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Amazon looks to broaden Twitch’s scope through music streaming


Nov. 20 2020, Updated 3:43 p.m. ET

Amazon’s looking to broaden Twitch’s scope

Amazon (AMZN) acquired Twitch a few months back for a valuation of around $1 billion. Twitch is a popular website for video game enthusiasts who want to broadcast their games to other people or watch other people play video games in real time.

Now, according to a recent report from the Wall Street Journal citing Amazon, Amazon is looking to broaden Twitch’s scope by allowing users to stream a limited library of music on Twitch. The platform will also allow users to broadcast their music shows and original music to other Twitch users.

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Twitch drives the highest live video streaming volume in the US

Clearly, Amazon is looking to enhance the growth potential that Twitch offers. According to a report from Qwilt and as the chart above shows, Twitch drives the highest live video streaming volume in the US. Its share in this segment is about 44%. Another popular player, ESPN, ranks fifth in this segment. ESPN is owned as a joint venture between Disney (DIS) and Hearst Corporation.

The main reason why Amazon acquired Twitch may have been to monetize this video traffic through video ads. Twitch has high user engagements and commands high ad rates from advertisers. No wonder Google (GOOG)(GOOGL) and Yahoo (YHOO) were also reportedly interested in acquiring Twitch before it was eventually acquired by Amazon. Google may have been interested in acquiring Twitch because it would have complemented its YouTube business nicely.

To get exposure to Amazon, you can invest in the PowerShares QQQ Trust, Series 1 (QQQ), which invests 3.5% of its holdings in Amazon.


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