Livepeer Q4 2024 Brief

Building decentralized video apps like Twitch or TikTok requires live and on-demand video streaming infrastructure. Based on a user’s bandwidth and device, video content needs to be processed — i.e., transcoded — into viewable formats. While cloud providers like AWS, Google, or Microsoft are commonplace solutions for video transcoding, they incur high costs.

Livepeer Q4 2024 Brief

Performance Analysis

Demand for Livepeer services comes from apps and developers needing video transcoding, live-streaming, and video generation capabilities. This includes decentralized social media (DeSoc) applications, Web3-native platforms, and traditional Web2 applications requiring scalable video infrastructure. While platforms like TikTok, Twitch, Spotify, or SoundCloud rely on centralized infrastructure for streaming, similar applications in the Web3 space — such as decentralized video platforms, music streaming apps with tokenized incentives, or NFT-based media platforms — could leverage Livepeer’s decentralized video streaming and transcoding services.

Network

Livepeer’s network usage can be gauged by estimating the number of minutes of video transcoded.

Livepeer’s transcoding network usage increased by 10% QoQ, rising from 32 million in Q3 to 35 million in Q4 2024, and saw a 15% YoY increase from 30 million in Q4 2023. This growth was likely driven by AI-powered video processing advancements, real-time streaming enhancements, and expanding developer adoption.

A key driver was the Livepeer AI SDK launch in Q4 2024, which enabled AI-powered media generation such as image-to-video, upscaling, and AI-enhanced text processing, increasing video processing demand. The introduction of Cascade further accelerated adoption by shifting from batch AI processing to real-time AI video enhancements, supporting AI-driven livestream analytics, automated video agents, and interactive avatars, significantly increasing transcoding workloads.

Additionally, Livepeer’s partnership with Fishtank, an interactive streaming platform, played a role in sustaining growth. After reaching one million viewers and generating $3 million in revenue in Q3 2024, Fishtank’s continued use of Livepeer Studio in Q4 reinforced Livepeer’s position as a leading decentralized video infrastructure provider.

Fees from Transcoding

Services using the Livepeer network pay demand-side fees in ETH to access transcoding services. Node operators (orchestrators) earn these fees for processing video and distribute a portion to their delegators based on their fee-sharing structure. The likelihood of receiving transcoding work is influenced by stake weight; orchestrators with higher stake are prioritized for more work, leading to greater earnings in transcoding fees. This system incentivizes both node operators and delegators, reinforcing network participation and security.

Livepeer’s demand-side fees from transcoding increased 18% QoQ, rising from $62,000 in Q3 2024 to $73,000 in Q4 2024, and saw an 8% YoY increase from $68,000 in Q4 2023, aligning with overall usage growth. This higher-than-expected fee growth compared to usage was likely influenced by Ethereum’s price surge in Q4 2024, which increased approximately 11%.

Since transcoding fees are often denominated in ETH, the rise in Ethereum’s value elevated the USD-equivalent fees collected on Livepeer, contributing to the strong 18% QoQ growth.

Fees from Livepeer AI

According to Messari's report, Livepeer’s AI Subnet, launched in Q3 2024, marked its expansion beyond transcoding by enabling AI-powered video generation using its GPU-based compute infrastructure. In Q4 2024, this evolution continued with Cascade, introducing real-time AI video processing for applications like automated video agents, live analytics, and AI-enhanced content creation. These advancements position Livepeer as a decentralized media compute provider, extending its role beyond traditional video transcoding.

In the Livepeer AI ecosystem, tickets and fees represent the economic framework for compensating node operators performing AI-powered video processing. Winning tickets are issued as part of Livepeer’s probabilistic micropayment system, allowing operators to redeem them for ETH-based fees. These fees reflect demand for AI workloads, making them a key indicator of AI adoption and network revenue.

In Q3 2024, Livepeer AI usage generated $15,000 in fees, accounting for 24% of the network’s total transcoding fees, with 4,800 tickets issued at an average cost of $3 per ticket. However, in Q4 2024, AI-related fees dropped to $7,000 (10% of total transcoding fees), with ticket issuance falling 62% QoQ to 1,847 tickets, and overall fees declining 52% QoQ. Despite this drop, the price per ticket increased 25%, from approximately $3 to $4, suggesting a shift toward higher-value AI workloads rather than a pure decline in demand.