 38.

“The rumors published in the Wall Street Journal and Dow Jones News Service
are also more accurate than the average rumor, with accuracy rates of about
39%, compared to 33% for the average rumor,” wrote the researchers. “In
contrast, the Los Angeles Times and NYT Blogs have accuracy rates less than
20%.”

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wildmXranat
Time for for Twitch V.2. in my opinion.

There is so much copyrighted material on Twitch streamed by users, whether it
games, music etc that it would throw youtube TM-auto filter into overdrive.

~~~
escaped_hn
Ironically, most copyrighted music on twitch is basically a background process
of a youtube video playing.

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nedwin
Justin Kan = 2 acquisitions in 2014. Not a bad result.

Has anyone else done that?

------
hookey
I know of some Twitch streamers who migrated to Twitch entirely and stopped
using YouTube because of what it had turned into. Where will they go to now?

~~~
jonlucc
If Youtube screws this up and drives away the users, there will likely be an
alternative that rises. That's how Twitch got so big, so it might be able to
happen again.

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relampago
After reading this headline my first reaction was a verbal "aww man!" I don't
really know why. Is it that I don't trust google? Maybe, but I think it's more
that I like supporting the little guy and not the BnL's of the world. When I
hear of an acquisition like this, thinking of Valve, I fear the brands I love
will never be the same.

------
elinchrome
Newbie question here. How can youtube acquire things? Wasn't youtube acquired
by google? So isn't it google acquiring?

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trevmckendrick
Was Twitch a YC company?

~~~
jwecker
Justin.tv was part of the summer 2007 y-combinator batch (with dropbox and
disqus among others). Twitch branched off of justin.tv a few years ago (I
think technically part of the same legal entity at the moment but I'm not
sure- they were trying to separate the infrastructures etc. when I left).
Emmett, the CEO of Twitch, is also a partner at Y-combinator if that hasn't
changed.

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bdz
You now need a Google+ account to spam Kappa

And in before every popular channel gets shut down for copyright
infringement...

~~~
kl4m
You already need to link with a Facebook account to post on the biggest
channels.

------
tomasien
This tweet from a friend I assumed hated YouTube and loved Twitch sums up why
this might actually be a home run
[https://twitter.com/macpheed/status/468237136882597888](https://twitter.com/macpheed/status/468237136882597888)

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cpeterso
Why is this labeled a "YouTube acquisition" instead of Google?

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free2rhyme214
Justin Kan is now going to be pretty rich. Good for him. Congrats!

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Natriceus
My guess is that people who fled from Youtube to Twitch will just move on to
other streaming sites, which in turn just helps to splitter up various
communities even more.

------
firat
Twitch.tv + Google Glass will be interesting.

------
creativityland
This will be interesting given the recent Google Plus integration into
YouTube. Will the same happen to Twitch?

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toastedzergling
I wonder how many more months I have until I'm required to use a Google+ login
to chat on twitch.

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rinon
Does anyone have any other confirmation of this? Seems like a crazy rumor,
but... maybe?

~~~
NicoJuicy
It seems logical, i noticed more articles concerning Twitch. So probably
Google picked that up in their big data analytics.

An acquisition would seem logical then.

------
tyrrvk
curious is Twitch is seeing the writing on the way wrt net neutrality? They
see big fees incoming from the ISP's to stream their content and decide to get
under Googles wing now...

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sjg007
Congrats to Justin and co... including ycombinator. Big exit.

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room271
Surely this is a massive competition concern and should be blocked on such
grounds?!

~~~
ZachPruckowski
There aren't many barriers to entry in this field though. It's not a situation
like a utility/ISP where you can only feasibly have one last-mile connection
due to permits or limited radio spectrum. It's not even something like a
nuclear reactor which costs $10B and a decade before you can flip the switch.

I'm not saying I could build a streaming site in my closet this weekend, but
it's not impossible for competitors to enter the space (or existing
competitors to grow in the space) so long as Google/YT doesn't too anything
too anti-competitive.

~~~
room271
I have to disagree with this strongly. There are significant economies to
scale in any streaming service. For example, in terms of costs (streaming
services require a lot of hardware). But also in terms of branding and
reaching a critical mass in terms of content.

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benguild
Why is this worth $1bil?

~~~
capred
It's the largest streaming site in the world and could possibly be making 10
figures / year. YouTube isn't dishing out money just because they are really
nice people.

------
vecio
I don't know what this means to my startup Shou.TV

