Video is Impossible - by Jeremiah Johnson

This is the first in a series of posts I’ve got planned on the state of video on the modern web. Video is becoming central to the internet experience on more and more sites and it’s important to understand it.

Amazon purchased Twitch for $1 billion in 2014. In many ways, the investment was an incredibly smart move. Twitch’s userbase has grown by a lot since 2014, just as Amazon thought it would. Its cultural relevance has exploded as well - livestreaming is increasingly mainstream. It seems like every few months there are new records being set on Twitch for the biggest livestream with the most viewers. And because of the Amazon purchase, Twitch has a giant supporting it with the knowledge of how to make money scaling a tech business.

There’s only one hiccup to all this great news for Twitch - they don’t make any money. They aren’t even close to being profitable.

Twitch somewhat infamously loses boatloads of money each year. They laid off staff in March 2023, October 2023, and January 2024 as part of cost-cutting efforts, and staff fear there might be another round of layoffs late in 2024. Twitch is struggling in both directions of the profitability equation. It’s incredibly expensive to maintain hundreds of thousands of simultaneous livestreams to millions of viewers, and they’ve also struggled to monetize that huge volume of traffic, with revenue flat over the last several years. They’re cutting costs in increasingly desperate ways, like not renewing the license rights to custom emotes. Any way you look at it, Twitch is struggling financially.

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