Data Moddeling and Analysis

INTRO

The phenomenon of Big Data started from the mid-1990s where researchers from the Silicon Valley Graphics International (SGI) have observed an increase in the amount of data collected by organisations (The Massachusetts Big Data Report, 2012). Indeed, the volume of data captured by businesses is estimated to flow around trillions of bytes of information regarding any stakeholders of the business including consumers, suppliers and employees (Mckinsey Global Institute, 2011). The increase of data collection is expected to follow a 40% growth and is guided by the rapid evolution of innovative technology; with 30 billion pieces of content shared on Facebook at a monthly rate and 5 billion mobile phones used in 2010 (Mckinsey Global Institute, 2011). Therefore, data represents a lucrative and fast-growing industry; by having company leaders such as Google, Amazon, Apple, Facebook and Microsoft which collectively assembles US$ 25 billion as a net profit for the first quarter of 2017. (The Economist, 2017).

The focus of the report will be around Twitch and potential database implementations. Indeed, the firm’s management should come up with solutions in order to survive in a competitive market where innovation is a key driver to success; with the help of engineers and data scientists. The report will consider Twitch’s history and model, the market environment, the key performance metrics, as well as, Twitch’s services, our solutions followed with an ERD diagram and recommendations.

HISTOIRE

Twitch used to be a start-up created by Justin Kan and his team, including Emmett Shear, Michael Seibel and Kyle Vogt; under the name of Justin.tv. The main founder Justin Kan, former physics and psychology student at Yale University came up with the idea of pioneering the concept of “life casting” which corresponds to the recording and filming of someone’s life over the internet (Business Insider, 2014). By delivering a new type of product, the San Francisco based internet start-up has created a market niche; hence attracting many investors such as Paul Graham, Y Combinator and Serie A funding. These investments allowed the start-up to grow by raising capital to fund further projects. Justin.tv was re-branded as Twitch in 2007, having a new logo and market segment. Indeed, the platform specifically targets gaming videos, attracting more than 55 million of streamers every month, only for the gaming section.

MODEL

Twitch is a video streaming platform which attracts hundred million of users every month. This high volume of user reflects the fact that the platform stores and comply with a high volume and variety of data (twitch.tv, 2018). Therefore, the data must be processed, stored and analysed efficiently in order to create a competitive advantage over other streaming platforms. The concept of the product proposed by the firm is basically the implementation of video made by individuals which can also be enhanced by a chat session, next to the video screen. The type of video released is vast and includes gaming, TV series, animations etc (twitch.tv, 2018). Twitch’s main value proposition is to enhance interaction between video subscribers and their audience via the online chatting feature. Indeed, video subscribers have the opportunity to develop their activities and promote their image via diversifying their content in a different type of channel; hence leading to the potential gain of network. Therefore, Twitch can be seen as a participant of improving the subscriber’s brand image in a sense. Additionally, the chat feature can help providing some feedback for the video via negative or positive comments or questions at a specific point in time for example. Therefore, both Twitch and its subscribers can adapt their strategy and content thanks to the feedback, thus, helping to build a strong customer loyalty and brand recognition. As a matter of fact, it has been stated that “58% of Twitch users spend more than 20h a week watching videos on its site” (Business Insider, 2014).

MARKET ENVIRONMENT

The live gaming streaming industry is a $3,8bn market dominated by tech giants Google and Amazon who own 80% of market shares through YouTube Gaming and Twitch TV. (Statista, 2018). Like for any other form of brand development social media name awareness is a key strategic objective for businesses engaging online (Fodor and Hoffman, 2010) which is why other TMT firms like Facebook or Microsoft are currently trying to break in this market despite the lack either YouTube’s brand name or Twitch’s heritage in this specific market.

Unlike ecommerce or traditional social media, live steaming platforms have very uneven demographic distributions with specific tastes and a unique gaming universe which implies popular brands like Facebook might be weight less in this niche than Twitch TV. Furthermore, current gaming platforms have the unevaluable advantage of understanding trends in this industry and thus to anticipate them. Few people understood the potential of live streaming when Twitch invested $15 million to expand their e-sport broadcast in 2012 (Tassi, 2013), and today both Google and Facebook are trying to catch back Twitch who just signed at $90 million deal (Christou, 2018).

E-sport is a key driver in the development of live streaming. According to Newzoo, revenues from this industry are expected to rise from $655 mil in 2017 to $1,6bn in 2021 with 60% of sales being concentrated in the US and Korea (Statista, 2018). As of 2016, 281 million unique viewers watched e-sports with at least 34% of customers watched these sporting events on Twitch with Twitch leading the market for the two most popular e-sport games (Statista, 2018) If we assume this distribution remains similar and revenues are highly correlated to viewership, e-sporting events will represent a great opportunity for live streaming platforms to gain loyal customers with Newzoo estimating more than 500 million people will watch e-sports at least on a regular basis.

If Twitch retains this market share it would be able to attract more than 250 million viewers which represents Amazon’s current customer base.

This new market offers great perspective not only in terms of revenues for Twitch, but most importantly of traction and data collection. Tracking more popular games and understanding the demographics of viewers may help Amazon understand that there is not one e-sport population but multiple each of which has a unique culture and very different tastes. The upcoming challenge for streaming

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