On the other hand, I'd like to point out that Twitch is still losing money so I wouldn't really call their business model "very viable". I'd say it's viable for the content creators, because there's very little risk in trying out Twitch streaming, sure the chances of making it big are insanely small but the worst case scenario is losing time and a relatively small amount of money on a PC setup + microphone and camera.

Patreon is a different beast but there's a caveat here as well. I don't have numbers so this is just my PoV but I'd guess that the vast majority of creators that use Patreon aren't hosting, sharing or creating mainly on Patreon. They're called YouTubers, streamers, bloggers for a reason. Sure they may share BtS or some other kind of additional content but it's not their main platform. So while the Patreon business model works it's not really comparable to Twitch or any other platform where you actually start and continue to create content and also get paid by.

- Twitch is losing money because the costs of running the platform are higher then the revenue

- Twitch is losing money because they're aggressively investing in growth

if you want to know about the viability of the concept, I'm not sure which one it is, video streaming and small payment processing could both be quite costly

One cannot understate how important Amazon Prime (as Twitch Prime) is to the Twitch subscription ecosystem. IIRC roughly half of all Twitch subscriptions are Twitch Prime.

Twitch is aupser aggressive with ads. Youtube has skippable pre-roll ads. Twitch does not and might have 4+ pre-roll ads plus in-stream ads every 30-60 minutes. The ad density Twitch aims for is 4+ minutes per hour. But Twitch doesn't like the subscription model anymore. They've cut the revenue split. Previously many creators got a 70/30% split, now almost everyone gets a 50/50% split.

The big problem is that ad revenue scales in a way that subscriptions don't. Ad CPMs can go up, you can increase ad desnity easily (to a point) and ad revenue scales with view count in a way that subscriptions don't (eg a creator with 100K concurrent viewers won't have 100 times the subscriptions of someone with 1000 CVC).

You're seeing the same trend with streaming services. Netflix killed their basic tier and wants you to watch ads because it's more profitable than the subscription. Prime Video has thinly veiled a price hike by adding an extra ad-free monthly fee.

My point is that subscriptions, or any form of voluntary payment, is icnredibly hard to make work and even the most successful examples, like Twtich, require great effort and a supporting ecosystem like Amazon Prime.

It does that to justify cutting revenue splits (of subscriptions and ads) and increasing ad density. The minimum ad density now is generally 4 minutes per hour.

Example: say I'm Pottery Barn and I sell furniture in the US. I sell a table for $500. It costs $100 to make in China, $50 to ship to the US and $150 in store costs (eg utilities, staffing, rent, amortized capex, etc). You might say I've made $200 profit.

But let's say my corporate structure is to have 2 subsidiaries: PB Manufacturing and PB Retail. The first makes the table. The second manages the stores and sells the table.

If PBM charges PBR $150 for the table then PBM makes $50 in profit and PBR makes $150. If PBM charges $300 for the table then PBM makes $200 in profit and PBR breaks even.

This is what I mean when I say Twitch's profitability is a chosen narrative.

There are many reasons to do this. Tax is a big one. Maybe you pay less tax in China so you prefer to take profit there. Maybe you want to argue stores aren't profitable to resist demands for higher wages or higher rents.

The above is an example of "transfer pricing" or "profit shifting". What's the difference? Transfer pricing is illegal. Profit shifting isn't (within limits; it technically has to be "at arm's length" and other requirements).

https://aws.amazon.com/ivs/

"Use the same live streaming technology and global infrastructure that powers Twitch."

Did IVS grow out of Twitch? Sure. That core is now a piece of AWS infra though, even though the team was initially built at Twitch.

(Obviously these things are weird to talk about in a vacuum, because all the pieces are 100% owned by the same parent. The splits we see can be changed with the wave of a CFOs pen, usually when they want to change how we view some overarching piece of the business.)

Furthermore... isn't this the crux of Hollywood accounting..?

This is totally untrue but keeps getting repeated. Yes, within Amazon, the non-AWS business units pay AWS to use AWS. But they pay cost plus a small percent, not retail rates.

The cost to non-AWS businesses is the same as if they had to do it all on their own (actually a little less since they get to leverage AWS's economies of scale).

The profitability of the other business units is actually improved this way. They would be paying more if they were independent and doing it on their own. This is why Amazon is so allergic to spinning out AWS as its own business.

You have it backwards: transfer pricing is legal, profit shifting is not.

Transfer pricing is the legal term used to refer to the establishment of prices between related entities pursuant to regulations. The transfer pricing regulations were created to cut down on profit shifting.

And we don't know for real how much Amazon is charging them. Rumors are going, Amazon is charging them a hefty amount for servers, while other says AWS is irrelevant for their Service, so nobody knows for real, officially.

But the recent move to a different handling of video-streams is supposed to change this, as it reduce the costs on Twitch's side, and lets the Streamers pay for it themself. By which I mean AV1(?), where the streamer is encoding all streams in all resolutions, and only sends it to Twitch which then acts as a relay. Claim is, Video-Encoding was the biggest cost for them, after employees, which seems kinda strange.. But maybe it will change their game in the next years, we will see.

> Most websites, and indeed open source projects are pretty faceless, and require limited interaction with it's creator

This is ultimately a polite way of saying that the "author" (which can be a content creator, a OSS maintainer) needs to establish a parasocial relationship, use a self-aggrandizing approach, and create drama to entertain its users.

This does work for content creators on Youtube, Patreon or Onlyfans, but ultimately detracts from the mission of delivering quality content that is useful or positively entertaining for the consumers of said content. The fans created in this way can go on to defend your failings or can be taken advantage of in a weakness, as can be seen in the case of the LTT sexual harassment allegation case and the health situation of Physics Girl.

However, I see no way for this to work in an open-source project, because users of an open source project mostly care about the functionality provided. Creating a parasocial relationship is mostly not viable in this space due to limited interaction, as you pointed out.

I've seen a few instances of OSS project maintainers using a chest-thumping, holier-than-thou approach to create drama, and said projects have either mostly become irrelevant over time or the open source project has continued to get attention only because the character of the maintainer has been buried and not well known to most.

You don't need Drama, but you should indeed communicate and deliver something worth the peoples' money. I mean, there are many big and small creators who just steadily and silently deliver their work and have usually no drama at all.

Drama is just popular because it's cheap, fast, and any idiot can create it. So people who have nothing else of worth, tend to live from this.

Entertainers have been doing the pass the hat thing for hundreds of years. It is not a new phenomenom.

Historically, it has generally worked for entertainers, and i guess religion. I don't think there are historical paralells to open source really. Maybe it just doesn't work for that sort of thing.

And when there's 15 people watching, that does enable real conversations.

Maybe that is not the same as pretending to be your friend but then again that mostly applies only to the more extreme end of streamers.

"everyone has relationships with people far away, who inspire, entertain, role models, and also the people we work so hard for: fans, viewers, the next generation, kids somewhere, posterity. I think those asymmetrical relationships are part of what it means to be human, part of the teamwork. Humanity is teamwork. And the asymmetry doesn’t for a second make those relationships any less valid, or less important, or less real"

>And the asymmetry doesn’t for a second make those relationships any less valid, or less important, or less real.

I think that people developing these so-called parasocial relationships is probably not harmful until it becomes a substitute for them developing "real" ones. But I see that growing rapidly, and I think it's a problem in the future.

Not in a author/reader sense, no. But in a social media age where influencers use specific language to appear friendly and familiar? At the very least it's blurring the lines.

Just because something is written in flowery language doesn't make it profound.

I subscribe to one Twitch feed. Actually the main Twitch feed I watch is one I do not subscribe to. I also sometimes watch other Twitch feeds, like John Romero's, or notch, or another random programmer who livestream codes. Again, some tech-related, some not.

Generally I subscribe on Patreon and Twitch more to be supportive than to get something, although I do appreciate I get podcasts from one of the podcasts I subscribe to.