Twitch CEO Dan Clancy wants to hang on to the live-streaming crown
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This is Channels with Peter Kofkin, and we're live from the Vox Media podcast stage at South by Southwest, presented by Smartsheet. I'm here with the Twitch CEO, Dan Clancy. Welcome, Dan. Woo! Woo!

And I'll use my radio voice. Thank you, Peter. It's great being here. It's really super. Do you have people walking around applauding you all day long? No, no. And it's bright, so I can't see who's there. How much do you pay them? Well, it is expensive, you know. All right. I was going to ask who's a Twitch user in this room, but I know some of them work for you. Anyone? Who doesn't work for Dan and uses Twitch? No, most don't work. There's only two people who work for me here. All right. We're going to start really slow, Dan.

I have an idea who a Twitch user is and who a Twitch creator is, but maybe I'm wrong. So you tell me, who is sort of the archetype? What's the demographic of a Twitch user and a Twitch creator? I know you're going to tell me it encompasses everyone. Yeah, yeah, yeah. What's your core user, your core creator? Well, it's interesting. I mean, Twitch, of course, started with gaming.

Okay. And in fact, when it broke off from Justin.tv, Twitch originally, Justin.tv was a general live streaming platform with the idea of I'll just videotape my life. Yes. They were a little ahead of their time. They were. They were. It was like, oh, this would be cool. It got some traction, but it was still niche. And then when they broke off for gaming, suddenly Twitch took off. Interestingly, when they started Twitch, they forbid you from spending more than like 15 or 30 minutes not gaming.

And if you didn't game, you would be, you know, you'd violate our rules. And just so we're super clear for anyone who hasn't dove into Twitch, when you say gaming, it's literally watching people play video games while they interact with the audience. Yes, and let me get to that. I think the biggest thing, in fact, I always start from thinking of the viewers and why are they doing this. And so I'm not a gamer.

which is one thing that helps me in my role because actually sometimes when I'm talking to someone who doesn't know Twitch, I'm talking to myself five years ago. Okay, and the, why do you want someone to play the video game? Is like the most common question. Of course, nobody asks the question, why do you watch someone play football? Especially when they have never played football in their life, right? At least these people game regularly. I think it's actually kind of the same thing that in fact, the same reason we have fascination with sports

is people are looking for community. Like, you know, you're a Bears fan, I'm a Bears fan. And that's why we have that fascination. But when I'm watching the Vikings at home, I'm not in a community. I'm just...

You're watching the Vikings. I'm cursing them. But that emotional connection you have with the Vikings is in part because you feel part of the everyone who likes the Vikings. It's not like because you're so into the nuances of football, you get into it, right? And on Twitch, what it was is people would, well, the video game, someone would play a video game, they liked video games, but really what it was was

was the streamer and the fact that they were letting him into their living room and they would build a connection with the streamer and then with the other people watching.

Okay, and so the way I often describe it is you just want to hang out for a while and you turn on twitch and you see this person that's entertaining does it make more sense if we just call it talk radio but with with video ah Here's the difference if you go back in time with talk radio people would be calling in questions But they weren't interacting with each other what I'll call horizontal interaction Okay, and so it's like talk radio but now all those people that are sitting and listening are

can be chatting with each other and talking back and forth so you feel a connection to the other people watching.

So you've explained the basic concept of Twitch, which is great. I asked you who the average Twitch user is, and my perception is the creator is a young person performing for an even younger group of people. I wouldn't say an even younger group. The interesting thing is it's really aged up where, you know, if you go back in time, it probably was a bit younger, but there's a ton of 25 to 35 or even 40-year-olds now on Twitch. Do you have an average age you want to give me? I don't have one off the top of my head, but it's in the probably upper 20s or something like that. It's not...

you know, it's not like super young. So the idea that this is the same thing as watching people do professional sports or talk radio, I get that intellectually when I go to watch Twitch or I'm not a Twitch user, but when I see something,

I'm just baffled by it. I get what's happening. There's a person playing a game and sometimes doing something else. They are talking while they're doing it. Their audience is interacting with them. There's this stream of commentary that goes too fast for anyone to understand what's happening. The streamer is then interacting with that commentary.

It kind of feels like if I watched it for too long, I would get an aneurysm. Am I just too old to sort of process what's going on? Is this something where you just sort of need certain fast-twitch reflexes to understand? I think what it is is when you do it, you're watching on the biggest channels because those are the ones you've heard of, right? And on a big channel, it is the fact that chat flies by.

The magic of Twitch is on the channels of like, you know, there'll be somewhere between 201 or 2000 or 3000 people watching 4000 and chat doesn't fly by as fast then. Then you can really see chat, you recognize names. And the other thing is you're closer to being on a message. It's yes. And also you're dropping in once.

Okay. Part of it is you come again, again, and again. And the analogy I often use now I'm playing to my own generation is back to the TV show Cheers. I'm familiar. Where everyone knows your name and you show up in a chat room that you go regularly and everybody screams out your name if you haven't been there for a while and says, Norm, where you been? Yep. Right. And you feel like you belong and that they're happy to see you.

One of your biggest streamers, Hasan Piker, someone I'm familiar with. I've interviewed him. He's got a caustic edge to him. He was recently suspended on Twitch. He was making a point about health care. He was sort of extending a metaphor that involved killing Rick Scott, the US Senator. He wasn't calling on people to kill Rick Scott. But he's making a metaphor. He was suspended. Apparently, he's been suspended multiple times.

First of all, how does that work? How do you get suspended at Twitch? Do you get involved when it's a high profile person? Is this automated? How does that work? And how do you get reinstated? Yeah, so first of all, they're indefinite. I'm not indefinite. They're for a given period of time. They're not indefinite. It's sort of a timeout. It's a timeout. It's a timeout, so think of it like that, right?

And all it is is try to make sure people stay within the guardrails, right? And so the idea, of course, is, you know, look, if someone goes outside the guardrail to the level, give them a little bit of time out. So then it's like, okay, I'm going to work hard to stay within, you know, the community guidelines. And we have a team that does that. It's not automated. You know, I'll be aware of their decisions for certain high profiles, but it's not my decision because the whole point is to keep some...

some degree of separation, right? Where they're trying to make what is a consistent decision on the platform.

It seems like it's an ongoing theme for many of your big name folks, that they constantly are sort of-- not constantly, but often are pushing the limits, getting in trouble, getting booted, getting reinstated. And then there also seems to be sometimes a question of, did the streamer say something? Was it one of his fans saying something? Was it someone off camera saying something? Does this stuff get contentious within Twitch when you need to figure out who's actually responsible and what they did wrong?

It's work, but I wouldn't call it contentious. The way I describe it is on a VOD platform, like a YouTube platform, of course, you can edit something, you can take something down. It's hard to sit there and talk for six hours straight. Right, and that's the other thing I said. And not step over line. It's not an hour-long show. It's basically all day. It's six to eight hours. And so to make sure you don't step over the line. And so it is the fact that sometimes people step over the line, and you can't just edit it out.

as you would on a bot platform. So I don't think it's contentious. It's just tricky for both them and for us to make sure it's like, look, we want to keep it within the guidelines. You can't edit it out.

So we have to see when somebody steps over the line and then do something to make sure they're very conscious so they don't step over the line consistently. Even before last fall's election, we were seeing tech platforms sort of rethinking moderation and sort of the rules they wanted around stuff. And they were moving away from moderation in some cases, Elon slash X slash Twitter.

sort of led the way on that, but you're seeing other platforms follow. And now there's sort of, it seems like there's additional political pressure for platforms, media companies, lots of people sort of rethink what rules they have about moderation. How is that coming to affect Twitch? So we're lucky in that we did not, we were,

We were not overly aggressive previously. I think sometimes you had, especially with misinformation and other things, you had this where people moved the line. And we had always kind of consistently said, listen, you should be free to, you know,

Say what you want. It's how you say it. You can't be spewing hate. You can't be, you know, threatening violence, but you could say, I want to take Ivermectin to deal with my COVID and we did. Yeah, correct. If somebody, if somebody said that on Twitch, we did have a policy that if someone is consistently in the sole purpose to be there in the sole purpose of the channel is to spread misinformation, but that doesn't really happen on Twitch.

We don't have the viral spreading of information. In fact, more often than not, what people say on Twitch is a manifestation of what they hear.

through the other platforms. So someone might say, oh, I read a Facebook post the other day that said this. So you've always been sort of looser than some of the other platforms. And it doesn't seem like the Jim Jordans of the world are going after you and subpoenaing you and asking you to explain why you censored so-and-so and not. Is that because, again, because it's just literally a different platform or is it because they don't even know what Twitch is? No, I think it's because we've been pretty...

We have not been getting into that space. We, in general, have not waded into censoring. People talk about Twitter as a town square. Twitter's not really a town square because it's someone that just spreads all over the place. In a town square, either you're in the town square or you're not. On a Twitch channel, either you're watching the channel live or you're not. If someone doesn't want to watch the channel, don't watch it.

It doesn't algorithmically suddenly appear in their feed in any of that. You show up, you watch a channel. If you don't want someone watching your channel, you can ban them and stop them from watching your channel. So you don't feel like you've had to sort of recalibrate anything sort of since last fall? Correct. I mean, we're always making what I'll call micro adjustments. But what you've seen in the market are more macro adjustments. And we have not had to make a macro adjustment. Are there people who intentionally try to get banned because it generates more attention? I don't know.

I don't think they intentionally, I mean, it affects their livelihood, right? It is fair that they get a little bit of attention, but I don't, in general, no. I was watching Hasan Piker's YouTube video about his banning, and then I saw a video afterwards, and that was the most attention I've ever gotten on YouTube. I had a million views for that video where I was explaining what happened and apologizing, but not really apologizing.

Yeah. The interesting thing is whenever there's something controversial or something like that on Twitch, far more people watch it on the YouTube video and then they say, "I can't believe this happened." And it's like, well, it's been on YouTube. You're not complaining about it being on YouTube and you're watching all this on YouTube. Yeah. I was going to get to this later, but let's talk about it now. So often when I encounter Twitch, it is off platform.

A YouTube clip, increasingly I'm seeing clips on TikTok. Sometimes they are from the creator's account. Oftentimes they're sort of been hijacked by somebody else. And it seems to me that one, that sort of makes sense.

and that creators are actively saying, "We want our stuff to live lots of other places. We can't just be on Twitch." But it also seems to underscore your competitive challenges, which there's a million places to consume video, period, and also live video, right? For a long time, Twitch was literally the only place to watch live streaming.

All the other platforms have some version of it now. So how do you think about the sort of competitive set for live in general and and then and whether or not you want to pull back from that or lean into it? Yeah, I think the mistake that people often make is they look at the medium they use and not the need they're they're serving in a user so by that you're a journalist and

You write, okay, or you used to. Now you talk. I still do some writing. Thank you. Businessinsider.com. But people don't confuse someone who writes a blog with a novel. You're using the written word as your medium of communication. So live streaming is your medium of communication, okay? Twitch...

I use the phrase community-centered live because on Twitch, people pull up a chair and stay for a while. On the other platforms, they have live, but you watch for a little while and then you swipe. And then you swipe because you're programmed not to stay for a little while. Everyone here is kind of stuck watching this show because they walked into here. They're happy to be here. Well, if we get boring for a little while...

They may walk out, but most of them will stay until we get interesting again. Please don't leave. Okay? Because they don't have related talks that they can just click and hyperlink to another talk and hyperlink to another talk. So on all these other platforms, they can actually jump from one talk to another talk to another talk. And they encourage that, right? They encourage that. What doesn't want you staying there all day? Not only encourage it, when you're watching a VOD, they program you to do that. So they program you after you're sitting for a while. Something's wrong. I've been in here for 10 minutes. Let me just check another one.

Whereas on Twitch, the whole site is designed for live. So what I've said is the difference between Twitch and so many of these other platforms

is our focus is on building a live community-centered experience. And everyone that has used the other platforms, we've had a bunch that YouTube signed big contracts. They went over there. Pretty much every single one that signed a big contract to YouTube, once their contract was over and they weren't being disproportionately paid, they came back to Twitch. And they all consistently said, it's because we missed the community. And that is what's so magical.

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And we're back. There was that period in the pandemic where a lot of people discovered Twitch and/or a lot of people spent a lot more time on Twitch for all the same reasons people spend a lot of time on other digital services during the pandemic. And then there was this rush from YouTube, Microsoft, Facebook, saying, "We want to basically build our own Twitch. We're offering huge contracts to some of the biggest Twitch streamers, paid them giant, giant deals."

They basically have all sort of retreated from that business. They've all said we're they've all realized they're still doing live Yeah, they realize it's it's not something where it makes money to lose money on this their hope was I'll lose money on this creator but all all these users will come and when that creator left which there was another creator ready to step up and

and become the next big thing on Twitch. Kai Sanat, who's the biggest streamer on Twitch now, you know, sort of other folks leave and that Kai Sanat or Jinxy or these other folks, they fill that void. Okay. And so, yeah, they said, no, this doesn't work. We're not really, you know, pulling from Twitch. So why do we want to keep losing money on these deals? So from the outside, I look at your competitors popping up deep pockets.

And then walking away and you can either say, well, that just proves that Twitch is the best version of this platform. They can never compete. Or you go, maybe they decided this is just business is not worth it for them and they can get a better return doing something else. That one would be more alarming for you. This is what I'd say. I mean, it's absolutely the case that the VOD business like TikTok and YouTube is a great business.

That's because you watch that when you have five minutes between here, five minutes there, and you add up the five minutes, you get stuff. So it's a great business. I mean, it's bigger than our business. Their thought was, oh, well, this will be on top of our business. And they still all have live. It's not like they pulled back from live. They just realized, oh, we're not going to sign these big contracts. And they were paying these people much more than what they were organically making. Tens of millions. So they haven't pulled back from live.

They've pulled back from signing money losing deals. And then when you pull back from that artificial injection of capital, Twitch, because it focuses on live, they go, no, I'd rather be on Twitch in that case. You put out this, you do an annual letter this year. You said we're going to make it much easier for more people, more creators to make money.

We're going to sort of lower the thresholds you need to stream for a certain number of hours, have a certain number of concurrent users, whatever it is. We're going to make it easier to make money for more people for Twitch. YouTube, 2018 or so, sort of went the opposite direction. And they said it's going to be much harder to monetize on YouTube. I think part of that was they wanted to get some content sort of off their platform or not be giving them money. But also...

I think they thought, and it seems like it was true, that they would actually make more money if fewer people were participating. But the pie would increase overall.

How are you thinking about sort of going the other way? So YouTube is a different business. YouTube is predominantly an ad business. Okay. So they're kind of choosing how they distribute. Ultimately, how much ad they get is how many ads they can sell. And they're figuring out how to distribute to that ad money. So I think part of what they were deciding was they want to distribute the ad money that they're getting a little higher up the chain. Okay. In terms of the creators. For us...

About two-thirds of our money comes direct from our viewers in terms of what we call subscriptions. It's different than a YouTube subscription. We can talk about that. Patronage, gifting, things like that. Someone's saying, I like what you're doing. Here's some money. Yes. Okay. So smaller creators are not competing with bigger creators for the limited number of ads.

And so what it does is you have someone who says, I want to play around with this idea of live. We want to make it so that when they get an audience more quickly, can they start getting support from that audience, the patronage, the emotes, everything that comes, we want to make it that it becomes much quicker for you to just, it's working right away. Twitch has been around for a while. Amazon has owned it for more than a decade. Why make that decision this year? What does that tell us about Twitch? I don't think it tells you anything about right now. Sometimes these things,

We could have done three years ago, but we're doing other stuff and we just didn't like say, you know, oh, let's do it now. Early on, one of the reasons we needed to do it was fraud is always something we have to watch out for. And when you let people make money more quickly, then it opens doors for fraudsters. We've gotten better and better at catching them. What's a fraudulent live streamer look like?

They're moving money around without a big audience a lot of times. They create fraudulent viewers and fraudulent other things, right? The whole thing. It's not somebody building a community. It's just somebody figuring out a way to exploit our platform, which can happen. And we've gotten really good at detecting people that are finding ways to do that. You know, lots of technology. So we now feel like we have the ability to let people monetize right away and we can control those threats because we have lots of ability to do that now.

Pause for a second. Dan and I are going to talk for a while, another 15, 20 minutes. And then if you guys have questions, we're going to allow you to ask questions. I think there's microphones somewhere around here. So think about great questions and we'll come back to you because you'll ask better questions than I will. There was a period, I don't know, seven-ish years ago where...

Twitch was on the radar of media companies. Remember the NBA was saying they thought that the way that they would be producing broadcasts in the future would be sort of a Twitch-like broadcast. They had demos, so it was a basketball game going on with all the sort of Twitch stuff on the side. It doesn't look like that ever took off. Is that the media company saying, actually, we're not really ready for a Twitch-like experience? Is it the audience saying, we're not ready for that? How does Twitch feel about that? It's...

I think it's people misunderstanding what is so special about Twitch. So let's take music, which actually there's a ton of musicians on Twitch. But sometimes you had this idea of, oh, I know, we'll put music on Twitch, we're going to film the concert. And so you take one concert and you film it. The creator isn't interacting with the community online.

It's not distinctly different than what you can watch in a VOD. And it happens once, so the people are not building community amongst themselves. The musicians that use Twitch

They often use Twitch with more to engage with their audience and community and doing whatever they do in their free time. The poster child example is T-Pain, who's a big musician who streams on Twitch all the time. I'll like chat with him and hang out with him on Twitch. And he games on Twitch. He does his sound recording on Twitch. He like, once I was, I, I,

I was streaming and I kind of knocked on his door and we started streaming together and he just said, oh, last night I finished my new music video I'm putting out. Let me premiere it right here. And there was his new music video and he just played it. And so the point is, it's not about taking traditional media and sticking it with chat next to it.

That doesn't create community. That is just traditional premium media with people chatting alongside, which they already do on Twitter. So was that the NBAs of the world misunderstanding Twitch, or was that Twitch trying to sort of move beyond gaming and figure out other ways this could work and then realizing it didn't work?

No, I think so. Moving beyond gaming works. I think whether, how much of it was Twitch versus the NBA and everyone, I think what often happens when you have two things, your first instinct is, well, let's just do this but here. Okay. And that wasn't,

what was magical. Okay. Let's make Fortnite, but then add in a different adjective. Well, so I'll use a concrete example. You know, let's take sports. Okay. The thing that's been working a lot in particular in Europe and Latin America is you now have a lot of folks that build communities around teams that then have actually sports talk radio talking about it, which isn't just having the sports. It's all of the shoulder content. And then there's a group called, it's called Kings League.

It's a soccer league and they basically created it all for live interactive viewing on Twitch and What they do is they have a set of players that get drafted They're not the best of the best but they're good players and then they add in two or three named players okay, that are like retired and then they've spiced up the game some and then each team is owned by a creator and

And it's been a huge success because they get the audience and the people watching involved. They're actually watching a basically minor league soccer game. You're basically watching a minor league soccer game, but it's designed for kind of interactive entertainment. When they do their draft...

They draft players and then you're able to steal players and you have money. They almost gamified it. So you don't think that would work if you just said, look, let's take the biggest teams in the world, Liverpool or Man United or whoever, and let's overlay. There is a community. There's huge communities around these things. You don't think that would work? I think what would work is you have somebody who is, if you take one of the big, it's not one community on Liverpool.

It's probably 15 communities. It's 20 communities. It's 30 communities, right? Or if you take, let's take U.S. sports because in the U.S., you know, in other words, you certainly can have a group of avid fill-in-the-banks, you know, Saints fans or Bears fans or Eagles fans or something like that. But you need to capture that. And it's probably not just one community, right?

There are lots of sports bars in Philadelphia that are watching the Eagles and each of those bars are a little different. So it's not one, it's multiple communities of personalities that then gather people around to watch. - So as you know, in part 'cause you worked at YouTube, but also 'cause you know what's going on in the world, when you go to basically any other platform, there's an algorithmic discovery where the platform is giving you stuff that it thinks you want to watch and/or that it wants you to watch.

doesn't really exist on Twitch. How do I find the thing that I want on Twitch and why don't you more aggressively push stuff towards me? - So interestingly, we do have all those algorithms too. - Sure. - Okay, and when you go, we have those algorithms. Now on the mobile app, we have a feed.

The difference is this, okay? When you're watching, when you have a 45 second clip that they pushed you, if you don't like it, swipe away. You don't like it, swipe away. Because the unit of consumption is small, okay? Finding a channel you like on Twitch, I liken it to finding a friend.

It takes a while to figure out you like someone as a friend. And the analogy I use is suppose you have two people who don't know each other. And then you say, "You two should get together sometime." But you don't do anything with them. The odds that they get together, that's like a home page. Someone walks out of this room and says, "Oh, I heard about Hasan Piker or Kai Sanat. I'm gonna watch them." Right.

So they may go and watch, but they're probably going to need to get exposed to him on YouTube and these other ones. Short form video. Most of our viewers that build affinity for someone, they get exposed to them on other platforms. So is that how people are finding their favorite Twitch people is outside of Twitch? They often... One of the things, do you know how you said competition with short form? Short form isn't our competition. One of our big focuses this year is making it easier for our creators to find the cool stuff happening

and get it on every platform. And so just like you will get little snippets on Instagram,

right, of some conversation. And then that's how you drive them to the whole podcast. Here, you get little snippets of this creator. You see it in your feed on YouTube or TikTok or Instagram. And then it's like, oh, let me check out. And then you want to go hang out there for a while. I make podcasts. I talk and I write. And increasingly, it's very hard to get the big platforms to send people to my podcast, to my websites where they can read my words. And we've all sort of realized that

belatedly, oh, we really can't depend on the platforms to send traffic to help us acquire users. It might work in some cases, but we can't rely on it. That seems like a vulnerability for you guys too. Actually, we're almost like the opposite. Once you get an audience on Twitch, you keep it because they're there for you.

Okay, the difference is on, let's just take Spotify, right? Their affinity is with Spotify. And then your content happens to appear in their feed. But they're going to Spotify. When they come to Twitch, they're coming for the creators. Someone who goes to Twitch regularly will watch four to eight creators in a week.

Because there's the creators they like so then you can retain them better because we're not moving them So you're not worried about a scenario where? Elon Musk decides that he wants to have his own live streams And it's gonna make it either harder for the Kaizen outs to be on his platform or more likely harder for him to send traffic and users not worried at all not worried at all because obviously he's gonna want the Kaizen odds to be posting short stuff and

And the Kai Sinatsa are gonna say I want to be but I mean Kai's a perfect example where Tons of folks were trying to get him come over here and he's like no like I want I'm gonna build my community Kai is the star You know tick tock is the star on tick tock, right? Kai is the star on Twitch. The creators are the star and

Okay, and when people are coming it's because they form a bond with that creator and they come back for that creator prior to this interview I was asking people who actually spend time on twitch and and one thing I would hear Repeatedly is it it was sort of vibes base but if they're like it feels like twitch's cultural moment has come and gone that it's regardless of what the actual numbers are like it seems like

It seems like the live phenomenon is happening on other platforms more often. I know you're gonna tell me that's not the case. But explain why people are misunderstanding that. Yeah, I mean first of all, it's you know, I'll go back to in terms of oh, it seems like the live phenomenon is hanging on other platforms. If that's the case then all these Twitch streamers that left Twitch for YouTube wouldn't have come back. There was a period where I remember I said if you you know what the one thing that top 10 live streamers all have on YouTube?

They all started on Twitch. Okay. And then got a deal and went over and then those 10 all came back. Right. But you don't want to be the farm leagues for YouTube. But they all come back. In other words, it's one thing if they go because that's where they want to stay. There was an artificial incentive. Right. And then they all came back. Okay. It is the case that live as a medium of interaction is growing, which is good for us. Our problem has never been we don't have enough of the market.

Our problem is we want the market to be bigger. We want more people to understand the magic of live. I often say this, the best thing for Twitch is TikTok investing heavily in live. A couple years ago, you became, when did you become CEO? How long ago? Two-ish years ago. Two-ish years ago, you came on, then you had cuts, and you said, we're not making money. That's why we have to make the cuts. Again, Amazon bought Twitch for a billion dollars in 2014. Yeah.

It's kind of shocking to hear that between Amazon's resources and Twitch's cultural cache that it wasn't making money a couple years ago. Is it making money now? So I don't talk about where we're at now. Okay. But when you say it's shocking, not that shocking. Uber didn't make money until I think last year. Yes, but they were in a different business, right? But YouTube was making money.

Not right away. Oh, no, I was at YouTube 2010 to 2012 and at that point we understood it and I like it was somewhere in the middle when YouTube finally decided to focus on that because before that they were investing so for a long time YouTube was not profitable Okay, so I don't think it's that strange. However, I think the key difference is and I don't think this is unique to twitch I think this is this is an issue in the tech space and

In the tech space, there was this mindset of build your organization,

for where you're going to be in three or four years. Okay? And I used to be at Google. They came out of Google in part because Google was lucky enough to have a money machine in the back of the house. Almost from the get-go. From the get-go. So YouTube made, Google made money like from the very beginning and it was all... And not just money, like enormous. Enormous. And it was all funded by this. So everyone else, then it's like, oh, grow, grow, grow. And get a big team, get a big team. And to be honest, part of what happened to Twitch

They kind of fell into that at Amazon. The Twitch team, when they first got there, they were very scrappy. And then people would come and say, no, no, no, that's not the game here. You have to argue for more resources. You have to argue for more resources, okay? And having been in big tech, that is the game. How do you argue for more resources as opposed to how do you figure out what is the number you need to like...

serve your audience and your community. And so we're just like many other folks in tech, we were just not running the business as well as we could have. - I'm gonna open this up to the audience in a minute, but I do wanna ask you about your background. We've mentioned it briefly. You were at YouTube, other parts of Google. You started out at NASA. Can I say you were literally a rocket scientist? - You can say it. - Close enough. You did AI. - I was an AI guy at NASA. - You were at Nextdoor. You said you're not a gamer.

don't really look like you're a core Twitch user. How did you end up? I'm just saying, I'm just saying we both don't look like the core Twitch user or creator. Um, how did you end up running Twitch? I know that you were the COO and moved up, but how did you get to Twitch? So I, I left next door and I was just taking some time, kids and whatnot. And it was interesting because Emmett reached out and was the CEO at the time and reached out. And, um, uh,

interviewed me and then he offered me the job and I said no. Because? Because I said, you know, I'm not a gamer and at that point,

I thought Twitch was, oh, it's a gaming platform. That was what was in my mind. And I thought, oh, it's a gaming platform. Then like four months later, he came back and said, Dan, we really think you're the right person. And the timing was a little better. Again, I'd been enjoying time with the kids and whatnot. So I said, yes. And the main reason was I hadn't had this revelation about Twitch. It was more I realized the things that I've always enjoyed is working with people I like working with. So I would always tell myself,

a story about how I'm changing the world. When I was at Google, I did Google book search and we're scanning all the world's books and I would weave poetically about what a difference I was making in the world. At NASA, we talk about search for life, at YouTube, democratization. I always had these great stories. Really, I enjoyed it when I was working with people I liked. And so I said, I like this team, let me go work there. And what I realized when I got there finally was, oh, Twitch isn't about gaming at all.

Twitch is about community, and of course at Nextdoor it's doing community, and it's also about performance. One thing you didn't mention, I was a theater major undergrad along with computer science. I did not mention a theater major, my apologies. I realized there's this whole world I could have lived that was more about performance, and what I realized is Twitch is this, somehow the universe found a way to weave this other half of my brain

together with my tech and community because what it brings together is my tech and business and all that with my community with kind of, you know, Twitch is really interactive performance art live. And so it's sort of this perfect synergy that I kind of lucked into. We'll be right back with Dan Clancy, but first a word from a sponsor. Support for this show comes from Smartsheet.

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Smartsheet customers know that Smartsheet is a distraction-free zone. Smartsheet is the place where work flows. Learn more at smartsheet.com slash vox. And we're back. I have more questions, but I want to open it up to the audience. Do people have questions for Dan today?

Don't be shy. I think there is a microphone. Yes. Thank you. We can't see very well. So I can hear me. Hi, I'm Jane from a marketing agency in Dublin in Ireland. I was just wondering what advice you have for brands that are moving maybe from those more traditional

spaces for live communications into Twitch? What is the big message for them? It's a great question. I feel like she's a plant, but she's not. Okay, so I'm going to talk for one brief second about brands and what they're trying to achieve. Ultimately in brand marketing, what you're trying to build is emotional attachment to your brand so that when you see it, you react and you feel good about the brand.

Often you advertise and do things to try and get transference. You do it on the Oscars or a sporting event or whatever because someone's feeling good and they see your commercial so that emotional connection transfers. As I said, Twitch is all about emotional connection to the creators. Okay? And so what you're trying to do is find a way to create that transference. Okay? And...

you have a lot more emotional, the viewers of the Twitch audience are a lot more emotionally connected. The way I describe it is if there's a streamer you watch on Twitch and they don't stream for a week, you know it.

If someone stops creating content on YouTube for a week, you have no idea because there's always some other player there. So my high-level thing is, and we do a lot of this, is trying to get brands to understand how to create some authentic engagement with the creators. I also encourage a lot of brands to think about what content do they have that they might put somewhere, but then they want the creators engaging with it.

Because the foundation is you want to see that connection where someone has an emotional connection to this creator and then your brand is kind of appearing in some way there. And then that

turns into that emotional connection. If I'm a high profile Twitch star, can I do a direct brand deal myself and you guys don't participate in that? Absolutely. Absolutely. So, you know, all of our, you know, all of our, even big and even the interesting thing is we have a lot of torso creators that, you know, make a significant amount. And it's, it's interesting when I tell the story of some of the torso creators, which I'll do for a second, because for a lot of people, they just don't realize they think gaming, right?

Okay. But now like Kai does game, but most of his stuff is more lifestyle. But, you know, I'll use just examples off the top of my head of these people that are funding their life. There's a pizza princess G who runs a pizza shop and she almost looks like a Disney princess. And what she does is run a pizza shop every day and chats with her community. Um, there's a, uh,

husband and wife that were science teachers at a university and they then started streaming and talking about science. There's a paleontologist. And there's ads that are happening while they're doing this? Yep, yep. There's a paleontologist who goes on dinosaur digs and this is how he funds his life. He used to be a university professor and there are like 20 other examples that I could give you of these folks that are just doing like all sorts of things and

But they build a community and they find these people, they find a connection there. And so some of what we do isn't just about the big creators. It's about how, because that emotional connection is strongest often on those torso creators, right? And you just want to get five, 10, 15, 20 of them. And that can be very effective.

yes hi my name is uh patrick o'keefe and i'm the chief integrated marketing officer at elf beauty we are a brand that's super active which uses twitch we do every week we stream with our uh amazing uh she's a makeup art global makeup artist um my question is more so around how can brands start to monetize on the channel here would be my suggestion

There are various different ways where Elf could start monetizing. And we're actually going to be doing some things so that you can capture buyers right at that point. But we probably, as opposed to just on your channel, because you only get a certain amount of viewership on your channel, part of your whole point is everyone else engaging.

So one thing we're looking at is how to help brands to get direct monetization on the platform. But to be honest, I think the biggest thing is building that emotional connection. And so you have to be careful about getting a few dollars here

when you can get a lot more dollars by you build that connection so that they're like emotionally buying elf everywhere else so i think a lot of what y'all are doing actually is the right type of thing you know just live commerce which we keep hearing about it's gonna be the next big thing it's big in asia it seems like maybe it's catching on but i'm not really sure it's catching on in the u.s is that interesting to you here's the thing that we've learned we've we've

you know, played around with that because everyone said, "Oh, it's big in Asia. It's going to be big here. It's big in Asia. It's going to be big here." And I've dug into this many times also while I was at interesting even before I was at Twitch at Google. It turns out one reason it's big in Asia is they don't have as much trust in online retail as you do in America. And the people that are selling there are actually retailers.

And that you trust them to make sure the good gets to their house, okay, that it delivers and all that. And in the U.S., you don't have that problem. Everyone trusts buying things online. And so in general, people in the U.S. are getting like affiliate fees. Whereas in general in Asia, they're getting retail margins because they actually are retailers. So I don't think it's going to be as big, you know...

Obviously, TikTok is investing a lot in shopping. And I think part of that is they're trying to make sure that creators can find a way to make money directly from their platform because most TikTok creators make their money from endorsements and stuff like that. TikTok's not sharing meaningful revenue with them. The revenue share for TikTok is 0%, 100% for their normal stuff.

But I don't think it... And they're obviously spending a ton on shopping. But I don't think it's going to be the same as Asian because of the way the margins works. I do think there are ways of getting it more situational, but it's not going to be like Asian. Gotcha. Question here. Hey there. I'm Michael. I'm just a person. I'm a person too. What's the world? We're both here. When I look at...

Larger companies, especially these types of platforms, I have my meandering question. I think it's really hard for many of these companies I like from avoiding this growth at all odds. I look at Etsy and it's really sad. And the companies that have remained focused on their...

I guess core values are tend to be outside of the belly of the beast of Amazon or big venture. I think about like itch.io, a small gaming platform, but it's just a guy in the end. So he doesn't have to make decisions that other people's want. How do you protect the kind of the heart of the company from not doing time on site or other, you know? Yeah. Yeah. How do you keep? So first of all, let me, I want to say this, that I'm,

uh one of the things that happens sometimes you know growth itself creates problems because more people are enjoying this and it's always nicer to have this cool little thing that just you and this small group like the way i always look i think that's great but i think live streaming and community experience is like

very impactful on people's lives and so it's a good thing that more people are doing it because you're having a bigger impact. Now as soon as you get bigger you do have to be very clear of where you came from. That's one reason why I repeatedly say the creators of the foundation of Twitch and it's live community-based streaming. That it's not trying to be someone we're not, okay? I will say one thing that happens is whenever

you have to make some difficult decision. Often our brain goes and explains that because they're big now or because they're owned by Amazon, because that's the explanation that our brain gives us as the, and a lot of times it may not be the reason. Okay. It's just, you don't come up with that reason when the small company does something you don't like, you don't blame it on now they're getting big. So I do think it's something we have to be very clear about and very conscious about where did we come from?

And what is the foundation of Twitch? And that's why I continually say we are a live community centered streaming platform. The foundation of Twitch are our creators. That's where the emotional bond is. And then we just have to keep that as our North Star. It's an inherent tension though, right? Like you are owned by a giant company. They spend a lot of money on you. They want you to make money. And you want the creators to help you do that.

Right. And so you do have you've got different incentives you give them and you want them to spend six to eight hours streaming to have this much audience. How do you balance that with the tension, with the fact that these are real people? This is difficult work, even though it's just sitting and talking. It's a it's a real strain for them. How do you how do you balance sort of your.

just basic growth and profit imperatives with the fact that these are real people who are both depending on you and working their ass off for you? Well, first of all, you mentioned one thing about depending on me. I spend a lot of time with creators. When I became CEO, I started streaming myself and I still stream regularly where I do stuff just to experience and then I spend time with streamers. And one thing that I think a lot about is how much they depend upon us.

because they need Twitch to be here 20 years from now. I mean, you take someone like Coke Carnage, who was like one of our biggest streamers back in, you know, the 2010s, and he's still a big streamer, and he's got three kids, and this is his career. If for any reason, and it's not like he can go to another platform and do what he does on Twitch. There are other live streaming platforms. It's not the same. We focus on live streaming, you know. His kids are still young.

He's planning on doing this for another 30 years. It's not like if something happens to us, he can't put in his resume, oh, I'll now be an IT professional. He was an IT guy. And so we have an obligation to our creators to make sure we're here 10, 20, 30, 40 years from now. And I take that very seriously. Now, the interesting thing is we're a platform that allows them to do what they feel is right for them. And the good news is, as like all UGC platforms,

all UGC platforms are built upon this idea that we're all creators. Okay? It used to be, oh, the movie makers, but I'm not a creator. Everyone in this room is a creator. Everyone in this room has the ability to creatively express themselves. And so... But most people are consuming, right? Most people are consuming, but interestingly, everyone can create. So...

As with any platform that depends upon the creative expression, there's always an excess supply of people who want to use it. Actors, musicians, artists, every single one. There are more people who want to be an actor that can be an actor. There are more people who want to be a live streamer, more people who want to be a YouTuber. So as a UGC platform, the good news is there are a lot of people that want to use our platform. So then that makes you to make a choice for yourself.

Maybe you were streaming six to eight hours a day, four or five days when you were 24 and then you're 30 and you have a kid and other things. And so now you want to do it two to three hours a day. Great. That works great for us.

You're not going to demonetize them? Say you had a deal but you needed to be working for six hours. No, not at all. This was one of the problems. There was a period where we gave these contracts with minimum guarantee and all that. And YouTube luckily actually for their core product stayed away from that, right? We have a rev share deal. You stream less, you get a rev share, you decide. We get our rev share, you get your rev share, you figure out how that works in your life.

To make that choice and so no we're not gonna put them pressure at all It's like you choose and we have a lot of streamers that end up the thing that works so well about twitch is You can sustain an audience. Maybe you're not like the big, you know at the top of the billboard But you have a very loyal audience that still shows up and the interesting thing people used to think that oh well It's gonna age out

People don't age out of watching Twitch. Just like people don't often don't age out of their, you know, now when you ask about the age, there are a lot of 30 somethings that spend a lot of time watching Twitch. Let's hear it for the loyal audiences. We've got a few questions over here and then we'll let you get out.

Hi, my bad. Hi, I'm just a normal person. I kind of grew up on Twitch and I grew up watching a lot of like really independent women, either gaming wise, talking about dropping knowledge, a lot of that kind of stuff. I feel like recently in the past few years, and even on Hassan Piker has talked about it where

As much as you talk about the creators and supporting creators, no matter what you're creating, there is this very big wave of

Unfortunately, people who are very explicit content and they're not really getting much pushback from Twitch. And a lot of content creators who have done it for a while have gotten demonetized or kicked off of Twitch, like Hasan Piker or Sweet Anita, who got banned off of Twitch because she has Tourette's and she accidentally said a slur because someone said it in a chat.

she has Tourette's so she can't control what she says sometimes because it happens. So a lot of those content creators who do the right stuff and then they have that kind of pushback and they have to redeem themselves for it, but then you have a wave of people who do have very explicit content and it's very hard for the women creators on Twitch to really

be able to push back on those chatters who were pushing that onto them to do that same content. So how do you see Twitch dealing with the new wave of things and how to protect the, I guess, the old content creators who are really just there trying to do what they want to do and not be pushed in the corner of like, well, there's this new wave of

like this explicit content coming out to Twitch of people doing that kind of stuff. How do you... So you've touched on a bunch of different issues. Yeah, I'm not bad. Let me quickly mention just like Sweet Anita, who's someone I did a stream with, interestingly. I didn't know she had Tourette's when I was doing the stream with her and then we talked about it. And that was something that those things will happen where somebody doesn't understand something and she was...

reinstated when that happened. So, you know, that's the nature of this. Sometimes somebody does something and you reinstate them. And, you know, it's interesting you talk about a new wave. I mean, this is a challenge in the online world, okay? And one thing that we're very clear on, because the interesting thing is

different women will express themselves in different ways, okay, in choosing and engaging with their audience and their community. And the big thing is you want to make sure they don't feel like they need to do that. And one thing, knowing a lot of women streamers that do not do anything like that, a lot of them are in Austin, I think actually they're doing, you know,

They're doing great and we have a lot of policies to make it so that if you're getting pressure or anything like that Then you can control your community. So it's something we have to stay very, you know conscious of and this is the nature of the online world I think women creators have to deal with this in the online world and I'm very conscious of The challenges that women do you think that's more challenging on a platform? That's gaming centric I think if you go in the past and

I think that was more of a challenge. I don't think now, it's not more acute on Twitch than on other platforms. I think this challenge that women can be harassed and, you know,

you know, people coming after them and giving them a hard time. I think unfortunately... Definitely exists everywhere. It exists everywhere. I don't think it's actually more pronounced. I do think with live, right, it's a little more, you know, it's a little more in their face. And that's one reason why we have a lot of tools that allow people to decide who can watch them, right? Because that way if someone, if you don't want this person watching them, you can stop them from watching you. And now even if you ban them, they can't even watch you. Two more questions quickly.

I'll be very quick. Hi, I'm Chelsea. I'm a creator on Twitch. One of those women streamers I refer to in Austin. Thank you. Appreciate what y'all do for safety. But I wanted to ask, because it's a vested interest for me, what is Twitch's success metric for this year since you discussed opening the market and making it bigger for us? Yeah, this is what I'd say. As opposed to the success metric, and Chelsea, I know well, brings up this interesting question

what I'll call point that I'll turn into this tension that we have. We, of course, we have metrics about trying to grow. We want to make it easier for creators to make more money from the audiences they have. As you know, we do a lot on collaboration and other things. The thing that I always, it's always a challenge as a leader is in a big company, so often you're focused on metrics around growth.

Get bigger, get bigger, get bigger. And so often that causes you to lose focus on the magic that is happening every day for people that are showing up, right? So if you're 1% smaller, that means 99% of what was happening yesterday is still happening, okay? And so I guess what I'd say is one of the things that I, and it's a good example is you take a creator that happens for every single one of our creators. They get caught up in growing.

But then it's so easy to forget about those people that are showing up every day, provide the foundation. And so for me, I always try to be careful of not getting obsessed with a growth metric because all sorts of stuff we want to do.

But in the end, we have this responsibility of serving those community members and those creators that show up every day and fund their lives. But you can't tell Andy Jassy. I'm not so obsessed with growth metrics, Andy. Of course. We have all sorts of metrics that we have with Andy in terms of that. But as we talk about me talking to the creators and that sort of thing, part of this is anyone who's created, they realize there's this challenge because we are programmed to get caught up in numbers.

So I'm a streamer. I don't like it. I don't make any of my money from Twitch. I donate all the money from Twitch. Obviously, I don't make a lot, but I'll still stream. And afterwards, I go and open my email that tells me what my average concurrent viewers were, which is a metric. And I'm small. Mine's like 200 or something like that.

And I feel better if it's 250 or 300 than if it's 200. Even though I run twice, but emotionally I'm like, oh, okay. And we are programmed to kind of look at numbers. And of course, all sorts of apps

Program you to get obsessed with numbers and often in a way that is psychologically harmful So I guess one of the things that I say is twitch is about community Don't get too obsessed with just looking at a number where you feel good if it's up a little bit And you feel bad if it's down a little bit when you are ignoring all the magic that sounds like very good advice That's impossible to take but yeah, we will leave it to this person for the last question. I

Yeah. Hi, Aaron from Hungary, creative technologies. So totally different topic. You got these ultra long form contents for it full of information, time coded user commands. It seems like a goldmine for machine learning. Do you have anything in mind regarding these like ready to take this monetize that started sold it for you, for example, open to research or something like this?

Yeah, so... Is Twitch going to be an AI engine? Yeah, so it's actually... I'm going to use this to talk about the whole question of AI because I think... Isn't there something in the contract that we have to talk about AI? Otherwise, it gets... We'll both be kicked out. Also, you literally have worked at AI. But we walked out. So I'll use this. Yes, there's lots of text...

So I think that what's really interesting is so much about AI now is focused on what I'll call the facts and the higher level reasoning. But the thing that makes us uniquely human is of course the emotional connection that we establish with each other. And I do think it's very interesting the ability for a streamer or creator to extend that emotional connection

by using AI either when they're not there or by making it a little more intimate and personal. Okay, so you know suppose let's assume AI now some of y'all may have questions that you can't ask but let's assume AI was good enough that afterwards you could pop up your phone and ask that question that you're a little embarrassed to come up and ask but I wouldn't have minded asking Dan this question and then the AI can give you your question and you your question and you your question

And I think this is more going to a part of AI that is the biggest challenge, which is this idea of emotional connection, okay? And having conversation, not just about facts and information, though. But is the data that is generated by Twitch, is that useful for an LLM?

So there's so much. Is it useful for an LLM? Sure, it's useful for an LLM. But now I think what everyone... Is Amazon using that for their stuff? Like right now, Amazon doesn't talk about what it's used, but let's just say it's not a big deal, right? You know, we see...

We used to think that there was these, oh, you've got this unique data. And then every day there's a new foundation model come up that's the new, you know, hip thing that didn't have this data that no one had, right? DeepSeat didn't have, oh, this data that no one had. So my view is now out there, there's tons of data out there. Yes, it's interesting. I find it much more interesting to think about how, you know, streamers and creators will use AI as a sort of extension of themselves.

Okay. We're going to leave it there. We talked about AI, so we fulfilled our actual obligation. Check that off. Thanks to you guys for showing up. If you are not channel subscribers, please subscribe. I think there will be a QR code if you can't figure out how to subscribe to a podcast, but I bet you can. Thank you for coming. Dan, thank you for your time. Thanks for having me.

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