How is Kick subsidizing Twitch with AWS Fees?

There are several potential risks of relying on a single provider for critical business operations, as demonstrated by Kick's use of AWS IVS.

How is Kick subsidizing Twitch with AWS Fees?

Kick, a newcomer to the video streaming industry, is utilizing Amazon Web Services’ (AWS) Interactive Video Service (IVS) for their platform. However, Cyrus Hall, a former Twitch employee, believes that Kick is subsidizing Twitch by paying to use their video system through AWS. While he acknowledges that IVS is the best video system for this use case, he believes that paying such a high cost is not a sustainable growth plan.

According to Hall, building one’s own content delivery network (CDN) may not be financially sustainable for start-ups due to the high level of technical expertise and infrastructure required. As a result, many start-ups may opt to “blitz-scale” while burning money and then switch to a more sustainable option, as Twitch did in the past.

https://www.youtube.com/watch?v=yoIztYWZ5ew

It’s important to note that Kick is connected to a cryptocurrency gambling site called Stake, which may be looking for a new platform to attract gamers since Twitch has banned some forms of gambling. While it’s unclear if Kick’s ultimate goal is to create a sustainable platform or serve as a short-term solution for Stake, their decision to use IVS raises questions about the cost-benefit analysis for start-ups in the video streaming industry.

Related: Twitch CEO reveals that Twitch might move away from pre-roll ads soon

Why is it a risk to rely on a single provider for Critical Business Operations while we take a look at Kick’s use of AWS IVS?

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Kick’s decision to use AWS IVS may have several advantages, including convenience and ease of use. However, relying on a single provider for a critical aspect of their business can also pose a significant risk. If there are changes to the pricing structure or the technology itself, it could negatively impact the operations of the business.

One reason why it’s a risk to rely on a single provider is that the business becomes dependent on that provider’s infrastructure and services. This dependency can make it difficult for the business to switch to a new provider or solution if the current one is no longer viable or becomes too expensive. In the case of Kick, if AWS were to raise prices or change their pricing structure, Kick may have to incur significant costs or look for alternative solutions.

In conclusion, while Kick’s use of AWS IVS may have its benefits, it’s important to consider the potential risks of relying on a single provider for a critical aspect of the business. It may be prudent for businesses to explore alternative solutions or consider diversifying their services and providers to mitigate these risks.

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