Twitch does a chokepoint capitalism
“Amazon is charging Amazon so much money to run the business via Amazon that it has no choice but to take more money from streamers.”
When Amazon bought Twitch, the story was that the new conglomerate would be more efficient and that would benefit everyone — streamers and audiences. That’s the story we hear about every anticompetitive merger, and it’s always a lie.
One major efficiency that the Amazon-Twitch merger was supposed to produce? Lower bandwidth costs. That’s one of the largest expenses associated with running a streaming service, after all, and Amazon Web Services is the 800lb gorilla of cloud computing. They’ve bought or built tons of infrastructure, and even for parts of the stack they don’t own, they are so big they can demand preferential treatment.
Hypothetically, cheaper bandwidth leaves more money on the table for the creative workers whose labor generates Twitch’s revenue, but that’s not how it’s played out. In incredible blog post explaining why Twitch is unilaterally canceling its highest-tier royalties, company president Dan Clancy blames the change on the cost of bandwidth:
