Matt and I have been talking with the founders of a streaming platform that is unfortunately closing their doors tomorrow.
We've been super interested and excited about the idea of acquiring them and adding another asset under the Rio umbrella.
We got most of our questions answered on Zoom, we appreciate the passionate community they've been able to build, and we loved the thought of offering another service through @RioStreaming.
After doing due diligence and looking through financials, it's clear that this business model is super hard to be profitable with. It gave me a newfound appreciation for platforms like
@kick,
@Twitch, and
@rumblevideo because the model is so unique. ESPECIALLY in Kick's case, where they are giving creators 95% of their sub revenue.
In most businesses, offsetting costs means bringing in more customers/users. In this space, bringing more streamers onto the platform means more revenue, but the costs go up exponentially to be able to service those streams. It's almost impossible to be profitable unless you get super creative because of the cost of live video.
Twitch and Kick are lucky they have Amazon and Stake backing them and using their respective streaming service as a loss leader for their other products. Stake uses Kick to market their online casino, and Amazon uses Twitch to push their empire of offerings.
All that to say - after seeing financials of a competitor, I now completely understand why Twitch needs to do the sub splits that they do (even still, their CEO said they're operating at a loss), and have a better understanding of what their and Kick's intentions are.
So while we all see streamers grumbling at the way Twitch splits sub revenue, there IS a legitimate reason why they have to do it. It's not ideal, but it keeps the doors open.