Twitch Through the Prism of Cable TV

Inevitably, when a little-known company comes out of nowhere to be acquired by a well-known one for nearly a billion dollars, people start looking for analogies. And so it was with Twitch, the site that broadcasts people playing video games that Amazon nabbed this week (as first reported by Eric and Amir.)

The analogy of choice among writers—and among Google executives who almost bought the company first—was ESPN.

The obvious reason for the comparison is that high-level video game play has evolved into a sport. But what interests me is the economics. ESPN is a cash machine for Disney because cable operators pay around $6 per user, per month to carry it. The sports network is one of the few guaranteed moneymakers in a media industry full of anything but.