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August 5, 2020 | From the blogTechnology

Mixer’s Shuttering and Lessons for the Future of Streaming

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Andrew Ramstad

Associate Attorney

At the end of June, Microsoft announced the closure of its esports streaming service, Mixer.  Since Microsoft’s acquisition and rebranding of Beam in 2016, Mixer had a polarizing and brief existence.  Despite a technologically impressive service and a community of dedicated streamers and viewers, Mixer’s viewership numbers never put more than a modest dent in those of its competition, streaming giants Twitch and YouTube.

In 2018, Microsoft signed some of the biggest names in esports to exclusive streaming deals to boost Mixer’s low viewership.  These athletes included Tyler “Ninja” Blevins and Michael “Shroud” Grzesiek, whose contracts were reportedly worth $20-$30 million dollars and $10 million dollars, respectively.  The signings resembled major player trades in the NFL or NBA and sparked other streaming services on a rush to lock up other major esports streamers—along with those players’ fans and viewers, as the theory went—for their own services.

Unfortunately for Mixer, both Ninja and Shroud’s viewership numbers declined after the move, and the service’s viewership generally lagged far behind both Twitch and YouTube.  Mixer was reportedly in financial trouble months before the COVID-19 lockdown in March, and even during lockdown did not see the corresponding increase in viewership that its competitors did when its viewers turned to streaming content during lockdown. In April alone, Twitch viewers watched 1.5 billion hours of gaming content.  YouTube viewers watched 461 million hours. Both companies reported 101% growth year-over-year from April 2019 to April 2020. In stark contrast, Mixer viewers watched only 37 million hours, and the platform only grew 0.2% between April 2019 and April 2020.

From a business perspective, it is clear after Mixer’s closing that new esports streaming services cannot simply buy their way into a competitive market share.  Paying top dollar for exclusive contracts with Ninja and Shroud was a blockbuster move, but it couldn’t push Mixer into streaming relevance even with Mixer’s strong streaming architecture and its small-but-dedicated community.  The survival of a streaming service must be based on a solid foundation of viewership numbers, and Mixer simply couldn’t make up ground.

Other streaming services should also use Microsoft’s shuttering as a lesson in how to manage user and viewer bases.  Simultaneously with its announcement of the closure, Microsoft announced a partnership with Facebook Gaming, which pledged to honor the terms of Mixer’s agreements with its partners (streamers contractually bound to Mixer) to the closest extent possible on Facebook’s platform, for any partners which chose to migrate.  After the closure, however, many Mixer partners felt blindsided by the news, explaining on social media that Microsoft provided no warning at all to its partners that the service’s days were numbered.  Similar streaming sites would be wise to avoid similarly abrupt changes in their service, particularly where streamers are concerned.  Mixer as a service emphasized community more so than its competitors – Microsoft’s sudden abandonment of Mixer could bring lasting backlash against Microsoft, its other businesses and brands by the streamers and viewers who relied on the platform for their streaming or content needs.

The Mixer community also expressed more fundamental concerns with Facebook’s suitability as a comparable replacement to Mixer.  Facebook Gaming collects more data than Mixer did, or Twitch does, which appeared to encourage more security-minded Mixer partners to either move to a competitor or leave streaming altogether rather than join Facebook Gaming.  Mixer partners are also very aware that Facebook’s user base may be large but may not be the appropriate demographic match to successfully launch a streaming channel.  84% of Facebook’s users are between the ages of 30-45, while the average consumer of esports or streaming sites is age 29 and skews younger.  Both this demographic mismatch and Facebook’s data collection practices have been enough to give Mixer partners a reason to consider joining Twitch or YouTube rather than Facebook Gaming, which are self-inflicted obstacles new streaming services clearly cannot afford if they want to remain competitive in the streaming space.

The closure is more straightforward from a legal perspective.  Microsoft’s Services Agreement—which was incorporated into Mixer’s Terms of Use—permitted Microsoft to terminate its service at any time, precluding any breach of contract action from Mixer partners.  The legal consequences of the closure on Ninja and Shroud’s contracts are similarly dependent on the particular structure of those contracts.  Any potential movement of these exclusive contracts to other entities would only be permitted if the contracts included language allowing Microsoft to assign the contracts to other parties, with that assignment likely subject to approval by the players.  Apparently neither Shroud nor Ninja’s contracts were freely assignable by Microsoft, however, because Facebook Gaming reportedly offered to buy out both players’ contracts.  Each player declined, instead opting to test out streaming service “free agency.”  Microsoft has also allegedly simply paid out at least a portion of each players’ contracts, although whether that payment was funded through a mechanism like an asset sale or some other mechanism is confidential between each player and Microsoft.

Mixer’s community is now learning firsthand that no venture is certain, nor will it last forever.  To its community, Mixer was a smaller streaming site with unique features, reliable streams, and more robust viewer-streamer interaction.  To its competitors, Mixer never developed the viewership to threaten at becoming a serious competitor in the space.  Clearly, any new streaming platform will need to cultivate both its own dedicated community and a broad, demographically matched viewer base if it has any hope of overcoming the viewership obstacles that eventually caused Mixer to close its doors.

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Photo by Alex Haney on Unsplash

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