Is a billion-dollar opportunity “hogging” your bandwidth?

By Joseph Flaherty

Yesterday, VentureBeat reported that more than 50 billion hours of video games were watched on YouTube in 2018, roughly the same amount of time spent binge-watching the entire Netflix catalog.

It’s an extraordinary number and reflects a massive generational shift in pop culture preferences, but what’s even more interesting is how unlikely it seemed a decade ago when the major online video platforms were hostile to video game uploads.

In 2008, Vimeo banned video game uploads — outright. In retrospect, this might have been a company defining decision. YouTube hadn’t yet achieved breakout success with the “Lazy Sunday” clip from Saturday Night Live, and was just one of many viable video hosts. Picking up on the popularity of gaming might have changed Vimeo’s trajectory. To be fair, Vimeo’s founders had left the company before this decision was made, and had they been in control, I believe they may well have recognized and reacted differently to this opportunity. Still, it wasn’t until 2014, the year Amazon bought Twitch for a billion dollars, that the decision was reversed.

YouTube never officially banned game uploads, but tight limits on file size made them a less attractive venue for the genre in the early days. And even after they allowed longer movies to be uploaded, their copyright compliance processes and tools became a major bottleneck. While Twitch was enjoying explosive growth by enabling interactive live streaming, at YouTube, video game footage had to wait for days in a queue to be monetized, and their ContentID system was prone to false positives. Even when the major game companies were arguing on behalf of the players, YouTube was slow to respond.

Predicting the future is hard, even for visionaries.

It’s easy to be a Monday morning quarterback, but it’s important to remember these decisions aren’t crazy in context. In the blog post announcing their change, Vimeo noted that game videos actually imposed a heavy cost, in terms of the price of bandwidth, but also in the form of a diminished user experience for their core, paying customers. The use case that became Twitch, was seen as a bug, not a feature.

This blog post represents a turning point in the history of online video.

In neither case did these decisions prove to be fatal, or even wrong. Despite a failure to reach l33t status, YouTube is synonymous with online video, and clearly has a strong foothold in gaming. Vimeo is still a vital part of the cinematic ecosystem and chasing video games might have harmed the brand. Still, the inability to appreciate what gaming video would become gave Twitch an opening and has provided Amazon with a power-up in their battle to own our TV watching habits.

So often stories of tech disruption pit forward-thinking visionaries against old-school industries. Napster burned the record business and Amazon beat out musty old bookmongers, but the rise of gaming video proves that predicting the future is hard, even for visionaries. It also makes you wonder, “What billion-dollar opportunity is hogging your bandwidth?”