Written by Brandon Hamilton, Lava Hong, Megan Penisson, and Abhijeet Tiwari
Livestreaming has become a burgeoning global industry, recording eight billion hours of content watched in the last quarter of 2020 (May, 2021). This project aims to understand the industry before the COVID-19 pandemic, how it evolved during the pandemic, and its future opportunities.
From October to December 2020, over eight billion combined hours of content were watched as livestreams on the top three largest platforms, Twitch, YouTube, Facebook Live (May, 2021). Nearly three decades before, the first livestreaming event occurred on June 24, 1993, by the band Severe Tire Damage at Xerox Parc in Palo Alto, California. This band consisted of scientists and engineers who succeeded at streaming audio and video for people worldwide to witness. However, livestreaming did not become popular until the early 2010s, when it proliferated throughout the gaming industry over the next decade). In 2020, other live performance industries started experimenting with livestreaming in response to the economic impact that resulted from the COVID-19 pandemic lockdowns.
Before the pandemic, livestreaming platforms and technologies were already experiencing unprecedented growth as they accounted for two-thirds of all internet traffic in 2017. As the COVID-19 pandemic unfolded, more people were playing video games and watching music performances, virtual concerts, festivals, and conferences. For instance, the Toronto International Film Festival hosted their entire 2020 festival digitally. Twitch, the livestreaming website, saw a 20% growth in overall viewership and achieved all-time highs in total hours watched, streamed, and concurrent viewers since the start of the pandemic. This growth has cemented Twitch’s size, which surpassed traditional media outlets in 2018 in terms of viewership. According to The New York Times, livestreaming has expanded beyond traditional platforms to online stages, such as artist-built platforms, media-organizations platforms, and even retailer-built platforms.
Methodology
The team administered a Google survey to over 100 respondents in the US and Canada from January to March 2021 to determine attitudes towards and behaviors within the current livestreaming industry. Team members also conducted expert interviews with industry professionals from various domains, including the gaming, education, and music industries. Two observations were apparent in the interviews: the first observation was related to the importance of production quality in livestreaming; the second observation was related to marketing and audience targeting techniques to deliver their content successfully.
Survey
The survey was active from January 31 to March 1, 2021, and asked respondents various questions on their habits relating to livestreaming, in-person events, and gaming. Participants were given the option to skip questions that did not relate to their experience. The survey then directed respondents to a section dedicated to gaming habits. We asked participants about their gaming device preferences and the number of hours spent playing video games. If respondents did not play video games, they had the choice to skip the rest of this section. The survey concluded with demographic questions for classification purposes.
Participant Summary
The survey received 140 responses. Of these respondents, 80 were female, 59 were male, and one respondent chose not to identify their gender. The majority of our respondents were between 18 and 34, with only 13% of respondents being outside this age range.
Data Analysis and Results
Of our respondents, 45.7% were white, 29.3% were Asian, 6.4% were Hispanic, 5% were black, and 5.7% preferred not to disclose their ethnicity. The remaining 7.9% identified as multiple ethnicities. The majority of our respondents went to college: 43.6% held a bachelor's degree, and 42.1% held a graduate or a higher degree. Five percent reported having completed some college but not holding a degree, 4.3% reported having a high school degree or a GED equivalent, and 2.9% reported a degree less than a high school certificate. The majority of our respondents were young adults, aged 25 to 34, and made up 51.4% of the total respondents. The second-highest number of respondents, 35.7%, were between 18 and 24 years old. The most represented demographic of respondents in our survey was white, educated female millennials aged between 25 and 34 from the northeastern parts of the United States.
Figure 1. Current vs. Future Livestream Event Attendance. Source: Survey Data
Respondents revealed their current livestreaming patterns. Given their demographics, most of them watched educational content. They also watched live podcasts and talk shows. There is a correlation between podcast listening and education: "85% of podcast listeners went to college," When asked about their interest in future events, respondents chose to watch concerts, live podcasts, and talk shows. On comparing the present and post-covid statistics, respondents indicated a desire to attend double the number of livestreamed music festivals and performing arts events; this signifies potential growth in music and arts livestreaming, as seen in Figure 1. Our experts indicated that in-person events are projected to grow post-pandemic. A hundred and twenty-five of our survey respondents, nearly 90%, corroborate this projection (See Figure 2.) Though 48.6% of our respondents attended in- person events only a few times a year before the pandemic, nearly 90% demonstrate an eagerness to attend the same number or more after the pandemic.
Figure 2. Respondents Preferences for Attending Live Events Post - Covid 19. Source: Survey data.
After further questioning and analysis, we found that nearly all respondents reported reluctance to pay the same price for virtual events; 92.1% of respondents indicated an unwillingness to pay the same price as they would for in-person events. In addition, we found that 60% of respondents claimed that they did not pay to attend their last livestreaming event. The team concluded that people still prefer in-person events over livestreaming events, justifying why monetizing from livestreaming concerts has been challenging. Of our respondents, 51.4% reported their willingness to attend the same number of in-person music events after the pandemic, and 37.9% of respondents were willing to attend more in-person music events post-pandemic.
For the gaming industry, 27.9% of our respondents reported spending 1 to 5 hours each week playing video games, and 24.3% spent less than an hour gaming. From our survey, 60% of respondents referred to themselves as casual or social players who either played at the end of the day to unwind or with other people playing games. The results suggested that more than 50% of the respondents used smartphones for gaming and laptops and desktops. These results have been displayed in Figure 3 and suggest that many people still prefer to play games on their phones or PCs.
Figure 3. Devices Used by Respondents for Gaming. Source: Survey Data
Case Study: Travis Scott Fortnite Concert
During the 2020 Global Pandemic, many artists turned to social media to host performances and engage their fans. The artists came from diverse backgrounds and included both big stars like John Legend and smaller DJs who usually perform at Los Angeles clubs. According to an NBC report, social media platforms saved music artists who were struggling from their inability to tour and perform. These livestreams often consisted of artists performing live for free on platforms like Twitch and Instagram, reaching thousands of people.
One significant event was a livestreamed concert known as Astronomical, performed by Rap music artist Travis Scott in partnership with Epic Games. Astronomical consisted of five shows between April 23, 2020, and April 25, 2020, that audiences could watch for free through the Fortnite video game created by Epic Games. Once the show began, all players would use their video game characters to attend and interact with the show together, as seen in Figure 4. The Verge described the show as beyond what was possible in person at physical concerts; other concerts “... don't let you float through the air while a Godzilla-sized rapper walks across the ocean.”
Astronomical was the second performance by Epic Games in partnership with music artists, and it was immensely successful for both parties involved. It recorded a viewership of 45.8 million and was bigger than a similar event featuring music producer/DJ, Marshmallow which garnered approximately 10 million attendees (Fortnite's Twitter, 2020). There was a direct, measurable benefit for Travis Scott from performing. Rolling Stone reported a 26% increase in music streams across Travis' catalog when the event was first announced; some tracks' streamed number even doubled.
Industry Interviews
Prior to the professional interviews, the team noticed an overall sentiment towards in- person events and a firm stand on its irreplaceable emotional value in secondary research. Kevin Chernett, Live Nation's executive video president of global partnerships and content distribution, stated in an interview with The New York Times that "... we are never going to replace, through digital, the emotional connection an artist has with their fans. I do not think we are going to replace all the touring revenue. However, we are certainly willing to find out a tolerance level and interest from fans to see where it goes." Such reflection also resonated among the majority of our interviewees.
Of the ten experts we interviewed, most of them were white Generation Xers and Baby Boomers. Seven were male, and three were female. The difference in demographics between our interviews and surveys is noteworthy; our interview results were compared to our survey findings in the following domains: Gaming, Music, and Education.
Gaming
Members in the gaming industry are familiar with Twitch, a leading video streaming platform that dominates the gaming market and attracts over 34 million unique viewers a month (Edge, 2013). An Engagement Manager at McKinsey & Company, claimed that watching gamers' livestreaming on Twitch was the primary outlet for the gaming industry (personal communication, November 18, 2020). They also stated that the content consumers' primary demographics are men aged 18 and 35, matching the data found in our survey. In their opinion, the video game industry has allowed anyone to start their own channel and livestream with great content (personal communication, November 18, 2020). In addition, the Executive Vice President of Concord's Strategic Planning and Advancement, believed that the monetization of paid virtual experience had a lower threshold in the gaming industry due to its lack of replicable qualities (personal communication, February 15, 2021). Therefore, audiences would be more willing to pay for the experience, further emphasizing that unique and irreplaceable experiences are what they are looking for (personal communication, February 15, 2021).
Music
Technical challenges are the biggest hindrance in the music livestreaming industry's growth. Interviewees pointed out critical technical limitations regarding connectivity issues, bandwidth, and audio post-processing, that it is not a copy of the in-person format when developing virtual live events as it is "impossible to replicate that experience" (personal communication, December 17, 2020). And, that there is an importance of pre-recording the content to avoid any technical errors.
A Senior VP in Music, talked about the technical challenges in music livestreaming and referred to them as fear factors. She echoed the idea of the importance of pre-production while admitting that the magic of livestreaming is in seeing the imperfections (personal communication, January 15, 2021). These experts agreed that music livestreaming events could be successful and beneficial to smaller artists if planned accordingly. For prominent artists and brands, simply planning an event may not generate significant revenues. A licensing manager at Sony Music Entertainment, cited Travis Scott's Fortnite concert as an example of how great content can create ways to strategize branding collaborations among big names (personal communication, November 14, 2020). However, not all are enthusiastic. A Senior Producer at one entertainment company spoke about livestreaming being only an alternative under exceptional circumstances (personal communication, November 11, 2020). They doubted that virtual events would entirely replace the live music industry. Since music livestreaming's audience engagement requires higher user interface design, it is harder to generate as much revenue as in-person events. This monetization challenge was repeated by another interviewee from the consulting side: "You can have the best technological solutions in the world," he argued, "but if the content is not there, then as far as making an impact goes, it can be limited" (personal communication, November 11, 2020).
Education
The survey indicated that 42% of respondents spent the majority of their time watching educational livestreaming. As some of our interviewees also lectured at universities, virtual livestreaming had a massive personal impact in the educational world. They mentioned the challenge of virtual education during the pandemic as his subjects relied heavily on studio practices and good audio quality. Though Zoom is not considered livestreaming, a professor of at Carnegie Mellon University, argued that "There is a threshold. Once an online class has more than a certain number of attendees, it feels like a livestreaming event with no interaction between the speaker and audience" (personal communication, November 20, 2020). Ultimately, they stated that these virtual collaboration platforms for networks and seminars do not serve streaming platforms well. Typically, in a class of 50 students, the professor would see about ten cameras on and assumed that the 40 other students might not even be at their computers.
Despite opinions supporting a lack of presence and zoom fatigue, our survey indicated that many people still attend educational livestreaming events. Livestreaming in the classroom, even before the pandemic, had been wildly popular. A musician and multi-camera production specialist, spoke about how he put his son in a virtual school before the pandemic. "When I visited his high school classroom [in-person], he was one of 32 students with 12 who were not interested [and were] getting in the way of the ones that were interested," he reported. "[In] the online curriculum... he was able to focus better. Squeezing 30 kids in a classroom seems archaic now." (personal communication, November 11, 2020). As a parent, the virtual platform for his son made the most sense. He added a similar perspective as someone reflecting on his own experience as a student in a lecture hall of over 200 students. Since most professors read directly from the textbook, he felt little incentive to be in person for his class (personal communication, November 11, 2020). Both interviewees agreed that the schools that already had livestreaming before the pandemic quickly adapted to the stay-at-home orders. Regarding the generational gap between our interview insights and survey results, Stein shared the following insight: "I have seen data that predicts that by 2025, 50% of the private institutions in the United States, higher education, will be gone. If we do not apply elements that your generation and others are used to, in terms of being engaged, we are going to lose the battle" (personal communication, November 11, 2020).
Conclusions
Result 1: Top livestreaming platforms and events:
In Q4 2020, as reported by Ethan May from Streamlabs, the top livestreaming platforms watched were: Twitch with 5.4 billion hours, YouTube Live with 1.9 billion hours, and Facebook Gaming with 0.9 billion hours, as represented in Figure 5 (May, 2021).
Figure 5. Total Hours Watched. Source: https://blog.streamlabs.com/streamlabs-and-stream-hatchet-q4-live-streaming-industry-report-a898c98e73f1
The total reported number of viewers during livestream is used to measure audience engagement and pinpoint the most successful livestreaming events. As it falls outside of our definition of livestreaming, the number of views after the broadcasted event is not included. The top events are listed below.
2020 Video Game Awards broadcasted on December 10, 2020, to an audience of 83 million viewers.
Astronomical, Travis Scott Fortnite Concert, 45.8 million viewers across five events from April 23, 2020 to April 25, 2020 (Fortnite's Twitter, 2020).
Andrea Bocelli's Music for Hope YouTube Concert broke classical livestream records with over 2.8 million concurrent viewers and over 28 million views in its first 24 hours.
Result 2: Partnerships, bundling, co-branding opportunities:
Partnership opportunities are booming in the livestreaming space. An interviewed expert in gaming, stated that partnerships were "one of the few ways to build unique, genuine communities, and we see these occurring around games themselves, and also with groups (Personal Communication, November 18, 2020). The interviewee provided the example of the eSports team of the United States Armed Forces recruiters, who used video games to find recruits from their audience. In the musical space, new directions are emerging that musicians can take to bring their virtual events to the next level. One direction is through partnerships with other mediums. Fortnite has demonstrated the viability of this direction with its Concert Series, where artists can perform their sets on a virtual stage in the game, similar to what Fortnite did with Marshmello and Travis Scott. These concerts offer a unique opportunity for cross-pollination between the game and the artist, allowing Fortnite to maintain its player base for further monetization through their existing methods of in-game cosmetic purchases.
In addition, livestreaming in e-commerce has experienced a drastic increase across the globe. Originating in 2016, e-commerce livestreaming allows brands to promote products and engage with audiences with exclusive deals, particularly with Chinese TikTok and Taobao online markets. During China's annual shopping festival in 2020, e-commerce generated $449.5 million in sales alone. The United States caught up quickly with the trend; name brands, like Tommy Hilfiger and Levi's, were one of the first to adopt this new strategy.
Result 3: Success measurement:
Results from our research and expert interviews suggest that the best measurement for most industries is viewership. The education industry is the exception to using concurrent viewers to measure audience engagement; education still relies on existing measures, like testing, to gauge understanding of content. A professor interviewed made an interesting observation about his engagement experiences: his interaction with 50 students over an online session felt like interacting with 200 students in person.
Though our survey respondents indicated overwhelmingly that they were against paying similar in-person prices for digital events, direct monetization is necessary for livestream special events. Twitch has been leading the way in expanding different monetization methods that target customers based on their price sensitivity and are worth future exploration. Our research was inconclusive on the impact livestreaming special events can have on driving traffic to, or away from, paid and ad-supported platforms.
Result 4: Accessibility in the livestreaming space:
All of our experts noticed increasing accessibility in both content creation and consumption. Livestreaming allows for more inclusivity by giving opportunities to smaller content creators as anyone with an internet-connected device can watch and broadcast content. Sites such as Twitch, YouTube Live, and Facebook Live allow consumers to find a wide variety of content without the need for subscriptions or accounts. One interviewee noted that these same platforms allow new live streamers to have immediate, free access to enterprise-backed resources (Interviewee, personal communication, November 18, 2020). One example is the success of a ten-year-old streamer who unboxed and reviewed toys online, making $29.5 million in 2020. This same kid made over $10 million in 2017 at six years old.
However, some livestreaming platforms allow events to restrict attendance to ticket holders. This is useful for concerts and tours to monetize from audiences, who are traditionally restricted by physical or technological limitations, to still watch the event without devaluing the overall experience. For example, Egan talked about a Country Musician in the United States who had an audience in Brazil. The musician found it challenging to make enough revenues by touring Brazil and decided to do a virtual concert (personal communication, February 15, 2021).
Result 5: Livestreamed/ virtual events in the future:
The research team believes that there is a future for livestreaming, expanding beyond the gaming industry. Our survey results showed rising interest in watching virtual events, but it does not appear strong enough to replace in-person events at this time. There is an indication that more people are open to watching some events virtually, depending on their preference for the experience. By watching a concert virtually, for instance, an attendee could host their party around the concert at their own home with their peers.
Summary
The rapid growth of livestreaming observed since 2020 has led to new viewing habits and established virtual events as a crucial part of content creation, production, and distribution. Our research suggests that current technological challenges are expected to improve through gradual enhancements such as VR, 5G, audio syncing, and real-time audio mixing. Livestreaming has opened up new platforms for content creators to execute their creative perspectives and distribute to a broader audience. As a result, livestreaming will thrive with its monetization methods; direct donations, ad support, and sponsorships are being standardized in the industry. While the willingness to pay for virtual event tickets varies greatly from music to educational network events, the team acknowledges the irreplaceable value of in-person events. Therefore, a hybrid model is most likely to sustain as in-person events return. Livestreaming will continue to evolve from a mere convenient substitution to a driving industry where content and production quality ensure satisfying experience consumption.
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