How Twitch Turned Video Game Voyeurism Into Big Business

Twitch  bills itself as a social network for video game fans.
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Last year the analytics firm Deepfield found that Twitch regularly broke into the top four users of Internet bandwidth, trailing only Netflix, Google, and Apple. In August the site attracted 10.2 million unique visitors in the U.S., according to ComScore, up 15 percent from last year. The company says its viewers, 95 percent of whom are male, watch for 106 minutes a day on average.
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Attracting an audience is the hard part. First-time visitors to Twitch contend with a dizzying, kaleidoscopic galaxy of viewing options.  
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This year, 486 million people around the world will watch “gaming video content,” according to the market analysis firm SuperData Research, up 28 percent from last year. The genre now generates $3.8 billion in estimated revenue, primarily from advertising and corporate sponsorships.
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Twitch, which Amazon.com acquired in September 2014 for about $970 million, is the front-runner in this growing market, but it faces a serious challenge from a powerful adversary: Google’s YouTube. While Twitch dominates live-streaming, YouTube is the premier destination for recorded-and-edited gaming clips.
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Twitch has worked closely with video game console makers to integrate broadcasting technology into their hardware. Sony PlayStation 4 owners, for instance, can now hit a “share” button and be up and live-streaming on Twitch in minutes. 
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Whenever a big video game is released into the market, top Twitch personalities, hoping to ride the resulting wave of consumer curiosity, will test it out extensively for their viewers. Video game fans use these early, quasi-reviews on Twitch to help determine whether a game’s worth buying, making the video game studios giddy. As a result, all the major developers and publishers—including Nintendo, Sony, Activision Blizzard, and Microsoft—now maintain channels on Twitch where they orchestrate and conduct live-streams, showing off their wares.
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Once streamers get established on Twitch, they can apply to become a so-called partner. If accepted, they sign a contract with the company under which they get a cut of whatever advertising, subscription, and merchandising revenue Twitch can generate from their channel. There are currently more than 12,000 Twitch partners. 
http://www.bloomberg.com/features/2015-the-big-business-of-twitch/
http://www.twitch.tv/