Twitch is an American video live-streaming website that offers music, creative content, and “in real life” streams, but its primary concentration is video game live streaming, including coverage of eSports contests. Twitch Interactive, a division of Amazon.com, Inc., runs Twitch.
Launched as a spin-off of general-interest streaming network Justin.tv, it made its debut in June 2011. The website offers live streaming as well as video-on-demand for its content. Twitch’s popularity surpassed that of its general-interest counterpart. With 45 million unique visitors in October 2013, the website was ranked as the fourth-largest source of peak internet traffic in the US by February 2014.
ESPN has featured Twitch broadcasters, most notably Ninja, on its cover. The massive Twitch viewership has contributed to the funding of millions of dollars in prize money for e-sports competitions that have attracted hundreds of thousands of concurrent viewers. In 2022, Twitch has earned $2.8 billion in revenue.
In October 2023, Twitch ranked 37th globally in terms of visits, with 20.26% of the traffic originating from the US. Germany and South Korea followed with 7.08% and 5.49% of global traffic, respectively.
Twitch to make an exit from South Korea
With network connection fees ten times greater than in any other country, Twitch, the Amazon game-streaming company, has announced it is leaving South Korea. Chief Executive Officer Dan Clancy stated earlier this week that “the cost to operate Twitch in Korea is prohibitively expensive,” adding that the company tried a peer-to-peer approach and restricted feeds to 720p.
He said, “While we have lowered costs from these efforts, our network fees in Korea are still ten times more expensive than in most other countries,” adding that Twitch has been operating “at a significant loss” in South Korea as a result of these expenses. “Unfortunately there is no pathway forward for our business to run more sustainably in that country,” he admitted.
Twitch to exit South Korea in 2024 over high network costs https://t.co/Mnir7TBS1f
— Tech in Asia (@techinasia) December 6, 2023
Clancy refers to the South Korean scenario as “unique” in his post, which probably alludes to the fact that the country’s carriers tax large traffic producers to use their networks. Clancy informed the Korean community in a blog post that, after much consideration, they have decided to shut down the Twitch service in Korea on February 27, 2024, KST.
He also thanked the Twitch streamers in Korea for investing their time and support in building the community. He also added that Twitch will help in any way possible for these communities to find new homes, and move to alternate livestreaming services.
The main reason behind Twitch’s exit from Korea is the “sending-party-pays” scheme. In several countries, broadband providers have been pressuring big internet platforms to pay them.
🖥️ Tech Update: Twitch, the popular live streaming platform, has decided to cease its operations in South Korea due to the country’s “sending-party-pays” model, which has resulted in network fees that are significantly higher than in most… https://t.co/Go8iu4ugOI #TechNews
— Mark Stachowski (@markstachowski) December 8, 2023
Sending-party-pays policies distort prices in the complicated peering and transit services market, leading to inefficient traffic management, as companies like Netflix pay mandated costs to have their services delivered the last mile to customers.
Furthermore, there is debate in South Korea regarding network usage costs pertaining to streaming services like Netflix. Foreign players are allegedly causing traffic problems and demanding extra network usage costs, according to local internet service providers. A court battle resulted from this, and Netflix was forced to pay for network expenses related to its Korean operations.