An Overview of Technical, Financial, and Community Aspects

40 Pages·2015·0.7 MB·English

by  Martin Courtois

An Overview of Technical, Financial, and Community Aspects of
YouTube Video Production and Gaming Live Streams

by

Philipp Karbun

Submitted in partial fulfillment of the requirements for the degree

Bachelor of Science

at the
Institute for Information Systems and New Media
Vienna University of Economics and Business
January 2015

Supervisor: Prof. Dr. Mark Strembeck
Acknowledgements
First of all, I would like to thank my supervisor Mark Strembeck. Mark gave me freedom and
independence to explore different aspects in the relatively new world of gaming live streams and
video production. He showed me how to work in a scientifically appropriate way and his
knowledge and advices contributed tremendously to the quality of this thesis.
I would also like to sincerely thank Dan S. Hamermesh, professor of economics at the University
of Texas at Austin. He took time to talk to me about the effects of looks and gender on streaming
success and applied his knowledge from the labor market in real life to the world of streaming.
Many thanks to William A. Hamilton, Mehdi Kaytoue, T.L. Taylor, J.J. Thompson and Peter
Wright for pioneering video game-related research in the area of live-streaming and for
publishing valuable papers.
Special thanks to Katrina Roaix for proofreading the thesis and improving the academic tone and
for being a great friend.
I’d also like to thank my family for supporting me whenever I needed something.
Finally, I would like to thank all my viewers and followers of my live streams and videos. You
inspired me to write a thesis about this topic and make my days so much better.
Abstract
The audience of YouTube videos and gaming live streams is constantly growing. More than one
billion unique users visit YouTube and watch over six billion hours of video each month. The
video-sharing website offers entertainment in the form of videos uploaded by individuals and
media corporations. Consequently, many of these video creators were able to turn their passion
into a full-time job. By acquiring a partnership with Google, users are able to show
advertisements on their videos in exchange for money. The purpose of this thesis is to give an
introduction to the world of a professional gamer, someone who is able to make a living of
producing YouTube videos and gaming live streams. The thesis will provide an overview of the
technical equipment that is necessary to create videos and live stream video games. It will also
show different ways to become a partner and how the content can be commercialized and turned
into money. The main focus of the thesis will be on strategic management and planning, which
includes building an audience, using analytics, social media and other strategies.
Table of Contents
List of Figures ................................................................................................................................ ii
1 Introduction............................................................................................................................ 1
2 Technical Aspects ................................................................................................................... 3
2.1 Peripherals....................................................................................................................... 3
2.2 YouTube videos .............................................................................................................. 4
2.2.1 Recording software ..................................................................................................... 4
2.2.2 Video editing software ................................................................................................ 5
2.3 Live streaming in gaming ............................................................................................... 6
2.3.1 Broadcasting software ................................................................................................. 6
2.3.2 Streaming platform ..................................................................................................... 7
3 Business Aspects..................................................................................................................... 8
3.1 YouTube videos .............................................................................................................. 8
3.1.1 Partnerships ................................................................................................................. 8
3.1.2 Revenue models ........................................................................................................ 10
3.2 Live Streaming (TwitchTV) ......................................................................................... 11
3.2.1 Partnerships ............................................................................................................... 11
3.2.2 Revenue models ........................................................................................................ 12
3.2.3 Acquisition of TwitchTV by Amazon ...................................................................... 13
4 Strategic and Community Aspects ..................................................................................... 14
4.1 YouTube videos ............................................................................................................ 14
4.1.1 YouTube analytics .................................................................................................... 17
4.2 Live streaming .............................................................................................................. 20
4.2.1 The partner program & donations ............................................................................. 20
4.2.2 Building a viewer base .............................................................................................. 21
4.2.3 Social experiments on Twitch ................................................................................... 22
4.2.4 Intangible Factors for Video Channel Marketing ..................................................... 23
4.2.5 Analytics from TwitchTV ......................................................................................... 24
4.3 Social Media Platforms ................................................................................................. 24
5 Problems & Solutions .......................................................................................................... 26
6 Conclusion & Future Outlook ............................................................................................ 30
References .................................................................................................................................... 31
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List of Figures
Figure 1.1 Percentage of U.S. peak Internet traffic ........................................................................ 1
Figure 2.1 Avermedia Live Gamer HD .......................................................................................... 3
Figure 2.2 XSplit set example ......................................................................................................... 6
Figure 4.1 Overview of YouTube analytics (Source: www.youtube.com, channel analytics) ..... 17
Figure 4.2 Demographics of a video gaming channel .................................................................. 18
Figure 4.3 Audience retention of the video ‘Duping in Diablo 3, Gem Prices & Manticores’ .... 19
Figure 4.4 Screenshot of the stream ‘TwitchPlaysPokemon’ ....................................................... 22
Figure 4.5 TwitchTV Broadcaster Dashboard, section partnership .............................................. 24

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1 Introduction

One billion unique users visit YouTube each month. Six billion hours of video are watched each
month on YouTube. 100 hours of videos are uploaded to YouTube every minute.1 The statistics of
the online video platform are impressive nowadays. YouTube grew over the last few years to
become one of the largest platforms for sharing and watching videos. The success doesn’t just
benefit the company itself. As of today, more than a million creators are partnered with the platform
and commercializing their videos. Most of them are doing this as an additional form of income to
their main job. However, for some people this is already more than just a part-time job. Thousands
of creators have successfully turned one of their hobbies into a living, some earning up to six
figures [44]. In addition to partners, advertisers use YouTube to target specific groups. YouTube is
particularly good in reaching the audience between 18-24 years of age. As this was written, 94 of
Ad Age’s Top 100 advertisers had run campaigns on YouTube [20].
Video gamers are one group of people that started to use YouTube frequently. Strategies, guides
and mechanics are being shared as well as entertaining videos and game reviews. The amount of
gamers is growing and many of them are choosing to commercialize their time efforts and start a
YouTube channel.
In addition to videos, live streaming is increasing in popularity. One popular live streaming
platform for gamers is Twitch. The San Francisco-based company was established in 2009 and acts
as a community for video gamers who are sharing their gameplay in real time.
According to Twitch’s 2013 end-of-year report, they had more than 45 million unique monthly
viewers that averaged 106 minutes of video per day [7]. The report also revealed that each month
900,000 unique broadcasters stream on Twitch from a variety of platforms ranging from PCs to
consoles. In the console segment, Microsoft’s Xbox One and Sony’s PlayStation 4 have integrated
support for broadcasting on Twitch [14]. This is done by a free Twitch app that can be set up on the
consoles to start livestreaming their gaming sessions immediately.

Figure 1.1 Percentage of U.S. peak Internet traffic, Wall Street Journal, 5 Feb 2014.

1 http://www.youtube.com/yt/press/statistics.html
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Figure 1.1 compares the peak internet traffic of the streaming platform to other popular websites.
Similar to content creators on YouTube, some gamers have been able to have been able to turn their
passion into a career opportunity [48]; through in-stream commercials, monthly subscription
revenues, sponsorships and donations.
The author is an active member of this community and will incorporate his own experiences in
this thesis.
According to Hamilton, Garretson and Kerne, the success of gaming video channels and streams
can be attributed to a number of different factors [16]:
 Many people conduct research about games before buying them; streams and videos
are for free and give them an overview of a game.
 Gamers like to socialize with others who are playing the same game.
 The comment section (YouTube) and chat (stream) provide a place for good
discussions.
 Some gamers want to improve their skills and become better at the game they are
playing. Therefore, they decide to watch some of the best players.
 They provide entertainment value (e.g. tournaments, parodies, etc.).
However, despite the numerous advantages, there are also risks involved. First, the ability to
compete in games depends on reflexes and reaction speed. A comprehensive study by Thompson et
al. analyzing the effects of aging on cognitive performances has shown that cognitive decline begins
around 24 years [36]. As a result, in the mid-to-late 20s, players start to lose their ability to compete
at the highest level. Second, games don’t last forever. If a channel is based around a specific game,
the channel could lose its viewer base due to the online game servers being shut down. Third, parts
of the revenue are being generated by commercials, which are heavily affected by the seasonal
volatility in spending on advertisement [50]. Last but not least, players invest many years into their
gaming career, leaving them with limited options after their career is over due to lack of education
and work experience in a regular job. Different ways to overcome these risks and schedule a long-
time career with gaming will be evaluated in Chapter 5.
This thesis will focus on different aspects of videos and live streams. Chapter 2 will give a brief
introduction to the technical aspects. In Chapter 3, we will take a look at the business side, which
involves partnerships and revenue models. The main section is Chapter 4, which provides an in-
depth analysis of strategic development. The exploration involves ways to build an audience,
marketing techniques, engaging communities and how social media can be used beneficially.
Chapter 5 deals with the risks of being a professional in that business and what measures can be
taken to minimize or avoid them. The thesis concludes with a summary and an outlook in Chapter 6.
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2 Technical Aspects

Professional video creators and live streamers need specialized hardware and software to do their
tasks. This chapter will provide an overview of tools that are needed in order to create high quality
videos and live streams.
2.1 Peripherals

To record audio and transmit it, a microphone is needed. There are different types of microphones
available. One method is to use a combined microphone-headset. A more professional solution is to
use a studio microphone, which is a standalone microphone and often used together with a
microphone stand and a shock mount. A shock mount is a mechanical fastener used to lower the
voice levels from the surroundings without affecting microphone input. On studio microphones,
professionals often use pop filters to eliminate the ‘popping sounds’ caused by the mechanical
impact of fast moving air (see, e.g. [32]).
The author observed that headphones are frequently used when live streaming gameplay. If
normal audio boxes are used, the microphone would also record the sound coming from the boxes,
resulting in an echo. There are different types of headphones available. One type is a headset, which
combines headphones with a microphone. However, the attached microphone is not needed if a
professional studio microphone is being used. In that case people are also able to use standard
headphones without a microphone attached.
Creators of YouTube videos often make videos in which they are simply talking to their
audience and showing themselves. Therefore, having a webcam is required. In live streaming, it
varies. Some players are reluctant to use webcams, e.g. to protect their privacy, while others decide
to stream with a webcam in order to transmit visual emotion.
A capture card is a physical device that works together with the graphics card when recording
game footage or during broadcasting. One of these products is the Avermedia Live Gamer HD card.
The Live Gamer HD adopts the high speed PCI-Express interface to offer a smooth and fast data
transmission. Capture cards are supposed to take workload off the CPU (central processing unit)
and GPU (graphics processing unit), increasing the FPS (frames per second, see, e.g. [3]) while
playing a game.

Figure 2.1 Avermedia Live Gamer HD, (Source: www.avermedia.com)
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The streaming and recording of videos of games requires a PC (personal computer). There are
no precise specifications to hardware, as it depends on the system requirements of the game and the
desired quality of the stream. Parts that affect the performance are the processor, the graphics card,
the RAM (random access memory) and the hard drive setup. For instance, SSDs (solid-state-drives,
see, e.g., [31]) could be used to improve the performance during the video recording process.
2.2 YouTube videos
2.2.1 Recording software

For the recording of game footage, special recording software needs to be used. In this section we
will take a look at the commercial version of Fraps (Beepa, http://www.fraps.com/). Alternative
recording programs are DXtory (ExCode, http://www.exkode.com/), Camstudio (open source,
http://sourceforge.net/projects/camstudio/) and Bandicam (Bandisoft, http://www.bandicom.com/),
which offer similar functionality. Fraps is able to capture the screen and video for DirectX [23] and
OpenGL [3] applications. DirectX and OpenGL (open graphics library) provide libraries which can
be accessed via a defined API (application programming interface) and used by developers. In the
context of video games they are used to adjust video and sound effects and manage the peripheral
input. OpenGL is mostly used for rendering 3D applications and special effects.
Fraps delivers files in a special codec, which favors performance over compression, resulting in
very large file sizes. In order to play Fraps video files, the ffdshow codec (see, e.g. [14]) has to be
installed. Before version 3.5.0, Fraps used to split all footage that was recorded into 4 GB parts. The
patch changed this, which added some level of comfort to the users, because they didn’t have to
combine all the smaller files into one piece anymore.
The recording of high resolution footage requires free space on the hard drives. From the
author’s experience, a typical 10 minute video recorded in a resolution of 1920x1080, can take up to
50 GB. The file size is directly dependent on different settings, such as the in-game resolution, in-
game settings of quality, anti-aliasing and shadow details. In Fraps, users are able to select the
amount of FPS they want to record. Recording 30 FPS is easier to handle for a computer than
recording 60 FPS. While 60 FPS are smoother than 30 FPS, the difference is barely noticeable by
the human eye (see, e.g. [3]) and the file size is significantly smaller in 30 FPS recordings.
To be able to record gameplay footage at a high resolution a good computer is required.
Recording can be demanding for the processor and graphics card, often resulting in FPS drops while
playing the game. The speed of the recording can be improved by SSDs. One method is to install
the game in question to the SSD and use a regular hard drive for data storage. With this setup, the
game will continue to run smoothly on the SSD and not be affected by the recording process on the
other hard drive.
Fraps offers a free trial version. The life-long commercial version extends the maximum
recording time from 30 seconds to unlimited, removes a watermark and provides buyers with free
updates of every new release.
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2.2.2 Video editing software

After game footage has been recorded, the next step is to edit and render the video. Even if the sole
purpose of a video is to show 10 minutes of gameplay, the rendering-process is necessary due to the
size of raw files. Rendering reduces the file size and converts 30 GB of footage into a single 500
MB file which can then be uploaded on YouTube.
One of the commercial programs to edit recorded video footage is Sony Vegas Pro [5].
Alternatives are Adobe Premiere Pro [18] and various open source software. The following list
includes common tasks that are performed by editing software:
 Conversion from raw files into common file formats like .mp4 or .avi to reduce the
size;
 Combination of several different clips into one long video;
 Adding special effects and transitions to the video clips;
 Variation of the speed during video clips (e.g. slow-motion effects);
 Highlighting special situations;
 Adding watermarks to protect the movie with copyright;
 Adding text to describe certain events in the video;
 Implementation of different layers, for example adding a webcam in addition to the
game footage;
 Adding special music to the footage;
 Image enhancement options like adjusting brightness, red eye removal and exposure
correction.

To summarize, the video editing process transforms raw files with gameplay footage into a
multimedia experience with special effects by using the various tools of editing software.
Due to the high number of different editing options, it takes time to get used to the handling and
tools of professional recording software. Additionally, the software is also an investment. Sony
currently offers the product Vegas Pro 13 in three different versions2 on their website:
 Vegas Pro 13 Edit, $399.95 – Basic Vegas Pro 13 version;
 Vegas Pro 13, $599.95 – Includes additional software and plug-ins from Sony and
other manufacturers;
 Vegas Pro 13 Suite - $799.95 – Includes everything from Vegas Pro 13 plus 25x
royalty-free production music tracks and additional software for post-production
activities.

The time of the rendering process is dependent on the power of the CPU, the length and
resolution of the video and the file size.

2 http://www.sonycreativesoftware.com/vegaspro/compare#pro
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