Earlier today, after earlier flirtations with Google, Twitch announced that they were being acquired by Amazon. The move is partially denoted by Google’s fear of antitrust legislation, and partially motivated by Amazon making a very strong push into video games beyond just selling them at retail. The move comes as the Amazon Fire phone tries to make hay in the increasingly competitive – and, increasingly, two-horse – mobile market, trying to tie in users to Amazon’s ecosystem. Reviews of the Fire Phone are decidedly mediocre so far, with many people saying it’s less of a phone than it is a walking billboard for Amazon services and sales.
Those reviews should worry anyone who liked Twitch, from streamers to consumers. Amazon has shown an increasing willingness to throw its corporate weight around recently, and they now have another hammer in their box.
On the surface, the move works. Amazon’s server backbone is one of the best in the world, as has been proven by the site’s stability, and their Amazon Web Service and cloud computing offerings are some of the best around. Putting those resources to work for Twitch will work wonders for the site, as will Amazon’s willingness and ability to play on a more even playing feel with telecoms who are salivating at the eventual and inevitable demise of network neutrality, preventing bottlenecks when Comcast and Verizon eventually turn the screws. If this was simply a question of uptime, this would be a no-brainer win for everyone. But that uptime comes at a price, and Amazon’s control of retail is the toll collector.
Both gamers and streamers had a fit when Twitch started wiping out both older streams, and copyrighted audio from the ones that were left. These complaints were almost completely justified, as it was a scattershot and poorly justified move that caught a lot of people in its net. However, Amazon has no interest in censorship; they can make the music industry – once compared to rogue states with nukes for their willingness to napalm anyone in their crosshairs – heel if they want to. After all, any retail sales of music CDs online come via Amazon, and a large share of digital sales do as well, via Amazon’s streaming music service. Since incorporating Kindle, their streaming service, and now seasons of popular television shows into their portfolio, they have come to control a large portion of the world’s entertainment.
Unfortunately, they also control a lot of the games industry’s online retail as well, and that’s where the worries start. The good news about an Amazon controlled Twitch environment is that Amazon can cross-promote streams with the retail product. For example, let’s say I stream MLB 14 The Show later this week on my own stream page, and move my stream to Twitch. Amazon recognizes the game, and bang, in the upper right hand corner of my page, where Youtube would put a similar link for music, goes a link for the game; to incentivize streamers, they can even go with tossing streamers a few pennies from any sales of the game.
On the face, that sounds like a win all around, but what about companies that don’t agree to what would likely be unfavourable terms from Amazon? That’s where it gets ugly. Now, Amazon’s algorithm can be set to not allow streams of games that don’t agree to terms. Streamers have to find somewhere else – without an audience – to stream. Gamers won’t see that game. All of the leverage is in Amazon’s court. If that seems extreme, then read up on what they’re doing to e-Book publisher Hachette.1
It’s that ability to interact with publishers – and threaten them with the stick – that allows them to dictate those terms, and it could be what causes many publishers themselves harm as well. Let’s say Tecmo Koei doesn’t want to sign onto Amazon’s streaming terms. All of a sudden, Amazon algorithms start deemphasizing Tecmo products, delaying shipments of their retail games, and otherwise sticking it to them. The same goes for music companies who have third party music being used in streams; that could become a bargaining chip in board rooms without anyone being aware of it. For gamers who are wondering how it could affect them, it’s important to remember that Amazon already has many streaming services under Amazon Prime, and is willing to give more incentives to sign up for the program. Even if they raise the price of Prime again, there are already enough incentives to keep people paying, and if Twitch stream watchers don’t want to come on board, there are many ways to coerce them, from withholding archives from them to depreciating video quality (removing HD streaming, decreasing download speeds and increasing instances of buffering), and in a worst-case scenario, outright holding certain titles or streamers from non-Prime customers completely. Again: don’t assume Amazon is above using the stick to force people to eat the carrot.
Amazon can provide great services, and for those who use it, Prime is a great service. But their actions over the past year have shown that they are increasingly willing to play hardball with both their customers and their business partners, and if they throw their weight around, it will make peoples’ complaints about absentminded music DRM look like nothing.
1 – For what it’s worth, in this particular case, I don’t have a lot of sympathy to Hachette, who have done everything they could to stiff their writers over the years, and imprinted some of the worst DRM on the market into their e-Books.