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Live video startup Twitch builds studio to woo gamers, advertisers

By Malathi Nayak

SAN FRANCISCO (Reuters) - Live streaming startup Twitch, which grew its users over 40 percent in the past year, said it is building a studio in San Francisco to host videogame broadcasts and attract more advertisers and viewers to its novel live chat format.

The venture-backed startup, revealing its latest numbers, averaged 50 million monthly active users in June versus 35 million a year ago. That growth rate is down from when they doubled users in all of 2013, but user numbers typically pick up in the second half, a Twitch spokesman said.

"We want to test ways to help our everyday streamer produce more and more premium content," chief operating officer Kevin Lin said in a recent interview. "We don’t want to move in to (making) our owned-and-operated content."

Twitch raised $20 million in funding in September from game publisher Take-Two Interactive Software and firms such as Bessemer Venture Partners and Thrive Capital. It is trying to ramp up overall quality and capitalize on a surge of interest in its live interactive webcasts of professional gaming competitions and even individual videogamers at play.

Its format, which lets viewers message players and each other as live gaming ensues, is garnering interest as one of the fastest-growing segments of digital video streaming, which in turn is attracting more and more ad dollars. Google was in early-stage talks in recent months to acquire the startup, according to the Wall Street Journal, spurring speculation that the Internet giant was keen on stepping up its own live game-streaming efforts on YouTube.

Investors have noticed Twitch's rapid growth, from some 3.2 million players when it initially launched in 2011. Some of its most-followed players rake in six-figure salaries through a 50-50 split in advertising revenue, $5 monthly subscriptions to livestream channels, and even spontaneous donations from fans.

Viewer engagement remains steady at over 100 minutes per day per user, Twitch executives said.

Its new studio, which will be opened up to select livecasters later this year and be fully operational next year, will sport the usual professional paraphernalia of TV studios from cameras and audio gear to green screen technology.

"The idea came about because securing studio space can be costly and inflexible, so we wanted a place where partners can create studio grade content," said Marcus "djWHEAT" Graham, director of community and education at Twitch. "The studio also enables Twitch to offer broadcaster and production training to the partners who wish to take their own production to the next level."

Twenty four year-old Molly Fender, known as "MissMollyLolly" on her ten-month old Twitch channel, could be among the studio's early beneficiaries. Fender who plays video games from horror titles to "Hearthstone: Heroes of Warcraft" said she is working towards making a living on Twitch.

"When you first start it is kind of hard to get over the initial hump," Fender said. "It's tough but totally doable."

(Reporting by Malathi Nayak; editing by Andrew Hay)

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