×
You will be redirected back to your article in seconds

Google Seals Deal to Buy Twitch for $1 Billion: Report

Google has finally clinched a deal to buy videogame-broadcasting company Twitch for $1 billion, VentureBeat reported, citing anonymous sources.

Variety first reported in May that Google had reached a preliminary pact to acquire Twitch for $1 billion in cash, in order to augment its YouTube video site.

Reps for Twitch and Google declined to comment.

SEE ALSO: Why Google Wants to Hitch Twitch and YouTube

Twitch was created by the founders of Justin.tv, a website designed for users to “lifecast” themselves with online video. After a growing number of videogamers began using Justin.tv to broadcast their gameplay, the company launched the dedicated Twitch.tv service in mid-2011.

Privately held Twitch has raised about $35 million in funding — meaning the $1 billion deal is a significant windfall for its backers. Investors include Bessemer Venture Partners, Alsop Louie Partners, WestSummit Capital, Take-Two Interactive Software, Thrive Capital and Draper Associates. Twitch Interactive, which includes Justin.tv, has about 130 employees.

San Francisco-based Twitch says it has more than 45 million monthly users, who watch an average of 106 minutes of video daily. Users can upload and watch free, live gameplay videos from Microsoft Xbox One and Sony PlayStation 4 consoles. Twitch generates revenue through ads and as well as subscriptions, with about 300,000 paying members.

Popular on Variety

With Twitch, YouTube could extend live-streaming to other categories, including with multichannel network partners like Disney’s Maker Studios and Machinima, which focuses heavily on the male-oriented videogame segment. YouTube’s own efforts to intro live broadcasting have had limited success to date.

Google and YouTube also want Twitch because it has established a proven model for subscription-based video. A year ago, YouTube launched a paid-channel initiative with 30 partners, including The Jim Henson Co., NatGeo Kids, Nelvana Enterprises and DHX Media. But to date, the pay channels have seen very little traction. Meanwhile, the Internet-video leader — which generates a large amount of traffic from music videos — expects to launch a paid music service in the next few months.

One potential issue with Google’s Twitch deal is that regulators may challenge the transaction if they believe the combination of the No. 1 online-video platform (YouTube) and the No. 1 live-streaming Internet service (Twitch) raises anticompetitive issues. Google’s lawyers have been preparing for such an objection, sources said.

In March 2014, Twitch represented 1.35% of all downstream bandwidth on North American fixed-access broadband networks during primetime hours, nearly triple from last fall, according to bandwidth-equipment company Sandvine. YouTube’s share of downstream bandwidth was 13.2%, while Netflix remained the biggest consumer of traffic with 34.2%.

More Digital

  • Tubi

    Free Streaming Service Tubi to Launch in Mexico in Pact With TV Azteca

    Tubi is heading to Mexico: The free, ad-supported streaming service announced plans to launch in the country later this year as well as a pact with TV Azteca, one of the largest producers of Spanish-language television programming. Under the terms of their deal, TV Azteca will sell advertising and promote Tubi across broadcast and digital [...]

  • CAA's Eric Wattenberg Joins Wheelhouse Group

    CAA's Eric Wattenberg Joins Wheelhouse Group as Chief Content Officer

    Eric Wattenberg, longtime CAA agent and co-head of its alternative television department, has joined producer Brent Montgomery’s Wheelhouse Group as chief content officer. Wattenberg will spearhead content development across Wheelhouse’s TV, film and digital operations, as well as its Wheelhouse Labs branded entertainment wing. The deal is a coup for the company, launched by “Pawn [...]

  • The Simpsons - Disney parodies -

    Disney Mashes Up 'The Simpsons' Parodies of Disney Films, Theme Parks

    Disney has embraced some of the gentle ribbing dished out by “The Simpsons” over the years — hoping to convince more people to sign up for Disney Plus. The media conglomerate released a compilation of what it calls “the best Disney references in ‘The Simpsons,'” which is now part of the Disney empire, with past [...]

  • NATPE 2020 Miami Fontainebleau Hotel

    NATPE 2020: Bumpy Start But Business Is Humming as Conference Begins

    MIAMI — A technology meltdown at Fontainebleau Miami Beach made for a bumpy start to getting settled at NATPE for numerous executives and producers who arrived here over the weekend. Nonetheless, the core business of the content-sales gathering was humming as numerous distributors reported new deals and renewal pacts inked over the past few days. [...]

  • Baby Yoda The Mandalorian

    Disney Plus Set for Earlier Launch in U.K. & Western Europe

    The Walt Disney Co. has set March 24 as the new launch date for Disney Plus in the U.K. and other key markets across Western Europe. With the roll-out previously set for March 31, the streaming service will now be available a week earlier in the U.K., Ireland, France, Germany, Italy, Spain, Austria and Switzerland. Pricing [...]

  • Medici TV Show

    Vuulr Online Rights Market Makes Global Expansion at NATPE

    Singapore-based Vuulr, an online content marketplace for film and TV rights, is expanding from regional to global operations. The move was announced ahead of NATPE, one of the oldest face-to-face TV rights markets, this week launching its tenth edition in Miami, Florida (Jan 21-23). The Vuulr platform is free to use for buyers and for [...]

  • Loic Barche on Short 'The Atomic

    Loic Barche on Short 'The Atomic Adventure,' Upcoming Feature Debut 'Feu de Paille'

    “The Atomic Adventure,” a contender in UniFrance’s online MyFrenchFilmFestival, is the third short from Loïc Barché (“Goliath,” “Le Commencement”). Variety talked to the director about the short, and his feature debut “Feu de Paille.” “The Atomic Adventure,” produced by young French outfits Punchline Cinéma and Leonis Productions, is set in 1961 in Algeria, where France [...]

More From Our Brands

Access exclusive content