Here’s how Kick plans to get profitable

One of Kick‘s biggest draws for streamers is its near-unprecedented 95/5 revenue split, which looks even more attractive in the face of Twitch lowering its own split from 70/30 to 50/50.

Creators should be earning more than 50% from platforms. But with Kick handing over 95% of money coming in from things like channel subscriptions–and signing $100 million, nonexclusive deals–is it even possible for the place to stay open?

“Kick is not currently profitable, and that is obviously no secret,” Kick founder/CEO Ed Craven told Forbes. (Craven also co-founded online gambling site Stake.com, which he says is “completely separate” from Kick “in all regards.”) “Just like any startup, just like anyone trying to enter an extremely competitive industry, we understand that there is a cost you have to pay to enter. We’re willing to invest capital into trying to make those moves and trying to take what is already an extremely competitive piece of the market in a very highly competitive space.”

Craven says Kick plans to become profitable “sort of somewhere around the 12 to 36 months mark.”

And it plans to do that with something streamers and viewers alike just absolutely adore: ads.

“We [will] look heavily towards the advertising space as the place where we believe that Kick will see the most potential in revenue,” Craven told Forbes. “We think that there are a lot of viable opportunities in advertising in order to turn a profit.”

As Forbes

points out, ads on streaming content are riskier than ads on VOD content, because while a VOD can (and is, on sites like YouTube) scanned for potentially ad-unfriendly content during the posting process and taken down or restricted if issues are found, streaming is real-time. The world’s ad-friendliest streamer could take a hard left and decide to go streaking in the middle of a broadcast, and suddenly you’ve got unhappy advertisers.

When ads go well, still, neither creators or viewers actually adore them. Forbes also points out that many Twitch streamers run the bare minimum of midstream ads required by their contracts, and Twitch’s new CEO recently said he understands why people are frustrated with the site’s longtime practice of running pre-rolls, which make new viewers sit through 30 seconds (or more) of ads right when they join a stream.

How Kick plans to mitigate these issues isn’t clear. It’s also not clear when exactly ads will begin rolling out. Craven just says he thinks “there is a very good chance that we can pull this off.”

“I think it’s the right time, it’s the right situation for us to be doing this,” he told Forbes. “I think that in this given time, Twitch is starting to forget a little bit about what makes live streaming important and they’re starting to forget a little bit about the creators. And I think this has led to us having an absolutely perfect opportunity.”