Amazon’s Twitch purchase heralds a new age of creative consumption

It’s enough to make an accountant develop a nervous one. This week Amazon snapped up Twitch, a video platform and community for computer gamers, paying the princely sum of $970m (£585m) in cash. That’s a lot of money for something many people have never heard of – more than three times the amount Amazon spent to pick up DVD and streaming video service Lovefilm in 2011.

But Twitch is something very different. Instead of a provider of films created by large studios for a mass audience, it is a niche platform where the customers create their own content. It has 900,000 unique broadcasters and accounts for 1.8 per cent of peak internet traffic in the US, ahead of Facebook (1.5 per cent) and Amazon (1.2 per cent). Its success demonstrates seismic changes in consumer behaviour and the previously unimaginable opportunities they offer attentive firms.

We are moving into the age of creative consumption. The plummeting cost of making and distributing your own work means amateur has started to regain its original meaning: not a second-rate imitation of professional work, but the mark of passionate involvement.

Take fiction. From the horror mythos Slenderman, composed by enthusiasts of hair-raising tales of so-called creepypasta, to the legions tapping out fan fiction, the world of publishing is being upended by the writers formerly known as its readers.

That challenges traditional business models, but platforms win out when they build and nurture communities that blend writing and reading. Toronto-headquartered Wattpad gets 109m unique visitors a month. Fanfic powerhouse AO3 hosts 1m works from 14,353 fandoms. It has 270,000 registered users and 1m unregistered visitors every day. Amazon’s fanfic platform Kindle Worlds is also doing well. Current top performer is The Seduction, a romance title. Set in the world of HM Ward’s million-selling Arrangement series, it is itself selling 55-100 copies a day based on its bestseller rank.

Instead of mass-produced units that customers must accept without question, we increasingly demand to shape what we consume. Computer games are the perfect demonstration of that desire. A film can be played without you. No computer game is complete until you pick up the controls. That’s why they are so popular. And as Twitch has discovered, those who play are also passionate about watching the best performers really put a game through its paces.

Best of all, if you are a successful host like Twitch, your guests provide their own entertainment. That beats licensing professionally-made blockbusters. And because visitors feel at the centre of the action, they offer not just work made with obsessive passion, but also their profound attention. Twitch is a popular site, reporting 55m unique visitors in June this year.

But the astonishing figure is the length of time its visitors spend watching its content: in 2013, 58 per cent of Twitch viewers devoted over 20 hours to it every week. Amazon has seen the future, and it is owning people’s undivided attention while they gladly work for you for free. That’s worth splashing out on.

First published: City A.M., 28/8/14

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