Following the data and money in the streaming industry

Jesse Hirsh

easyDNS is pleased to sponsor Jesse Hirsh‘s “Future Fibre / Future Tools” segments of his new email list, Metaviews

StreamElements is a clear pandemic winner

 

Thanks again to those who joined us for our salon this past Tuesday. One of the purposes in holding the salons, beyond the primary one which is to have smart conversations and connect fellow subscribers with each other, has been to play, learn, and experiment with OBS Studio.

We published a Future Tools issue about it in October, and since then I’ve been slowly but steadily expanding my knowledge and proficiency using it. However I cannot learn in isolation, but require context and in some instance immersion, if I am to truly comprehend the value of a tool.

OBS is fundamentally a streaming tool, that is developed and thrives within the flourishing streaming industry.

Amazon owned Twitch hit a new viewership record in October, up 14 percent in one month to 1.6 billion hours of live-streamed video watched, according to StreamElements and its analytics partner, Arsenal.gg. The service’s viewership has nearly doubled since October 2019.

Notably, the record October comes after months of elevated viewing levels during the pandemic, and at a time when many parts of the country were at least temporarily opening back up, said Doron Nir, CEO of StreamElements, a provider of live-streaming tools.

The record viewership also reflected a continuing shift on the gamer-centric site to other topics now lumped under the “Just Chatting” section. That “et cetera” section, once something of an afterthought amid sections devoted to esports and hugely popular individual games, is now likely to be Twitch’s most popular destination for the year, Nir said.

“Just Chatting, Twitch’s non-gaming category, has also crossed the threshold into being the leading category in 2020, which reflects how their massive community of gamers have a lot more interests than just games,” said Nir.

No surprise that said industry has experienced significant expansion during the pandemic. Although the expansion of non gaming streaming is significant. I’d also argue that the audience for that is not necessarily gamers, but new people coming to the platform for that content specifically. Or new people coming to the platform to watch non gamers stream games.

I’ve been spending time lately exploring Twitch, partly to watch how people use OBS, but also to explore how Twitch works, and what the larger ecosystem and marketplace looks like.

While we’ll dig deeper into Twitch and the streaming industry in the near future, let’s spend today’s issue focusing on a key artery or player within it: StreamElements. Note that they were cited in the article above as the authority on what happens on Twitch.

Here’s another clue, check out this “sale” they promoted for Black Friday:

In our data driven era your scooby sense should go off the moment advanced services are offered for free. If you’re not paying for the product, you are the product?

I stumbled upon StreamElements almost by accident. While watching some popular twitch streams, I noticed automated elements of the show, that were controlled by OBS.

For example if a user subscribed or followed the streamer, OBS would have an animated GIF or image pop up on screen as an overlay, featuring the name of the person who just subscribed.

In searching for how this was accomplished, I thought I’d find a set of scripts, or a plugin, which was partially the case. StreamElements produces an add-on to OBS Studio called OBS.Live. This is how users incorporate advanced features and automation into their streams.

However this software is just a trojan horse for a platform within the platform that helps streamers manage data and their aspirations towards a career in streaming.

If you watch a popular livestreamer on Twitch, YouTube, Mixer, or Facebook, it might seem like they are juggling a lot at once. They are often playing a game, talking to their audience, and managing a suite of tools that provide chat interactivity, overlays, and more. But the truth is that software is simplifying a lot of the broadcasting process, and StreamElements is one of the companies leading that revolution.

StreamElements is a platform that provides a collection of cloud-based tools that try to take care of everything around the edges of a livestream. It wants to free creators to create.

Ironically the tweet above is the only instance I can find of anyone sharing this article on Twitter. That’s partly a reflection of how Twitch and Twitter cultures have minimal overlap, however it also reflects the extent to which StreamElements has not received substantial coverage. At least with regard to their core business, which is data and money, or analytics and advertising.

“Up until a couple of weeks ago, it was a service that was shocked that I wasn’t paying for,” said Maya. “I say that on stream all the time. People think that they pay me to say such nice things about them, but I actually just can’t believe that I don’t pay them.”

But now, StreamElements is paying Maya. That’s because Maya isn’t really StreamElements’ customer, she is the company’s product. And it is selling her to brands. But that means she doesn’t have to worry about selling herself.

“It’s a huge load off my shoulders,” Maya told GamesBeat. “With signing this contract, so that they’re my representation, StreamElements is now my 360-degree management. They help me with everything.”

Ya, that’s right. We’re looking at a new kind of agency emerge. StreamElements offers free tools that get streamers onto their platform. Then they provide analytics and channel management tools to help those streamers grow. Those that do, are identified by StreamElements early, and integrated into a talent agency that helps those content creators build a career. All while taking a cut.

The company was founded by a pro gamer and a tech journalist. The gamer found himself managing his friends as their gaming and streaming careers took off, and the journalist recognized that the business model could scale.

StreamElements started because Perry was working as a quasi-agent for livestreaming talent. And agents only take a percentage of the deals they bring in. That metaphor extends to StreamElements itself. The company only wants to take a cut of the deals it brings to creators.

“They’ll bring me deals and take a small commission fee for brand sponsorships that they find me,” said Maya. “They represent me on the business side and legally for sponsorships that they bring. If I get sponsorships myself, they’ll represent me legally for those. They’ll review my contracts for me and make sure that I’m getting the best deals possible.”

By controlling the tools that manage both data and user experience, StreamElements is able to deliver audiences to advertisers via interactive and integrated media. This gives brands the confidence and security their campaign will go as they desire, which is never certain in the digital media marketplace.

But that interactivity is important because it can also provide important data about audience sentiment. Again, because StreamElements controls the entire production of a livestream, it can track how an audience is reacting to what they are seeing.

“All of that data — when we started stepping into the brand world, we discovered that it’s extremely powerful and valuable for those brands,” said Nir. “A streamer does something on stream and you see positive or negative emotes. You can understand if they like or don’t like what they’re seeing. If you do that while you’re showing a new product or a trailer for a new movie, you can provide very valuable real time feedback to the brand on what they’re currently deploying.”

While this article was from a year ago, it does help us understand what StreamElements is about and what they’re trying to do. Ironically there is little independent info available about them. They don’t have a wikipedia entry, and outside of VentreBeat there’s been little coverage.

Unlike many digital platforms, they’re not aggressively monetizing the users who use their tools for free, but instead go after the top streamers as clients for the talent agency side of their business.

Although they have created the infrastructure for users to leverage when it comes to extracting money out of their audience.

And in the last year they have expanded these monetization tools to include merchandising.

If you’re a content creator on sites like Twitch and YouTube, earning a living is a constant grind. Broadcast-tool company StreamElements wants to streamline that process. And its latest feature is its SE.Merch platform for helping creators to host and sell themed merchandise.

Merch is a great way for creators to generate revenue. Streamers often have a relatively small audience of dedicated fans. And products like T-shirts and coffee mugs provide a way for those viewers to spend even more money on a channel. It also makes that audience feel more connected to their favorite broadcasters.

But StreamElements claims that 85% of streamers don’t offer any merch. It says that many people view it as too much work for not enough return. And that’s despite multiple services offering similar merchandising platforms. But StreamElements thinks it can get many of those streamers on board with merch like it does with everything else: by making it simple and free.

“The pain points we were trying to solve for with SE.Merch was to make creating and selling merch quick and easy, while ensuring it was as lucrative as possible for the content creator community,” StreamElements chief executive officer Doron Nir said. “We also made it completely free to use to avoid the negative impact that comes with upselling streamers with gated features. Since this is one of our core products, we will be continuing to add more items and refining it based on community feedback.”

Merchandising is a central element of the digital media industry, as most streamers do not have large enough audiences to make money via advertising or brand deals. Similarly this could be a huge revenue opportunity for StreamElements if enough people use this program.

Of course, “free” doesn’t mean that creators get 100% cut of the merch sales. StreamElements is claiming, however, that it has the “highest per item profit margin in the market.” It also has production located in U.S. and Europe to ensure that products can ship quickly across those regions.

StreamElements is definitely a company to watch, and we plan to explore their platform in greater detail.

Also worth noting that in an era where we rightly recognize that black lives matter, StreamElements is using their power and position in the industry to try and encourage greater diversity in the streaming industry.

This is another area that we can and should follow. How inclusive and diverse is the streaming industry? Is StreamElements serious about this commitment, or is it superficial and tokenistic?

Although what about when that diversity is entirely digital? The other technology I encountered on Twitch was advanced avatars. That apparently can run afoul of copyright laws?

Projekt Melody swears her body belongs to her — the purple hair, the cat-eared bow, and all the barely there clothing that strategically covers her up. She commissioned it from an artist for $5,000 and even kept the receipts as proof. And for her thousands of fans on Twitch, this is what they see when she streams herself playing Minecraft, watching movies, or just sitting around chatting in her room.

It wasn’t until this month that she ran into a problem: the artist, alleging that Melody owed him money, filed a copyright complaint claiming that she didn’t actually own her body — he did. Melody was banned from Twitch.

It’s a strange situation, but one that could become more common. That’s because Melody is part of a growing wave of virtual streamers who broadcast using a 3D model in place of their body and face. The setup offers anonymity for the streamer and huge branding potential around the literal cartoon character they’re inhabiting. The model speaks and moves in accord with the person behind it, but viewers of the stream have no idea what that person actually looks like. They just hear her voice and see her reactions through the model that represents her. In the case of Melody, that’s a skinny anime woman with huge blue eyes, a croptop sweatshirt, and not much else. You can buy clothes, stickers, and pillows featuring her image, though the most popular form of merch seems to be posters of her in explicit poses.

While I sort of assumed they existed, I did not realize the Vtuber milieux was as advanced as it apparently is. Enough to push the copyright debate into new frontiers.

Virtual creators like Melody — a group broadly known as Vtubers — have recently picked up in popularity on Twitch in the US, after first gaining attention on YouTube (thus Vtubers, or “virtual YouTubers”) in Japan a couple of years ago. In August, the top virtual streamers on Twitch, which included Melody, had more than 100,000 hours of viewership each, according to StreamElements and Arsenal.gg. The space got even more attention in September, when one of Twitch’s biggest streamers, Pokimane, debuted a virtual version of herself to her audience of, at the time, 5.5 million followers.

As their numbers grow, Vtubers may face copyright issues that traditional creators — who often just market themselves and their slogans — don’t have to worry about. If a Vtuber relies on an outside artist to create their character, the Vtuber will need to ensure they get all of the rights they need in order to continue streaming as that character, modify that character later, and market merchandise using that character’s image. That means Melody’s artist might have a case: though she can defend herself with receipts, intellectual property experts say there’s little substitute for a clear contract outlining exactly what she’s able to do with her body, even if she otherwise created the character and commissioned the art.

In order to own the character art outright, a streamer would need to have that explicitly written into a work for hire contract, said David P. Swenson, a partner at Patterson Thuente who specializes in IP law. “This is a trap that a lot of people fall into,” he told The Verge. Businesses that hire consultants or independent contractors often fail to write a sufficient contract and later realize, “‘Oh my gosh, the person who created the work actually has copyrights in it.’”

Obviously we have many future issues to mine from this stuff.

Do any of you spend time watching streams? Or streaming? Let us know. #metaviews

And be sure to follow us at https://twitch.tv/metaviews.

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