The Economics of Attention: Live Streaming

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I have always heard whispers and rumblings about the attention economy, but things never clicked until the watching a few live streams on Twitch. The idea of monetising attention is not new, but after being introduced to Twitch, I have an image in my head of how effective (and lucrative) it can be.

Donating $5 a month to a streamer so that you can gain access to emotes and the stream chat seems such a novel proposition. In fact, I used to look down on people who donated and participated actively in these endeavours. My perspective flipped when I started to consider how long people would engage with these streams at a time. The average streamer would go live for perhaps 2-4 hours a day, 3-4 hours a week. In a given week, that would totally up to around 10 hours a day. Now should the quality of the live stream be high enough such that people enjoy what they are getting, even if it is for 1 hour a week of the available 10, paying the $5 to join in on the fun seems such a good deal. Especially when you consider most people don’t bat an eye getting a $5 coffee when out doing errands or watching a 2 hour movie and paying $20.

The value behind these streamers are in their ability to build a community. A sense of community is naturally built over time. Therefore, if the the entertainment value of each such stream is good enough such that people tune in as their schedule allows, time is the only barrier to building that community. After a point, you have people spending enough time and getting invested in the streamer such that it makes more sense to donate to them and access the pay-walled features than to not. The beauty of it is that you don’t necessarily need a high-production value, most of the entertainment is provided through the game and the personality of the person.

The simplicity, combined with the effectiveness, of this model makes it quite unbelievable – especially if you yourself haven’t given any a watch.

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