Starting a live streaming business can be easy with the right information. Learn what’s involved in opening a live streaming business: from startup costs and business licensing requirements to marketing tips and insider advice.
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2. BUSINESS
OVERVIEW
A live streaming business participates in the advertising revenues and subscription
payments that are earned by streaming sites that have extensive online
communities such as Twitch.TV. Azubu is another streaming website system that is
popular for watching pro streamers.
Twitch.TV has over 45 million gamers that use the system each month and over 100
million unique visitors. Twitch.TV was purchased by Amazon during 2014 for about
US$1 billion. There are about 14,000 high-profile streamers (also called elite
gamers) on the system that generated over US$60 million in advertising revenues
and subscription fees during 2015.
Significant annual growth in revenues is expected to continue. CNBC reports that
the estimates for Twitch.TV are US$1 billion in revenues by 2020, which will make
the company worth over US$20 billion.
By acquiring a large following, (500+ average for Twitch.TV) the player becomes
qualified to become a partner for the live streaming site. The streaming site will pay
based on the internet traffic for the individual’s channel. Live streaming channels
also solicit donations from their fans.
Popular live streamers can become sponsored by one or more commercial brands to
earn additional revenues. As a channel becomes more popular, the are more
possibilities for sponsorship, higher advertising revenues, more sharing in
subscription fees, and increased donations based on audience appeal.
Who is this business right for?
One prerequisite for a successful live streaming business is to have top-level gaming
skills in order to gain a following of viewers who will take time out of their day to
watch and learn gaming styles from the streamer.
3. BUSINESS
OVERVIEW
What happens during a typical day at a live streaming business?
Each day a professional streamer needs to answer the comments and emails from fans
and make updates on Twitter. Then, the streamer needs to update news and perhaps
make a posting of previous game play on social media. After this, the streamer plays
video games live for the audience to watch according to a pre-announced schedule. The
streamer may play continuously for many hours (up to 18 hours in a row).
The average gaming session is at least four hours long. It is best to play continuously to
keep viewers interested and take as little time out for intermissions as possible. The
most popular streamers usually eat and go to the bathroom without stopping the
gameplay. The typical times of day for gameplay start in the afternoon and continue
until late at night or even until the next morning.
What is the target market?
The customers are video game enthusiasts who want to learn how to become better
players by watching how professionals play certain games.
How does a live streaming business make money?
The revenues come from advertisements, profit-sharing from channel subscription fees,
sponsorship, in-person appearances at events, and earnings from winning game
tournaments.
What is the growth potential for a live streaming business?
Using Twitch.TV as our example, there are about 14,000 professional streamers on the
system. Each month, Twitch.TV has about 100 million unique visitors. Dividing those
visitors by the number of streamers, shows there are about 7,000 visitors per streamer.
This number continues to grow each year.
4. GETTING
STARTED
What are some skills and experiences that will help you build a successful live
streaming business?
The ability to play the video games extremely well is critical, along with the ability
to make interesting comments that keep viewers intrigued. Moreover, having
excellent skills at becoming an influencer on social media will help bring more
viewers to your streaming channel. It helps to be very friendly with popular
streamers. Some of the nicer ones will help smaller streamers gain an audience by
making recommendations to their subscribers to check out the newbies’ streams.
What are the costs involved in opening a live streaming business?
A high-speed Internet connection costs about US$50 to $100 per month. You will also
need a gaming computer for about $1,000, with a high-resolution monitor(s) that
costs around $350 each and game players with controls (XBox, Wii, Sony
Playstation) for each type of game you want to play, which are around $300 to $400
each.
There is a 30-day free trial for Twitch.TV and after that, there is a monthly
subscription fee of $5.99 to $10.99 per month depending on the features desired.
What are some insider tips for jump starting a live streaming business?
Successful live streamers are highly strategic and effective gamers. This allows them
to excel above the competition. Others may be less adept gamers but capitalize
instead on their unique personality traits, including a humorous voice, or offering
clever commentary on their games.
5. GROWING
YOURBUSINESS
How to promote & market a live streaming business
Social media is an effective way to promote your gaming skills. Joining
Internet associations of video gamers and participating in game forums
are great ways to establish a network of friends that like the same
games. Another good strategy is to play games online with as many
people as possible, in order to to get good at them and build up a
following of those who respect your gameplay.
How to keep customers coming back
Making success as a streamer is about being popular on the Internet.
Be respectful of your audience and play the games when you announce
in advance that you will on the times that you say you will.
How and when to build a team
The time to add an assistant is when the maintenance of the fan
communication is interfering with the time needed to play the games
online. Most streamers get one of their friends to help them as they
become more popular.
If a streamer becomes a top earner there is plenty of money to share
with an assistant. Working as a professional streamer, playing your
favorite videos games with your best friend helping you is a dream job
for many people. You have to be very good and stay motivated to be your
best because the competition from other excellent game players is
severe.
6. LEGAL
CONSIDERATIO
NS
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a Live
Streaming business
Check with your town, city or county clerk’s office
Get assistance from one of the local associations listed in US Small
Business Associations directory of local business resources.”
Most businesses are required to collect sales tax on the goods or
services they provide. To learn more about how sales tax will affect your
business, check out our informative guide, Sales Tax for Small
Businesses.
Intellectual Property Agreement
This live streaming company will operate through a partnership with a
larger streaming platform which initially requires a prerequisite
membership account to be able to post live streams.
By agreeing to the Terms and conditions of the Streaming Site
(I.E Twitch), you are agreeing to allowing users to view your
intellectual property (Live Stream) even after the time that you post
it.
Once the Partnership is established, this agreement holds a higher
priority due to money being exchanged for a advertising space on the
page where the video meets a minimum average number of viewers.
7. EARNING
POTENTIAL
How much can you charge customers?
Streamers who have enough followers to qualify as partners are allowed to have a
subscription button on their individualized web page within the streaming system.
Subscribers to their streaming channel pay a monthly fee of $4.99 for that certain
channel and get to have special features as well. Around 50% of the $4.99 goes to
Twitch.TV, while the other 50% is paid to the streamer.
Viewers can also give donations to the streamers they like. Streamers who are top-
rated, with lots of followers, can get fees from sponsorship just like professional
sports players.What are the ongoing expenses for a live streaming business?
The ongoing expenses are a high-speed Internet connection, updating gaming
equipment and a computer with a high-resolution monitor(s), and buying the games
(although sponsored streamers can get games for free). This is about fifty to several
hundred dollars per month.
Popular streamers also typically hire one or more assistants to help manage the
workflow of communicating with fans, talking with sponsors, updating website
information, setting up paid appearances, and organizing attendance at conventions
and gaming tournaments. Assistants make about $250 per week for part-time help.
How much profit can a live streaming business make?
Professional streamers, who have enough subscribers (500+) to become partners,
make US$3,000 to US$5,000 per month for full-time streaming. This means playing
at least 40 hours each week. Additionally, they earn a portion of the advertising
revenues which equates to about $250 per 100 subscribers for each month. The
highest paid and most popular streamers make over $300,000 per year.
8. EARNING
POTENTIAL
How can you make your business more profitable?
In addition to having a streaming presence, it is important to create a
following by posting videos on a YouTube channel. There are two video
gamers in the top ten YouTube channels and they earn millions of dollars
per year. Here are the latest figures reported by Forbes of the top ten
highest paid YouTubers that are also gamers (at least part-time):
Mark Fischbach who goes by the name Markiplier on YouTube brought
home a cool US$5.5 million during 2016 for his video commentaries on
video games, along with his other eclectic content.
The Swedish PewDiePie who shows video snippets of himself playing
video games and his comedic sketches was the top earner on YouTube
during 2016 with an astounding US$15 million in revenues. He had over
13 billion views on YouTube during 2016 and lots of profits from his best-
selling book, entitled “This Book Loves You.” He also promotes mobile
games. His latest game is “Tuber Simulator.” It is the number one mobile
game app in the Apple app store. It was so popular it crashed the servers
due to the excessive demand.
Streamers who also become YouTube celebrities can make a lot of
money from advertisements, sponsorship, endorsements, public
appearances, and winnings in professional gaming tournaments.