Dorothy Pomerantz
Amazon recently made headlines with the news that its streaming service now accounts for 3% of overall video volume on the Internet. That’s up from .6% last year and it ranks the company third for overall traffic, ahead of Hulu and Apple AAPL -0.42% but still behind Netflix NFLX -1.14% and YouTube which together account for almost 75% of all online video volume.
But one fact that went almost unnoticed in the report (from bandwidth optimizing company Qwilt) was that live online video is also growing like crazy. Two newcomers to the list of biggest bandwidth hogs were WWE and Twitch. Together, the two companies account for 2% of all online video volume.
Forbes has written about both of the companies recently. Last November David Ewalt called Twitch the ESPN of video games. The site lets viewers watch people playing video games via live streams. It’s growing in leaps and bounds. By the end of 2013 the site had 45 million unique visitors per month who watched for an average of 106 minutes per day. The company is only two years old.
Then there’s the WWE. The new wrestling channel is online only. While subscribers might not be signing on as fast as Vince McMahon might like, the site is already a force to be reckoned with.
The recent WrestleMania jumped WWE to third place [in video volume] over that weekend,” says Dan Sahar, co-founder of Qwilt. “It goes to show you how much traffic you can generate from a live event.
Live events have become an increasingly important part of the programming mix on TV. As more people time shift their shows, it’s looking more and more like the only way to ensure a certain number of eyeballs at a certain time is to show something live. That’s why you see things like NBC’s recent Sound of Music Live onstage with Carrie Underwood as Maria. Roughly 19 million people tuned in to watch the show live.
It was only a matter of time until the trend moved online. But live streaming can be risky. The more people who try to watch something online at the same time, the greater the risk that there will be problems with the quality of the stream or that the feed will come crashing down.
That’s why more and more companies are turning to Major League Baseball to help them with their streaming needs. Since 2002 the MLB has been streaming live games through its tech arm, Major League Baseball Advanced Media.
As my colleague Mike Ozanian wrote in January, MLBAM has become “bigger and more profitable than any other technology business in sports.” He says the revenue for MLBAM was just under $700 million in 2013 with operating income of $225 million.
MLBAM’s MLB.tv lets baseball fans watch all out of market regular games for $110 or $130 per year depending on how mobile fans want their viewing experience to be. In building up the company,CEO Bob Bowman realized that the company’s robust streaming service could help other companies that wanted to do live streaming. Now the company hosts roughly 29,000 live events per year, only 5,000 of those are major league baseball games.
In the past 30 days alone, MLBAM has powered March Madness for Turner (69 million live streams), WrestleMania (667,000 subscribers) and Glenn Beck’s online subscription news service The Blaze.
Bowman believes the trend is only going to accelerate in the coming years.
“You’re going to start seeing more content that’s live and you’re going to see live events that are Internet only,” says Bowman. “Not a big event like the World Series but you might start seeing things that are made only for the Internet.”
The migration of live events to online will eventually be another nail in traditional TV’s coffin. As ad rates even out and programmers begin to charge as much for eyeballs online as they do for eyeballs on TV, there will be fewer reasons to subscribe to cable. Companies like Comcast will become pipe providers ushering all of this data into our homes. Comcast is arguing that one of the benefits of its proposed merger with Time Warner is that it will be able to offer faster Internet to more people around the country. Of course that will also give the company the ability to charge more for broadband access since cable is still faster than DSL.
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