Politecnico di Milano | Pssd Service Innovation
FIRST DELIVERY Service : Twitch TV Nation : United States Of America Year : 2011 - Acquisition by Amazon in 2014 Type of Service: Entertainment streaming platform Groups: Loris Cerrato, Nicolò Orlando, Sruthy Padannappurath, Ginevra Romagnoli
Academic Year 2017-2018
Describe the Service Map Of Offering
1.1 What Description of the service: service aim, Value Proposition, Diffusion
1.1.1
Twitch proposes as the leader entertainment platform for gamers. Its core consists in creating shows about the most famous video-games in the world, both online multiplayer and of ine single player, through a big number of content creators (streamers) and of cial professional tournaments or competitions. A complementary aim to that is to let spectators create community during the vision as if they were all attending the same show together; this is made through a live chat, that the stream page provides. Due to the kind of contents it proposes, the main users’ target is made by millennials, which are the
first generation in history who really grew up in a context where video-games (and especially competitive video-games) were a thing. To make just a quick example about the numbers this platform was able to generate, the last League of Legends world’s final, got a pick of over 1 million unique viewers. In the recent years other strong competitors have raised for twitch like youtube gaming, but the unique value proposition of Twitch is that, they plan to engage and keep their streamers by making it easier to monetize their streams through recently launched programs like Twitch affliate program. They also have options like Twitch extensions which make it easier to involve the viewers in games and work as a better community.
AutoMod tool Chat with streamer /spectator Cheering
Affiliation Program Subscribing system Vodcast
Custom badge/messages
Platform to Stream
Real time Chat
Chat moderators Automatic messages (bots)
Game buying codes and reward
Call/Video call Pulse Suggested contents Clip cutting
Platform to watch
Additional Services
Twitch Launcher Cloud for game progress saving
Describe the Service
1.2 How
Name Occupation Family Age
Description of how the service works: The user journey 1.2.1
The service works differently according to the kind of user that is utilizing it. If the user is a streamer, the platform provides a free channel to broadcast, an automatic system of video quality setting, a system to manage donations from spectators, an option to insert advertise in the stream (paying the streamer), a subscription counter for followers and many minor features. The most important and innovative feature the platform provides for streamers is the affiliation program, which is a system based on the numbers of viewers and subscribers that the streamer is able to generate, and on
that basis rewards him in different ways (mainly economically). If the user is a spectator, he is obviously able to watch the stream, has a live chat to communicate with other viewers and with the streamer itself, has some customization and “retention” options to interact with the stream page, a feed of suggested streams, many features about specific games with the desktop app, and finally a long list of benefits if he is subscribed to Amazon Prime (and then automatically to Twitch Prime), like no advertisements, additional emotes for chat, discounts on games, dedicated contents and many others.
Filippo Pugliatti Student Single 18
Discovery
Play A game online
Visit Twitch website for the first time
He wants to see how professional gamer play in order to learn how to do better and to enjoy the community.
“I really hope my favourite player will win today”
Start Discover watching The chat game option and streaming the huge on twitch community platform
“The Streamer” Riccardo Agostini Game Designer Engaged 27
Discovery
Search A Platform where share
Quote
Awareness
Sees the adv of an e-Sport competition broadcasted on Twicth
Name Occupation Family Age
Motivation
Find Out That Twitch is the Platform more used
Moment of truth
Review
Decide Become Discover Support Rates to buy a moderator Automod favourite the service twitch for his technology streamers of Twitch prime to favourite in chat donating on Amazon get streamer moderator bits as great benefits
Motivation
Quote
He wants to earn online sharing the thing the he knows better, play videogames.
“ Thanks to Twitch i finally combine a job with a passion”
Awareness
Visit Twitch website
Becomes an active user
Decide to strem his own content
Use
Start his own stream
Increase viewers
Earn
Moment of truth
Share
Receive Become Start Promote an email an earning his Twitch from twitch affiliate and Twitch channel on about became a social affiliation full-time media Program job
Costumer Journey Map
“The viewer”
Costumer Journey Map
Costumer Journey Map
Storyboard Viewer turned streamer
Business Model Canvas
Busisness model canvas Key partners
Customer segment
Popular/ well established streamers
Developing better interface Software development
Game developing Cos
Twitchcon convention
Key resources Streamers
Social live platform Streamers can make it a full time job easily
Twitch convention
Gamers
24/7 chat moderation
Game enthusiasts
Money transfer
Most effective chat moderation
Streamers Advertisement Cos
Channels Twitch platform
Softwares Hardwares and office Employees
Cost structure Software Innovation
Maintenance/ taxes Hardware
Revenue streams
Paying partners Paying affiliates
Advertisements Channel subsriptions
Game sales Twitch turbo/ prime subsriptions
Describe the Service System Map
1.3 Who Description of the main stakeholder 1.2.1
The main stakeholders involved in the service system are: spectators, streamers, advertisers and game developing companies. Spectators are the most important source of income in the system “net”: they sustain streamers directly through donations, subscriptions and indirectly by watching advertisements during streams, allowing the best of them to stream as a job, and so keeping creating contents for the platform. Streamers are what keeps the platform going, they are the main “offer” that the company provides to final users (spectators). Advertisers are mostly (but not exclusively)
companies involved in the gaming industry (informatics companies, hardware producers, game developers and so on), who find in Twitch a way more effective and fertile field for their spotlight, compared to traditional medias. Finally game developers are important stakeholders since they get paid with a considerable amount of money from Twitch by selling them the broadcasting rights of their eSports tournaments.
Streamer
Advertisement
Spectator Professional eSport Team
FLOWS TYPES
Information Flow
Game developer c Company
Financial Flow
Labour Performances
Analyse the service innovation
2.1 Level of newness Define the characteristic of the existing market/service and higlight how the chosen services differs. -New to the market -New to the firm 2.1.1
Twitch Tv was new to the global market of video game streaming by bringing in the live streaming idea 7 years ago. The main competitor for Twitch, Youtube Gaming, was started in 2015 and it now has almost all the basic features. To keep its competitive advantage Twitch has started the Affiliate program, which is a program that helps the streamers in monetizing their stream in a much more effective and stable way. This program provides mainly the possibility to get people subscribed to the streaming channel. The subscription is made with a 5/10/25 $
2.2 Degree of change fee, and these money are equally divided between Twitch and the streamer. Also Twitch is superior to Youtube gaming, with its better interactive experience during live streams due to its much advanced chat technology, which is the AutoMod tool: an algorithm able to block or flag inappropriate messages that can be viewed later by a human moderator. Unlike others Twitch also allows 24/7 chat support. As far as accessibility, Twitch stands out again by letting viewers watch and broadcast from consoles like Xbox One which Youtube is not able to do yet. (Game revolution, 2017) These innovations Twitch developed to keep their dominance in the streaming sector, are mostly things that were already well developed in other kinds of markets, but these are still not implemented on other platforms, making the innovations provided “new to the market”.make it easier to involve the viewers in games and work as a better community.
Define the characteristic of the original market/organization/dimension and articulate the depth of change ( how is totally new, addition or improvement?) -Radical Innovation -Incremental -Improvement 2.2.1
The market of gaming streaming has not changed much for a long period from its beginning and for some years on: Twitch was the absolute leader, they simply took the live broadcasting technology and focused it on a specific field of interest, growing till reaching global success; with the interest for the sector of eSports and competitive
gaming growing over and over, and with competitors starting to arise, the company had to evolve and make innovations. Right now there are a lot of other big companies in the live game streaming market and the changes Twitch has brought to the market are both incremental and improvement innovation. We consider the affiliation program as an incremental innovation, because even if consisting in basically only an improvement to the relation between the society and one of their stakeholders, it has a meaningful impact on the organization of the company, since it significantly changes their revenue streams. The AutoMod tool, instead, can only be considered as an improvement to the existing service Twitch already provided. It’s anyway important to underline the fact that this “upgrade” considerably affects the quality of the overall service, since it improves the chat, which is the main touchpoint between the service itself and its main users.
Competitors
Twitch
Youtube Gaming
Mixer
Comparison
PARTNERSHIP
Facebook Periscope
AFFILIATION
Montly Active Streamer 550 k
498 k
484 k
163 k
197 k
171 k 9,8 k 16k
8,6 k 15k
October
November
SMALL STREAMER 12 k 19 k
TWITCH GIVES THE OPPORTUNITY TO HAVE STRONG GROWTH IN SHORT TIMES EVEN IF THE STREAMER IS A BEGINNER
5k
PARTNERSHIP
December
Concurrent Viewer by Platform
736k 788k
281k
Q3
Q4
Q3
308k
Q4
3,3k
5k
Q3
Q4
33k 27k
Q3
Q4
41k
80k
Q3
Q4
Fonte:
report Streamlabs 2017
SMALL STREAMER
THE GROWTH ON YOUTUBE CAN STILL LEAD TO GOOD RESULTS, BUT IT IS MUCH HARDER TO GET VIEWERS AND FOLLOWERS IF STARTING FROM ZERO
Analyse the service innovation
Define which dimension are highly transformed and how 2.1.1
-Concept (typology,offer, business Model) -Client Interface (mode of interaction, touchpoints) -Service delivery system (organizational structure, processes, partners) -Technology The dimensions that got more affected due to the implementation of the new features we are focusing on, are the concept and the client interface. The affiliation program represented a very important change in the business model of the company and in the offer it provides, since it generated a totally new revenue stream (that is completely different from the ones the competitors are using).
This feature generates two different kinds of income, that otherwise would not be possible: first, it allows streamers to insert advertisement in their shows (they can’t if they are not affiliated); since the affiliated streamers are commonly the ones with the highest numbers of followers and viewers, Twitch is able to sell the spaces at higher prices over time, and is also able to share these revenues with the streamers, keeping them loyal to platform. Second, it allows streamers to get subscribers who, paying a fee at the moment of subscription, generate a stable income for the platform, that also in this case shares the money with the streamer. On the other side, the AutoMod tool, was an interesting change in the client interface; considering the chat, as we said before, as the main point of interaction between users and the platform, it’s important to keep it as enjoyable and “safe” as possible. Whoever is passionate about gaming knows that sometimes the community is not the best example of good behavior and the opportunity to contain this problem is surely an important evolution in a key dimension of the service.
Subscriptions
Advertisement
50% Twitch Prime/Turbo
Sale of Games
50%
50%
5%
50%
100%
User
Cheering/ Donation
More User Money exchange
Focus on innovation
2.3 Dimension of novelty
Analyse the service innovation
2.4 Pattern of Innovation Where does the innovation comes from and how? 2.4.1
-Supplier -Clients -Consultancy -Organisation -Paradigmatic change All the technologies Twitch is developing come from their internal teams. In particular they have one team called “Twitch Science Team” that works on deep data analysis and engineerical methodologies to do basically everything regarding the development in all the directions the company is following. Next to that, they are also making this team work with “social science” methods,
2.5 Means of innovation which are kind of comparable to the methodology we as PSS designers are used to (surveys, interviews, and similar kinds of analysis); Twitch Science was developed significantly after the company was acqired by Amazon in 2014. Besides that, we can say that the two main innovations Twitch brought to the market after that moment (Af liate pro- gram and AutoMod) are both client led innovations, since they are strongly based on the analysis of users’ needs. The meeting point between these two different kinds of approach, is “Twitch Developers”. Twitch Developers is a team dedicated to the interaction with the community and the analysis of the feedbacks; this team also has a specfic Twitch channel where they sometime stream and speak about the ideas and the projects the company is working on.
Indicate which kind of resources have been used to operationalise the innovation (mostly human or high-tech) you can add illustrative images. 2.5.1
-High-touch service( introduce new procedures, tranining,hiring,new roles etc -High-tech service (introduce new product, interface, new technology etc) For the nature of the service, that is strictly digital, it’s pretty much obvious that every innovation developed needs a certain component of “high-tech”. The operations on the chat are all based on artificial intelligence, which is developed from very specialized teams, with deep knowledge
about engineering and coding; the payment and donation management system for streamers all go through digital transitions and online banking, so even in this case, the technology part is not negligible. But, with that stated, is also very important to consider the fact that Twitch is a platform based on entertainment and entertainment always has a strong component of humanity and interaction between people. The interesting part about this point of view over the service is the fact that Twitch is basically building a business through interactions between persons, about a specific topic (videogames). As we specified many times, the main offer the company proposes consists in the streamers and in the community, so we can say that this is the high-touch component of the service. Besides that, the affiliate program makes even a streamer who has not reached the requirements for being a partner, monetize easily from their streams. This encourages more streamers to engage in the platform. Hence this service innovation changes the behavior of the users towards Twitch and can be considered hi-touch innovation.
Sources
Analyse the service innovation
2.6 Co-create of Value Who is benefiting from the innovation and how
2.6.1
-Provider -Client -Partners -Society The analysis of the value that Twitch generates from its activities needs to be seen from three different perspectives; the first one is the value for the client/user: Twitch is said to have 665 million viewers, according to SuperData in 2017 (John Ballard, 2017), who are very passionate about the service and are very interested in keeping using it, to receive the best level entertainment and quality gameplay. Since 2015, Twitch also conducts TwitchCon, which is a convention for Twitch users and it has been a huge success. These
3 Sources are evidences of Twitch creating value for the user. The second is the value for the firm: the insane numbers of successful channels that Twitch was able to promote and support through their innovations, allowed them to build a huge user base, that obviously turned into millions of dollars of income. The third one is the value for the partners: in Twitch, streamers are made partners and revenue is shared with them. This is probably the main factor that kept the whole system working at the best level, since many streamers are very proud to be part of its community, because it allowed them to create a job through their passion. Twitch also makes sure that also their “external” partners like for example Activision Blizzard or Riot Games, which are gaming companies, get monetary benefits by partnering with Twitch. Hence Twitch is creating value for the partners.
List of all sources used to create the case study (interviews, academic articles, reports, blogs, magazines, videos, websites, forums,observation, etc.)
3.1
Game revolution, 2017, http://www.gamerevolution.com/features/357779-twitch-vs-youtube-best-site-streaming Twitch Tv,2017, https://help.twitch.tv/customer/portal/articles/2662186-how-to-use-automod Twitch, 2017, https://af liate.twitch.tv/ pcgamer, 2016. https://www.pcgamer.com/twitchs-new-automod-tool-uses-machine-learning-to-create-less-toxic- chat/ John Ballard, 2017, https://www.fool.com/investing/2017/11/26/amazoncoms-twitch-is-dominating-the-game-stream- ing.aspx Twitchcon, 2018, https://www.twitchcon.com/ Inverse entertainment, 2016, https://www.inverse.com/article/21752-twitch-prime-twitchcon-explainer Mingli Zhang, Yu Wang, 2017, Why do audiences choose to keep watching on live video streaming platforms? An explanation of dual identification framework Qun Zhao, Chun-Der Chen, Ho-Wen Cheng, Jin-Long Wang, 2018, Determinants of live streamers’ continuance broadcasting intentions on Twitch: A self-determination theory perspective
Sources
David J, 2017, https://medium.com/precoil/what-is-the-business-modelfor-a-twitch-streamer-f3b9e5351666 Luke Butcher, Ysobel Tang, Ian Phau, 2016, Insights into perceptions of brand extensions of the video game industry Daniel R, 2017, towards a transcription and analysis of live streaming on Twitch Katherine Payne, Mark J. Keith, Ryan M. Schuetzler, Justin Scott Giboney, 2016, Examining the learning effects of live streaming video game instruction over Twitch Nathan Edge, 2017, Evolution of the Gaming Experience: Live Video Streaming and the Emergence of a New Web Community