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Google Buying Twitch Is An Unsettling Thought

May 19 2014, 9:32am CDT | by , in News | Latest Business News

Google Buying Twitch Is An Unsettling Thought
 
 

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Google Buying Twitch Is An Unsettling Thought

Last night, Variety reported that Google is close to a deal that would purchase streaming giant Twitch for $1B. This morning, The Wall Street Journal says that the two parties are merely in “early talks,” and not necessarily close to an agreement yet. Neither Google nor Twitch are commenting on the potential deal, as can be expected when the stakes are this high.

Whether or not the deal comes to pass (and if Google wants to buy something, they usually do), it’s worth exploring the ramifications of the possible purchase. It obviously would be earth-shattering for Twitch, the “ESPN of video games,” which raised $35M in start-up cash just a few years ago, and would now be turning it around into a billion dollar or more payout. But what about how it would affect Twitch’s streamers and subscribers?

There’s plenty of good news that can come out of this acquisition. With access to Google’s unlimited money pool, Twitch could grow in ways it never could before, resulting in better stability, wider reach and more innovative livestreaming tech.

That said, the potential downsides here are even more apparent, and the gaming public is now on edge as this story is unfolding.

Before news of this potential deal, Twitch seemed like something of a monopoly in the livestreaming space, where YouTube has been equally unchallenged in recorded video. When asking who could pose a threat to either service, YouTube was getting pretty good with their own livestreaming technology and seemed like they were starting to encroach on Twitch’s territory. And if Twitch could get a handle on its own player/recorded videos, perhaps they could have hoped to make a dent in YouTube’s armor someday.

But now? If the two became one, all of that would be out the window. Neither would have to compete with the other, and even if they were tackling different aspects of video initially, they’d merge into some sort of invincible uber-portal.

The other immediate issue is what becomes of Twitch’s stable of streamers. How would the YouTube deal affect current contracts with those who make a living streaming games? Even if those agreements stay in place, there could be ramifications in terms of what content can actually be streamed. Specifically, YouTube is notorious for its auto-takedowns and copyright strikes for unlicensed music. Twitch streamers often either play games containing copyrighted music, or they play their own tunes in the background. A sudden switchover to YouTube could result in an iron first slamming down on streamers used to more lax policies at Twitch.

Though Google is a trusted brand compared to most megacorporations, I think gamers and streamers are right to be skeptical of the deal. It does seem rather anti-competitive for two companies who were just starting to butt heads to simply merge, especially so given that they barely had any competition other than each other. And with YouTube’s history of bending over backward to enforce even completely false copyright claims, this doesn’t exactly seem like a match made in heaven.

A few months ago when YouTube was raining copyright strikes on its biggest gaming channels as part of a widespread, misguided purge, there was talk of a possible mass exodus to Twitch if it continued. In the wake of this potential deal, even that sort of desperate move wouldn’t be possible, and YouTube would simply remain the end-all, be-all of video, live or recorded, with nearly no viable alternatives.

It’s possible YouTube has learned from their mistakes and would avoid implementing some sort of apocalyptic auto-copyright claim system with their newfound Twitch streamers. But so far they have not proven that they will stand up for their users when it comes to big media companies (or even scammers) requesting takedowns.

Lastly, in terms of licensing, fans around the world are already expressing their fears that they may go to their favorite stream someday, and be met with the dreaded message, “this content is not available in your country.” YouTube has led the world in irritating region-locking of content, and there’s no way to tell how that could worm its way into Twitch and restrict international viewership for streamers and fans.

Twitch is a site the gaming community feels like they grew themselves, and stream-watching has turned into a national pastime for many in the scene. Seeing it grow from tens of millions in funding to a possible $1B purchase price should be something to celebrate, but only if it benefits the users and viewers as well as the company itself. Recently, we’ve seen tech giants buy up nerdy niche companies and ruin them (Amazon’s recent ravaging of comiXology, specifically), and no one wants to see Twitch share that fate.

Nearly all gamers want Twitch to keep expanding. It’s now branched out to Xbox One and PS4 as a native app, streaming gameplay from consoles with ease. It broadcasts nearly all of the largest eSports events in the world, and has made global celebrities out of ordinary kids who happen to be extraordinary at video games. It has grown to be 1.8% of the internet’s total traffic, behind only Netflix, Apple and Google itself.

If it could continue its current trajectory, with Google merely providing technical and financial support to further its growth, few would object to that. But Google becoming an even larger monopoly in yet another aspect of the web is a worrying notion, as is their past history of overzealous copyright enforcement. If it goes through, there’s a way this deal could work out to everyone’s benefit, but it would need to come with a number of assurances to quell the fears of worried fans.

But first, it needs to be a reality. Hopefully we’ll hear more official news about the potential Google deal soon, so stay tuned.

Update: The Verge is reporting that Twitch has been fielding multiple buyout offers, including one from Microsoft, but ultimately has decided on Google. Sources are saying that the price has been decided, but now it’s Twitch’s autonomy that’s being discussed. According to these new sources, which echo the original Variety report, it’s a done deal.

Follow me on Twitter, subscribe to my Forbes feed, and pick up a copy of my sci-fi novel, The Last Exodus, and its sequel, The Exiled Earthborn.

 

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