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Report: YouTube Buying Twitch.tv For $1 Billion 142

Posted by Soulskill
from the day-for-deals dept.
Variety reports that Google's YouTube unit has reached a deal with Twitch.tv to buy the game-streaming service for $1 billion. From the article: "The deal, in an all-cash offer, is expected to be announced imminently, sources said. If completed the acquisition would be the most significant in the history of YouTube, which Google acquired in 2006 for $1.65 billion. ... YouTube is preparing for U.S. regulators to challenge the Twitch deal, according to sources. 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, and the company expects the Justice Department to take a hard look at whether buying Twitch raises anticompetitive issues in the online-video market."
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Report: YouTube Buying Twitch.tv For $1 Billion

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  • So, my bet: (Score:5, Insightful)

    by fuzzyfuzzyfungus (1223518) on Sunday May 18, 2014 @08:22PM (#47034823) Journal
    For mysterious reasons that will be 'explained' only by spokesweasels emitting word salad, this will become the Big Bad Scary antitrust issue of the day, while the rapid consolidation of physical network infrastructure (despite the radically higher barriers to entry) will quietly recede into the background.
    • by Rosyna (80334)

      Why would regulators care at all about this deal? Twitch isn't a public company.

      • Re: (Score:3, Informative)

        by Anonymous Coward

        Antitrust laws. Microsoft had trouble with them years back. The idea behind these laws is to promote competition between companies, so if a giant tries to buy their only competitor and become, effectively, a monopoly, the government can step in and block the deal.

        • by badzilla (50355)
          I never understood why Verisign was allowed to buy Thawte, who were their only realistic competition.
      • by Anonymous Coward

        Because Twitch already has a history of anticompetitive behavior. Using your market dominance to force streamers to sign exclusive deals isn't exactly legal.
        No-one really cares when Twitch does it but if YouTube keeps up the practice it is not unlikely that Daily-motion will ask EU to do something about it.

      • by sjbe (173966) on Monday May 19, 2014 @08:07AM (#47037127)

        Why would regulators care at all about this deal? Twitch isn't a public company.

        Whether a company is traded publicly or not is irrelevant to anti-trust concerns. The only thing that being a publicly traded company means is that the stock is traded on an exchange. That's all. Many large companies are not publicly traded and anti-trust regulators are concerned with whether the merger will adversely affect consumers and competition in the market. Whether the stock is traded on a stock exchange is completely unimportant to the analysis.

      • I'm not so sure publicly traded has anything to do with it. I'm still not seeing the connection to anti- trust suit it's not like there is a shortage of user content streaming sites. From what I could tell twitch is actually focused on games and game reviews which is more of a nitch site than general user content streaming site. I've never even heard of twitch before now but I have heard of daily-motion, vimeo, metacafe, and veoh. I know there are more sites.

      • More importantly, Twitch and Youtube currently offer mostly different services ... so this adds a new service to Google, it doesn't extend a current one.

    • by TubeSteak (669689)

      I'm slightly confused.... is Youtube buying Twitch or is Google's wholly owned subsidiary (Youtube) buying Twitch?

      The end result might be the same, but it seems to me that how the acquisition is reported should be relevant.

      • by Jmc23 (2353706)
        So... you don't understand the definition of 'wholly owned subsidiary' then?
      • I'm slightly confused.... is Youtube buying Twitch or is Google's wholly owned subsidiary (Youtube) buying Twitch?

        It's a distinction without a difference. YouTube is a wholly owned subsidiary of Google. It would be equally accurate to say YouTube is buying Twitch, Google's subsidiary YouTube is buying Twitch, or Google is buying Twitch. In the end equation they all mean the same thing for all practical purposes. There are some subtle accounting ramifications regarding whether YouTube or Google actually is the the buying entity but nothing you or I will care about in the slightest.

    • I would be surprised if this becomes an anti-trust issue. If it does, then it means Google hasn't been paying off their politicians, or those politicians are trying to shake Google down for more. But Google has been paying off the politicians [opensecrets.org], so no worries there.
  • TwitchPlaysPokemon (Score:4, Insightful)

    by Anonymous Coward on Sunday May 18, 2014 @08:25PM (#47034831)
    Bummer =/

    This channel has been suspended due to multiple copyright claims from Nintendo of America.
    • by Anonymous Coward

      Nah, it's ok, but next game is going to be full of "how is poky formed?"

    • by tepples (727027)
      Nintendo is reportedly far more likely to claim videos in "advertise" mode than in "block" mode.
      • by Georules (655379)
        You might be surprised. They seem to have very little understanding that streams and video content generated by fans is good for advertising.
        • by Krojack (575051)

          SQUARE ENIX is the same way. Their ToS over FF14 videos is pretty strict. They don't seem to be enforcing them right now but they could at any point.

          Do what Blizzard did and allow big flexibility with using videos and images. It helps get the game out there everywhere. Blizzard even had a set of rules on how you can use images for your own personal website for the game.

    • You realize Twitch pulls streams for DMCA complains quite often right? The site lives because the content creators don't complain, when they do their games get pulled. Pretty much the only time it happens is people trying to stream beta or pre-release versions of games.

  • by Anonymous Coward

    it seems like the only one not making a billion dollars these days is me...

  • by Anonymous Coward

    the amount of cash it costs to make live video is not cheap twitch is not really a money maker look at other game streaming sites they all went bottom up becouse of that reason.

    twich doesnt have a ton of users compared to youtube and the biggest streams usually dont do twitch advertising but get sponsorship deals.

    on the other hand google does have the servers available for it so if the rumour is true (which i doubt) it could be cheaper then expected to run the service

    • by Luckyo (1726890) on Sunday May 18, 2014 @08:33PM (#47034879)

      Twitch.tv however has a lot of profitable users. People actually subscribe and pay money on monthly basis, PER CHANNEL and portion of that goes to twitch.tv.

      Youtube on the other hand has a lot of users, but they are nowhere near as lucrative. It comes with twitch's role as a very specialized service.

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        well using numbers from 2013 when i was hanging a lot with streamers twitch pays per 1000 views of an ad between 3 to 5 dollar (depending on the ad shown and the viewer location and other factors) to the streamer most streamers run about 3 ads in a block and do it between 1 to 3 times per hour.

        sub buttons on the other hand is a one time fee per month of 4,99 of which you get 2,50

        ads are actually way more profitable then the sub button for the streamer and for twitch

        sub buttons are also pretty easy to get

        • by Anonymous Coward

          About Turbo, directly from Twitch:
          " Pays broadcasters for invisible ads "

        • by GeorgieBoy (6120) on Sunday May 18, 2014 @09:33PM (#47035185) Homepage
          A couple things:

          - As someone else mentioned, Twitch Turbo users simply removes adds for the viewer, but does NOT affect the channel operator's ad revenue. Users get the "Turbo" icon in chat
          - Channel subscribers get access to subscriber emotes in chat (usable across all of Twitch) in addition to the subscriber icon for that channel, and sub-only chat (if applicable - generally only streamers that have very high simultaneous viewers enable this, to keep chat usable for subscribers).
          - "Transcodes", i.e. quality options of low/medium/high in addition to "Source", can become available when a channel reaches a certain threshold of simultaneous viewers. While having partnership can mean the streamer always has them, it is NOT required for transcodes to become available.
        • There is also a less discussed 3rd option which is called Twitch Turbo which costs the twitch user 8,99 per month gives nothing to the stream your watching, no advertisements and a icon. Most streamers hate the turbo users because they are pretty much paid ad blocking and taking revenue out of the pocket of the streamer. To the defence of those Turbo users they usually get turbo and also buy a subscription to their favourite channel(s).

          You have no idea how Turbo works.

          Turbo gives 100% fill rate for ads. Th

      • by vitaflo (20507)

        As a friend who has over 1 million subscribers on Youtube and streams 20 hours per week on Twitch told me:

        "Youtube is like Hollywoood, Twitch is Indie film."

        Like you I would have guessed the opposite, but Youtube is much more lucrative for the content creator when your subscriber base is high.

    • Twitch picked up a lot of users recently though.

      Between the PS4 and Xbone, both of which can stream and upload to twitch, that's probably at least a million content producers out there. And that doesn't include all the content producers twitch had to band for non-gaming-related content.

      What will likely happen is a lot of that migrates to YouTube - so all those PS4 sex shows that were on twitch will just be on YouTube instead (since the PS4 doesn't, at least I don't think, support YouTube yet for content producers. You can watch YouTube videos, but you can't record with the PS4 and upload to YouTube. Though maybe the last update solved that).

      And gamers will seek gamer content - if you're on the PS4 or Xbone, switching to YouTube to figure out how to defeat that boss is par for the course. In other words, there's a guaranteed audience looking for guaranteed content.

      Hell, I'd like to watch twitch, but the 30 second beer commercials every 30 seconds got tiresome fast. (Especially for crap mass-produced American beer, and I don't drink, so it was wasted advertising money).

      • (since the PS4 doesn't, at least I don't think, support YouTube yet for content producers. You can watch YouTube videos, but you can't record with the PS4 and upload to YouTube. Though maybe the last update solved that).

        The PS4 doesn't support direct upload to youtube directly on the PS4....yet. You can, thanks to that 1.70 update, save to the hard drive, transfer the file to USB storage, then attach that to a PC for youtube upload.

    • by NotDrWho (3543773)

      Well, on the upside, at lest Google has deep enough pockets to afford to pay Comcast/Time-Warner to stream Twitch at a decent rate. Pretty soon the only video most of us will be able to see without constant buffering will be Netflix, YouTube/Twitch, and maybe Amazon and Hulu.

    • by Kelbear (870538)

      Isn't Twitch the official streaming app for the XboxOne? (Isn't there something there with PS4 too?)

      I bet the deals that allowed those service hooks to happen helped lock-in some positive margin on those users.

  • by Anonymous Coward

    I thought only Microsoft and Apple bought companies for their technology? Google is doing it AGAIN?!?!
     
    Where'z teh innovations!?!?!?!!1111?!

    • by GNious (953874)

      Don't worry - they'll innovate this right into YouTube and G+!

      (assuming the rumor of this deal is true, and it goes through)

  • by GoodNewsJimDotCom (2244874) on Sunday May 18, 2014 @09:01PM (#47035019)
    Checkbox: Automatically convert your archived videos to Youtube.com videos permanently?
    • by firex726 (1188453)

      Wish they would, even in the mobile app you cannot watch archived material; if it's not live you can't see.

  • by Sarusa (104047) on Sunday May 18, 2014 @09:10PM (#47035055)

    Since by YouTube's standards, everything on Twitch is a 'copyright violation' (streaming footage of a video game and completely ignoring that most of it is Fair Use with added content) I really have to wonder how they intend to deal with the corporate trolls who are now going to descend on Twitch like the vultures they are.

    I imagine that will involve giving most of the money currently going to the content creators to the copyright asserters. The RIAA model.

    • by Anonymous Coward

      many of the games you see on twitch are endorsed by the publishers, some even have built in twitch streaming in game so at the very least they will retain a huge user base just in those games without any worry. I also suspect most game developers wouldn't attach twitch because that would alienate them more than normal copywrite trolling does

    • by PhilHibbs (4537)

      Same way they deal with the corporate trolls that are presumably all over their existing gaming channels on YouTube. I subscribe to five or six different Minecraft channels, two KSP channels, I've watched several GTA V playthroughs online, all on YouTube, all legit, all generating ad revenue.

  • Embrace. Extend. (Score:5, Insightful)

    by Snufu (1049644) on Sunday May 18, 2014 @09:16PM (#47035091)

    Extinguish.

  • by BitterOak (537666) on Sunday May 18, 2014 @09:33PM (#47035183)
    I know Twitch TV and Justin TV are closely linked. I think in fact that Twitch is an offshoot of JTV and the user accounts are shared. Is YouTube buying JTV as well, will JTV go on independently, or will JTV be shut down?
    • by Anonymous Coward

      This is from February:

      Twitch today announced that Twitch Interactive, Inc. is replacing Justin.tv, Inc. as the company’s corporate umbrella name. Justin.tv will remain as a mature product of Twitch Interactive. The name change comes off of Twitch's continued growth, seeing now more than one million monthly active broadcasters and averaging 13 billion minutes watched per month.

      So I guess it's in the pack.

  • In related news, it appears Yahoo still has cash reserves to spend on more failures.

  • How can it be anticompetitive when its a free service?

    • Re: (Score:2, Funny)

      by Anonymous Coward

      Scintillating logic!

      You should have been on Microsoft's legal team team during the IE anti-trust trail.

    • If CNN bought Fox News, MSNBC, and ABC would there be less competition in TV news? Of course. I don't see how payment or lack of payment has anything to do with whether or not two companies are competing .

      That said, people DO effectively pay for YouTube and Twitch. You pay in the form of ads watched. Google converts those ad views to cash just as surely as they'd convert credit card numbers to cash if you paid by credit card.

      Does Twitch really compete with YouTube? Probably not, but that's because Twitch

  • Maybe google can find a way to make the video streaming less awful. They can hardly make it worse!

    • by EvilSS (557649)

      Maybe google can find a way to make the video streaming less awful. They can hardly make it worse!

      They will just have the automated copyright system flag everything and mass DMCA the lot. But look at the up side: No more buffering or stream delays!

  • by InsultsByThePound (3603437) on Sunday May 18, 2014 @10:21PM (#47035361)

    Back when I was a kid the last millenium (80-90s), a billion as a lot of money. It was a domain that only Bill Gates and a handful of other chosen few were allowed to occupy. Now every damn internet start up is getting a billion each at least, often in the double digits.

    Shit with absolutely no real world business prospects to justify the price they command. Are we in Internet bubble 2.0?

    • Twitch.tv are pretty big. They can get 50-100k live viewers on dota 2 streams, which are typically hours long. That has to be worth something.

      • by EvilSS (557649) on Monday May 19, 2014 @01:58AM (#47036075)

        Twitch.tv are pretty big. They can get 50-100k live viewers on dota 2 streams, which are typically hours long. That has to be worth something.

        Or League of Legends. That game can pull in over a million live viewers at times. Hell the "finals" last year pulled in over 32 million. Most TV broadcasts outside the Super Bowl can't pull that off.

        • by Warma (1220342)

          Million live views for a game stream sounds incredibly inflated. I'd like to see a bit of proof.
          I understand that LoL probably has around 50 million players, but it would still mean, that one in fifty players would have watched that stream. This is a lot, at least when I compare to other big tournaments (Starcraft, MtG, etc.) and the amounts of people they pull in to watch their streams.

          • by Zelucifer (740431)

            They actually hit 8.5 million concurrent viewers in late 2013 for the LoL World Champions in late 2013. 32 million total viewers. They have 26 million players a day, 67 million a month.

            • by Warma (1220342)

              That is incredible. After learning that, I actually had to check what kind of prizes they are dealing out...
              and now I can't even begin to fathom how much money Riot is making.

    • by Anonymous Coward

      If you're not part of the billion dollar club, then you're just a poor millionaire. Make less then that you say? You don't even fucking exist and not worth mentioning anyways.

      The rich are at war with each-other, and the rest of us are just casualties in statistics.

      Good morning gentleman! Have a biscuit on me.

      ~Anonymous.

    • Maybe it really isn't shit today and the US currency has actually devalued this much? Compare it to the Euro (which also devaluated), the price of crude oil, the Japanese Yuen, the Chinese Renmibi, the price of iron ore, the price of gold and a few others to see for yourself. You'll find that you may be right in both cases. Yes, the US dollar has devaluated quite a lot and yes, the prices paid for "strategic acquisitions" are way inflated. A few will get rich because of this and a lot of shareholders will l
      • Maybe it really isn't shit today and the US currency has actually devalued this much?

        I think you may be confused about what currency devaluation means relative to other currencies. The mere fact that a dollar buys fewer Euros than it used to is only bad if you are trying import goods. If you are exporting goods (and we do a lot of that) then it means your products are more competitive. The Chinese have intentionally kept their currency relatively "weak" compared to the dollar in large part because it makes their exports less expensive compared with the competition. Japanese car companie

        • by Richy_T (111409)

          That's a very shortsighted view and brought to you by the same people who tell you that inflation is a good thing as they help themselves to the wealth you earned.

          • That's a very shortsighted view and brought to you by the same people who tell you that inflation is a good thing as they help themselves to the wealth you earned.

            If you think it is shortsighted, prove where my logic is wrong. Show how weakening currencies do not actually aid exports and strengthening currencies do not aid imports. When you do that, publish some peer reviewed papers and collect your Nobel Prize. (because if you actually can prove that you will win one)

            Furthermore, nobody says "inflation is a good thing". Ideally we would want neither inflation nor deflation but that is impossible to ensure for a lot of reasons including because human populations

            • by Richy_T (111409)

              You sell more shit but your shit gets less money. Try telling Amazon they should sell their $100 gift cards for $90 cause they'll sell more.

              The best thing for businesses is a *stable* currency that allows them to plan for future sales, purchases and growth.

              The government is the inventor of pissing on your shoes and telling you it's raining.

      • by AmiMoJo (196126) *

        It's the Japanese Yen and Chinese Yuan.

    • by EvilSS (557649)

      Shit with absolutely no real world business prospects to justify the price they command. Are we in Internet bubble 2.0?

      Twitch is currently profitable and has very real business prospects. They are actually competing quite well for viewers with TV, and that's pretty damned impressive for a site that streams people playing video games. For the young male demographic, Twitch outperforms quite a few of the larger cable TV stations in prime time and they are growing fast. They have very real business prospects, as long as something doesn't happen to derail them. The problem right now is that they are a victim of their own su

    • Shit with absolutely no real world business prospects to justify the price they command. Are we in Internet bubble 2.0?

      Video advertising is big money, which is why so many websites are scrambling to get video content lately. Twitch.tv, with an audience that actually watches commercials, absolutely could be making money, might possibly even be profitable already.

      Really, sometime go check how much it costs per impression for a video ad.

    • by evilviper (135110)

      Back when I was a kid the last millenium (80-90s), a billion as a lot of money.

      $1 Billion USD in 1988, would be $2 Billion today (2014). Not an astronomical difference... Those poor, poor $500 millionaires would be billionaires now. Big damn whoop.

      Now every damn internet start up is getting a billion each

      No, only an extremely select few, and those are the ones you hear about in big stories like this one. Lots of successful startups get bought for far less, and most of it goes to pay off debts, leaving

    • With a 2-3% inflation you get a doubling of price every 23 to 35 years. So 1 billion today is equivalent to 350 million $ in 1980 and 550 million dollar in 1990. So not so "big" anymore.... I used this by the way : http://www.bls.gov/data/inflat... [bls.gov] very useful to compare money amounts.
    • by k6mfw (1182893)
      I remember when ONE MILLION DOLLARS was a lot of money.
  • by Anonymous Coward

    I haven't laughed so hard since Apple bought Beats.

  • by maliqua (1316471) on Monday May 19, 2014 @12:10AM (#47035751)

    right next to that 48.5 billion article doesn't it

  • Maybe it will start to work correctly at last.
  • by thevirtualcat (1071504) on Monday May 19, 2014 @09:59AM (#47037833)

    A Google+ account is required to comment on this DMCA takedown notice.

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