Content creators

3 StreamElements: Talent agency of the future for young content creators

Last month, when the founders of start-up StreamElements – Doron Nir, Or Perry, Reem Sherman, and Gil Hirsch – watched Marc Zuckerberg present his vision for the Metaverse, the three-dimensional virtual world where we will all live and work in a few minutes. years, the main thought that came through their heads was, “What took you so long?” “

For years, the entrepreneurial team at StreamElements has watched what went on under the noses of social media and major cable and streaming companies: more and more young people are choosing to disconnect from traditional TV networks and even television networks. streaming services, becoming what the traditional industry calls “inaccessible”. As Netflix CEO Reed Hastings said, “Disney Plus and Amazon Prime scare me less than YouTube and Fortnite.”

Access the inaccessible

In fact, they are very accessible to anyone who knows them and knows where to find them. They live in the square virtual world of Minecraft – currently the most viewed game on YouTube – in 3D games like Roblox, the frenzied universe of Fortnite, and in arcade games like World of Warcraft and League of Legends. When not playing, they watch other influencers spreading themselves playing adventure or chess games, programming code, or just sharing their day-to-day experiences or thoughts. Although the vast majority, both audiences and broadcasters, come from the world of video games, video games are just a pretext for socializing.

“These influencers only play part of the time – the rest of the time they watch music videos or trailers together, talk about Covid or laugh with their audience,” said Doron Nir, one of the founders of StreamElements, at “Globes”.. “They are gamers but they are also community managers. They are the rabbi and pastor of their audience, who consume all the content they put out, just as the older generation, when they were children, absorbed it all. what came out of MTV’s The Mouth of VJs. “

And they’re doing it less and less on older platforms like Facebook or Twitter, more on YouTube, TikTok, and Twitch – the Amazon-owned YouTube-like site that allows these opinion makers (“streamers”) to broadcast online. direct to their subscribers. Conversations are not conducted through the usual means, but through Discord, a distributed, almost underground service that allows gamers to communicate over computer games through text messages, voice calls, and video calls.

The advantage of the game

Not everyone is interested in this world of young people, cut off from the mainstream media. Big players, like serial entrepreneurs Doron Nir and Or Perry, are more likely to understand the exponential growth in the industry. Five years ago, Perry saw the number of streamers increase on Twitch and implemented StreamElements to allow them to earn sponsorships and get paid by their fans. Nir, who, along with Perry, started the Israeli computer game website Vgames over a decade ago, saw how social networks and live video and streaming platforms were losing their power to the creators of independent content that operate on multiple platforms simultaneously. Nir realized that the growing community of player-broadcasters needed a single solution that would allow them to distribute content across all platforms at once, stay in touch with their audiences, and leverage their fame. to generate income.

They were joined by co-founders Reem Sherman (CTO), who was previously head of development at Pepper (Bank Leumi’s digital banking platform), who is also working with Nir to create the Israeli podcast network at success Geekonomy, and Gil Hirsch, CEO of Face.com, which was acquired by Facebook about ten years ago.

Creators have the power

One of the major reports leaked within Facebook in recent months concerned the inability to attract young, cutting-edge content creators. Younger users perceive Facebook as an outdated platform, used more for conversing with older family members, and less for communication between young people who use alternative platforms like Snapchat or Discord. One conclusion that Facebook drew was that it had to attract serious content creators and pay them a lot. Like Facebook, more and more companies are realizing that power is shifting from platforms to creators.

StreamElements had already realized the power of creators five years ago and made the strategic decision not to charge creators but to provide a free service, and to charge only on every dollar entered. The company has also decided not to integrate any advertisements or images. in streamers broadcasts. Instead, StreamElements focuses on providing sponsorships for creators, who incorporate products and logos during their live broadcasts. For example, for Sony Studios or 20th Century Studios, streamers StreamElements filmed a live review of the trailer and a viewer recommendation. Another streamer, specializing in audio, recommended the Sennheiser headphones, while another player-streamer proudly showed off how he ate Nutter’s butter cookies and drank 7 Up to stay alert during a long gaming session. video.

Income has doubled

With direct access to tens of thousands of independent broadcasters, StreamElements has managed to double its revenue – and influencer revenue as a result. Gross revenue in 2020 was $ 23 million, while 2021 is expected to be $ 50 million. Since 70% of revenue goes to creators, StreamElements will end up with an estimated gross profit of $ 10-15 million by the end of the year. The fame, and the money that goes with it, encourages more and more young people to become content creators and join the platform; the number of streamers at StreamElements has grown from 700,000 last year to 1.2 million today – the best year the company has grown.

To continue to attract more content creators and compete with platforms like Logitech, StreamElements has broadened its marketing options. It has set up an online store for creators to sell products such as shirts or mugs, a payment platform for donation transfer, and a video on demand interface so that streamers can keep watching. earn money even when not broadcasting.

Flow elements

  • Business: A platform for independent video broadcasters
  • Story: Founded in 2017 by Or Perry, Doron Nir, Reem Sherman and Gil Hirsch (CEO)
  • Statistics: The company, which employs 220 people and is valued between $ 400 million and $ 500 million, has raised $ 116 million, including from Softbank, State of Mind Ventures, Pitango, PayPal, Mivtach Shamir and Menora Mivtachim. Revenue in 2020 was $ 23 million and is expected to reach a revenue rate of $ 50 million this quarter.
  • Competetion: The biggest competitor is Streamlabs, which was acquired by Logitech for $ 106 million and has no platform to market. The company, founded in 2011 by Murtaza Hussein and Ali Moiz and employing 62 people, has raised $ 38 million.

Posted by Globes, Israel business news – en.globes.co.il – December 7, 2021.

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