In general, never fight a dominant competitor on their own turf unless
you are meaningfully better (think 10x), have investors with deep
pockets, and are prepared to fight a bloody war.
Instead, be a smart niche marketer: seek to win where they can't or won't play well.
Look for a niche:
- Where Twitch is weak and/or uninterested. (Ideally, you want to find one or more that has both characteristics.)
- Where current Twitch users are unsatisfied or under-served (look at reviews wherever you can)
- Where growth can be profitable for you, but would not be worth their effort.
If you're lucky, you'll find an interview where an exec from Twitch has said "we're not pursuing X, it's too small and not worth our effort". If it's too small for them but big enough for you then go after that with a vengeance.
In brief: you are far better off fighting a guerilla war that you can win than a huge war where you will always be hopelessly outgunned.
Hope this is useful.