Amazon's (AMZN) Twitch Is Bigger Than CNN - Macquarie
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Macquarie analyst, Benjamin Schachter, reiterated his Outperform rating on shares of Amazon.com (NASDAQ: AMZN) after accumulating a year's worth of Twitch.TV viewing data. Now that the data is maturing, trends can be seen and comparisons can be made:
Perhaps the biggest revelation is that Twitch attracted more viewers than CNN. January average concurrent viewers on Twitch showed a record 962k, up 22% from January 2017, and up 26% from December. For comparison, 2017 total day viewership for Fox News Channel and ESPN was ~1.5mm, MSNBC was 885K, and CNN was 783K, putting Twitch squarely among the most-watched U.S. cable channels.
Turnover is an issue clouding the esports landscape. Less than 50% of games that ranked in the top 10 weekly rankings in Jan 17 also ranked in the top 10 in 2018. eSports as a whole is becoming a more concrete opportunity, but which games and genres will be the most popular/viewed eSports over time is unclear.
Previously unknown games from small publishers, PUBG and Fortnite (both in the battle royale genre) were the big gainers y/y. This is a reminder that new hits and genres can come out of nowhere.
So what does this mean for the stock? Display ads on Amazon.com properties like Twitch are a meaningful contributor to Other revenue and rapidly growing (58% in 2017) to $4.65B which could lead to a very substantial, high margin, profit generator.
No change to the price target of $1,750.
Shares of Amazon.com closed at $1386.23 yesterday.
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