This former Apple designer is taking on Amazon’s Twitch with $146 million and Fox’s backing
Caffeine founder and CEO Ben Keighran talks about why live streaming is much more than gaming—it’s the future of TV.
A new streaming platform launching this week may be giving us a peek at the future of broadcast entertainment.
And it’s not Disney Plus.
Welcome to the other streaming wars.
Live-streaming startup Caffeine, started by former Apple designer Ben Keighran, is emerging out of a two-year beta today and aims to overtake Amazon’s Twitch and Microsoft’s Mixer as the world’s leading live broadcasting platform. The official release version features a completely new design for its website and iOS and Android apps that combines editorial, algorithmic, and social connections to make it easier to discover live broadcasting from gamers, entertainers, and athletes, as well as create your own interactive broadcasts featuring live television content.
To date, the company has raised $146 million from lead investors like Fox, Andreessen Horowitz, and Greylock Partners.
Twitch is the undisputed king of live-streamed gaming, but Keighran is betting that Caffeine’s more diverse focus to go beyond gaming—into entertainment and sports—will make it a more attractive place for both viewers and creators.“The company’s thesis is that if you can become the place where teenage America wants to go to watch not only live Fortnite but also live X Games, live Coachella, and things like that,” says Keighran, “you can eventually become the place for their movies and TV shows, too.”
Caffeine already has partnerships with Fox Sports, the Big East Digital Network, ESPN X Games, Red Bull, Dream Hack, and FaceIT to give it a trove of sports and esports content that users can watch but also stream with their own commentary. The company also has two studios in Los Angeles for its creators and partners to produce original content. In October, it also signed an exclusive deal with Migos’s Offset, who’ll not only be streaming his gaming there but also hosting a monthly variety show. Caffeine says Offset attracted more than 40,000 fans to its platform in his first four days, and so far his content has been viewed more than seven million times. Other celebrity and artist creators include Lil Xan and The Game, who’s hosting a weekly show called Game Time.
[Watch: Offset Games on YouTube]
The platform’s design feels appropriately new but also familiar. Keighran spent years designing the interface and search on Apple TV, and Caffeine’s layout feels like a cross between that and others most of us are already using such as Netflix and Spotify. On the homepage, you get a mix of content based on what’s trending, what you’ve been watching, people you’re following, and a mix of other stuff that the algorithm thinks you’ll like based on all of those combined.
Keighran says another technological difference between Caffeine and Twitch is in its ease of use and quickness. “In just a couple of clicks, you can stream Red Bull 24/7 and be the commentator, you can stream Fortnite in one click, you can create an entertainment stream and talk about the new sneaker you just got, and you can do that all in one place,” he says. “And it’s all in real-time—there’s no delay in the video, whereas on Twitch, there’s up to a 60-second delay.”
Another huge aspect of live streaming is audience interaction, and Caffeine’s comments system is more like an interactive chat, in which viewer comments are prioritized by your social connection (you’ll see comments by people you follow first) and those that are up-voted Reddit-style. It’s also a major cog in the company’s business model. Caffeine has about 50 digital items for sale, like glorified emoji that viewers can use to cheer on or get streamers’ attention. They range in price from 20 cents to a couple hundred dollars, and the streamers themselves get 50% of that revenue. For content partners like ESPN or Fox, they receive a percentage of the remaining 50%.
Keighran says that this gives incentive to viewers not only to interact with and support their favorite streamers but also to start streaming themselves.“Any kid can come on and they can stream Fortnite or Big East digital network, and they can make money by getting their friends to buy these, whether they’ve got five people watching or 50,000,” he says. “When they earn the money, they can recycle it back into the platform to have fun with other people—or they can cash out and try and make a business out of it. It’s super powerful and really advances well and truly beyond where things have been with the current big streaming platforms that have been out for a while, like Twitch.”
The proposition here is that whether you’re Offset or just some guy in his basement, you might start live-streaming yourself playing Fortnite, but Caffeine gives you a chance to branch out into sports or entertainment, to maybe even producing a show someday at its studios, and all of it lives in one place without having to splinter your audience across a bunch of different places.
The company is betting it could be enough to lure creators from other platforms to Caffeine. “It could be YouTubers, Instagrammers, or even Twitch people looking for a pathway to ultimately become a big star on this platform across that broader set of categories, sports, entertainment, and gaming,” says Keighran. “And with the Fox and Disney relationship, there’s all sorts of other potential opportunities in that as well with linear TV and really becoming a celebrity across digital and linear.”
The Amazon-size elephant in the room of course is named Twitch, which will be fighting to keep its current hold on more than 75% of the live-streaming market in the third quarter of 2019. And its biggest area of growth is in non-gaming content. This week, Twitch launched its new broadcasting software called Twitch Studio in beta, aimed at getting novices up and streaming more quickly and easily.
But if Caffeine can’t win new users and viewers over just yet on its content options, it’s other pitch over Twitch is safety. In an August Medium post, Keighran wrote about how the industry as a whole needs to work harder against thing like “invasive ads. Broken moderation. Porn. Trolls. The unfettered distribution of conspiracy theories. Ineffectual bans.” For its part, Caffeine uses a combination of machine learning and human moderators, as well as giving both streamers and viewers the ability to block people they don’t want to hear from.
“There are a lot of lessons we can learn from mistakes that have been made in the past, building social platforms, toxicity, bullying, inappropriate content,” says Keighran. “We don’t want to re-create those mistakes by just copying the features and technology of the past. We’re really trying to invent the future of TV here and really reimagine broadcasting.”
Originally published in Fast Company on 11/14/19 by Jeff Beer.
