What is Twitch's revenue potential?

Twitch has demonstrated substantial revenue growth with a multifaceted business model encompassing advertising, subscriptions, and mergers with other Amazon services. Advertising is likely Twitch's primary revenue source, enhanced by synergy with Amazon's extensive advertising business. This relationship promotes both platform visibility on Twitch and Amazon's product sales 1.

Regarding subscriptions, estimates suggest around a million subscriptions on Twitch, each priced at $5 per month, with Twitch retaining around 50%. This structure generates substantial revenue for Twitch, especially considering its high margin nature, mainly incurring only transaction fee costs 2.

Twitch also benefits from user-initiated tips, a significant source of potential revenue. Despite currently not monetizing tips directly, Twitch might implement features to capture a share of this revenue stream in the future 3.