[jmyeet]

Twitch's profitability is an accounting decision. Twitch's IP was transferred to AWS and became IVS [1]. IVS is sold to other companies like Kick. It's a completely subjective decision of how much Amazon charges itself for use of IVS by Twitch. If Amazon lowered the IVS price it charges itself, Twitch would suddenly be hugely profitable.

All this shows is Twitch is not an Amazon priority.

[1]: https://aws.amazon.com/ivs/

[Barrin92]

>All this shows is Twitch is not an Amazon priority.

I'm pretty certain Amazon didn't buy Twitch so they can subsidize them and effectively run them at a loss. The point is for Twitch to make Amazon money, not the other way around.

[zwnow]

Understandable as it is mostly low effort content. At least by judging the front page.

[liquidpele]

Pretty sure most companies use different pricing internally for stuff like this?

[cbg0]

Why do you assume they pay sticker price for IVS, if they even use that?

[jmyeet]

Where did I say that?

I said that whatever price AWS charges Twitch, it makes Twitch unprofitable. Since this is all just moving numbers around on a spreadsheet, they could choose a different number and Twitch would appear to be profitable.

The point is that Twitch being unprofitable is an artifical narrative not an objective reality.

[rescbr]

IIRC, this was not how IVS and Twitch worked at least a couple years ago.

This was in reverse, AWS was selling Twitch as a product.

Twitch is on Amazon's side of the company, not on AWS.

[jmyeet]

I'm aware. This just further makes my point. Twitch develops IVS. The internal accounting is that numbers move around in a spreadsheet to "pay" for that. Amazon then moves more numbers around to "charge" Twitch for IVS, AWS or both.

You can select one set of numbers that makes Twitch look highly profitable or highly unprofitable with zero bottom-line (to Amazon) difference.

Why I bring this up is that Twitch uses it's unprofitable status to both justify layoffs and to reduce what they pay to creators. They've cut the sub split. Who knows what the ad revenue split really is. AWS is a huge profit center for Amazon. The fact that IVS continues to exists strongly suggests its profitable. If not it would be cancelled. But that profit is being attributed to AWS not Twitch even though its Twitch IP and Twitch employees who work on it.

My point is a completely fabricate narrative is being used to cut costs and thus increase profits.

[rescbr]

As I saw it, still think this is in reverse. Twitch as an org was running at a loss and had some tech and network that could be packed up and sold to enterprises.

AWS, which is the B2B side of the house, resells this as IVS, take some % to pay for sales and integration. Twitch makes a profit on IVS, but IVS alone doesn’t pay Twitch bills. Now the Twitch org runs less of a loss.

This is pure partnership play. With the advantage that the partner is in-house, integrated on the marketplace and can rely on the house sales team as well.

I don’t believe that the tech is not profitable. It’s just that the business of making ad-supported B2C profitable is hard.

If I were to guess, I’d say AWS IVS customers are a really tiny % of Twitch’s traffic, but are the most profitable.

[temdisponivel]

Are you sure this is just moving numbers around?

I would expect there to be legal requirements around anticompetitive behaviour.

Even if not, your comment seems to imply (to me at least) that the vast majority of Twitch’s operating costs comes from paying AWS (implied in this is the markup for AWS, not the actual costs of running the infra).

[epups]

I don't understand your point. It seems that you are saying that this is all an accounting trick by Amazon, but we don't really know whether they "charge" Twitch anywhere close to the costs that it actually incurs.