Twitch\u2019s phenomenal growth since 2011 has resulted from both direct and indirect network effects. First, there are strong cross-side network effects between Twitch viewers and broadcasters: the more viewers come to Twitch, the more broadcasters are attracted to the platform by the prospect of gaining more fans, more subscribers, and ultimately more revenue from advertising and donations. In turn, as more broadcasters bring their content to Twitch, more viewers are drawn to the platform to watch and even interact with their favorite players and teams.<\/p>\n
In addition, there is a second form of indirect network effects involving Twitch and third-party console manufacturers: driven by the large and growing number of Twitch broadcasters and viewers, console manufacturers Sony and Microsoft have chosen to incorporate native broadcasting functionality on Twitch into the PlayStation 4 and the Xbox One. This console integration is in turn driving more broadcasters and viewers to Twitch since the universe of easily streamable content has expanded from PC games to now include console games.<\/p>\n
Last, there are also direct network effects at play. As more broadcasters and viewers come to Twitch, the more interaction takes place in the form of live commentary and discussion among viewers and often even with broadcasters. Twitch has thus succeeded in creating a strong community of gamers who value the social experience of creating, consuming, and discussing game content together in real time.<\/p>\n
Switching and Multi-Homing Costs<\/strong><\/p>\n Although Twitch has built a strong platform through network effects, neither its viewers nor its broadcasters face significant switching or multi-homing costs. Viewers can easily visit other live streaming sites if they prefer, and broadcasters can stream their live gameplay simultaneously on multiple platforms under the same username. Indeed, the largest event in eSports, the League of Legends World Championship, is being broadcast live from Paris this month on both Twitch and YouTube.<\/p>\n Since few inherent switching or multi-homing costs exist in this market, Twitch is now trying to retain its lead over YouTube by artificially creating switching costs in the form of exclusivity agreements. However, it remains to be seen whether Twitch can successfully secure, monitor, and enforce exclusivity with its broadcasters (a difficult task, considering Twitch has over 1.5 million unique monthly broadcasters). If not, YouTube Gaming seems poised for significant growth at Twitch\u2019s expense in the near future.<\/p>\n","protected":false},"excerpt":{"rendered":" As their features converge, Twitch and YouTube Gaming will continue to coexist in an untipped market unless one platform can utilize network effects to its advantage and lock in users through high switching and multi-homing costs.<\/p>\n","protected":false},"author":50,"featured_media":1450,"comment_status":"open","ping_status":"closed","template":"","categories":[628],"class_list":["post-1414","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-twitch-youtube-gaming-streaming"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/competing-with-network-effects\/","yoast_head":"\n![\"LoL](\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/10\/LoL-Championship1-1024x576.jpg\")