Twitch is one of the great audiovisual phenomena of the internet. The relevance of the platform, in the hands of Amazon for almost a decade, has not stopped growing in the last five years. Spain is one of the great powers, with several of the main names in streaming such as Ibai Llanos or AuronPlay. But the Spanish subsidiary for the management of local activity, which it created in the midst of the global coronavirus pandemic, declares a minuscule business for what it actually generates in the country through other group companies from Luxembourg. The Madrid-based company closed the second full year, that of the year 2022, with total income of just half a million euros and with accounting losses in its income statement. The tax invoice, after the various adjustments, implied the payment of about 8,000 euros of Corporate Tax.
The company Twitch Interactive Spain SL was created three summers ago now, in August 2020. Therefore, as with other large technology companies, the billing of its products (subscriptions or advertising revenue shared with ‘streamers’) is carried out mainly by through companies outside of Spain -although here you have a firm dedicated to the sale of internet advertising-.
In the first year of activity, in which there were barely a few months of work, nothing happened. In 2021, lately 326,000 euros of income. Last year, according to the accounts recently presented and consulted by La Información, I added 576,000 euros. All of these sales correspond to rebills to Amazon Core Europe Sarl, one of the main parent companies of the Luxembourg-based e-commerce giant. More than five years ago, the terms and conditions were signed with Twitch Europe Sarl. Now it is not clear on its website, but everything indicates that it depends on the first matrix.
Salary expenses, which are the only relevant ones in a very limited income statement due to the smaller size of the company, was what led to recording losses in Twitch Spain. Specifically, 632,000 euros were spent on salaries, which means 85,000 euros of accounting ‘red numbers’, four times more than the previous year. At the end of the year, the workforce attached to this subsidiary numbered just eight workers. This is not the staff that actually directly or indirectly manages the business linked to Twitch, as there would be dozens of workers more linked to the parent company or to other companies.
The declared losses are countable. The fiscal ones are somewhat different, due to the adjustments that are carried out a posteriori with increases and reductions in the tax base for non-tax deductible expenses such as the parent company’s incentive plan for employees through stock options. This makes the tax bill add up to around 8,000 euros in 2022. Streaming platforms such as Netflix paid 2.7 million euros after invoicing their local customers directly from Spain in 2021 -the last fiscal year available-.
Spain is one of the most relevant markets for Twitch, with big names in streaming such as AuronPlay or Ibai Llanos
The structure has remained unchanged in recent years. The Spanish company’s sole shareholder is Amazon Europe Core Sarl from Luxembourg. This is one of the most important parent companies located in the country and which is the head of many other businesses in the Old Continent. It generated practically 13,000 million euros of income in 2022 (and profits of 2,400 million) according to the accounts consulted, although it is not really broken down which branch of activity it comes from or from which specific market.
The subsidiary has two administrators who, ultimately, are responsible for part of Amazon’s audiovisual business through Prime Video. One is Manuel Reverte Castro, the person in charge of films in Spain for that division. Another is Ricardo Llorente Carbonero, head of Content at Prime Video. But beyond the formal administration of the company, there are relevant executives such as Sara Pastor, the Twitch Ads Spain sales director, that is, the entire market linked to advertising. The person in charge of ‘partnerships’ is Paula Palomino, who landed in 2021 after a stint in the NBA.
a profitable business
Spain is an important market for Twitch. Not only because of the penetration in the local population, but also because of the concentration of relevant ‘streamers’ based in the country. Ibai Llanos is the main one, but there are others that are among those with the most followers in Spanish, such as AuronPlay or IlloJuan. Some of these big names have been tempted in recent weeks by a rival platform called Kick that is looking to gain ground by pulling prices. He is doing it with some astronomical offers to add stars. This comes after the new structure of economic agreements proposed by the Amazon platform arouses criticism among some of the content creators.
Twitch was acquired by Amazon in 2014 for a little less than 1,000 million dollars, becoming, along with Instagram, one of the great technological ‘bargains’. Its business model is based on advertising revenue and subscriptions from users who follow their favorite ‘streamers’. Their figures are not published and are not broken down by Amazon. But its growth has been maintained in recent years. There are estimates that speak of thousands of millions of dollars of billing for these lines of business. Recent analysis such as that of the investment bank Needham & Company sets a current valuation of this platform of more than 45,000 million dollars.
