Game streamers want to make more money. Developers want more users downloading their apps.
Now a new Seattle startup is helping make both happen at the same time.
GawkBox today announced a $3.7 million Series A investment round led by Madrona Venture Group, with participation from London Venture Partners and angel investors.
The year-old company has developed a platform that allows Twitch or YouTube live game stream viewers to tip game streamers by downloading and using apps. Every time a user reaches a certain milestone on the app — leveling up a character, completing a challenge, etc. — the app developer will tip the streamer on behalf of the user. GawkBox calls this “sponsored tipping.”
It’s a unique way for viewers to show support for streamers without having to enter credit card information or spend actual money. It also gives app developers a way to increase engagement with their product by paying what amounts to a referral fee that goes to streamers, which gain access to a new revenue stream beyond subscription fees, affiliate programs, and traditional sponsorship deals.
GawkBox CEO Chris Brownridge, a former Google employee who was most recently an executive at Vungle, told GeekWire that tipping makes up around 70 percent of what an average streamer earns. But many fans don’t tip for a variety of reasons, even if they’d like to. Some don’t have the cash to shell out, and it can be tedious to upload payment information, for example.
“We thought there must be a better way to enable everyone to participate in tipping,” Brownridge said.
Game streamers create an account on GawkBox and overlay the service on their live streams. Fans are then presented with instructions for installing an app and how to achieve milestones to enable tips that grow with more engagement.
“The more you play [on an app], the more you can support streamers,” Brownridge said.
For app developers, GawkBox provides a low-risk way to get more people using their apps. It also encourages more engagement by using increased tip opportunity as an incentive for users.
GawkBox makes money by taking a margin of the tip provided by the app developer. It launched the platform in March and more than 20,000 streamers have created an account.
“Live streaming is a massive, rapidly-growing market, but no one has solved the problem of how to monetize live content,” Daniel Li, a senior associate at Madrona who will join the GawkBox board, said in a statement. “The GawkBox team has created a unique solution that is a win-win-win for all parties – streamers earn more income, fans get to support their favorite streamers in new ways, and advertisers have a new way to drive engagement in their apps.”
Brownridge said GawkBox is the first company to deploy a tipping function that includes app developers as part of the process.
There are other competitors like StreamLabs that help streamers earn money from viewers. But GawkBox is different because it lets fans support content creators without spending any money, Brownridge said.
Last year, Twitch unveiled its own tipping function called “Cheering,” which lets users tip streamers with Twitch’s own currency,”Bits.” Engadget reported that the in-chat tipping program generated $6 million last year.
Brownridge said GawkBox supports what Twitch has rolled out with Bits and Cheering.
“GawkBox is designed to work adjacent to these programs and help creators generate income and gather support from their entire fan base, whichever platform they sit on,” he noted.
The target market for GawkBox will expand as esports continues to grow; Twitch has 2.2 million unique monthly streamers on its platform. GawkBox is also exploring verticals beyond gaming — the same model could be applied to people testing a beauty product on a live stream, or doing a cooking show, for example.
Brownridge said that soon, “everybody will become a creator of content.” He said live video streaming will become “the predominant entertainment medium” within five years.
“This is just the beginning of the growth of streaming as a medium,” he added.
Brownridge and his co-founders — Andrew Allison and Tony Chong — were part of the early team at Vungle, a mobile video advertising company. In addition to Madrona and London Venture Partners, they’ve also raised cash from investors like Jon Zweig, who co-founded companies like AdColony and AppOnboard, and Erlend Christoffersen, the former CMO of Supercell.
GawkBox will use the fresh funding to hire marketers, engineers, and more. It employs 11 people and expects to surpass 20 employees by 2018.