Creators react to Twitch’s updated revenue share model
Twitch is still the largest livestreaming platform by a significant margin, but recent changes to the way it doles out subscription revenue have spooked some creators into changing how they stream — or considering a jump to other platforms.
For years, Twitch has signed special agreements with top streamers to give them a more favorable 70/30 split of subscription revenue. And while only a relatively small group of streamers have received these deals, they have long been an aspirational goal for smaller Twitch streamers looking to turn their hobbies into full-time jobs.
In a Sept. 21 blog post, Twitch president Dan Clancy announced that from June 1, 2023, onward, streamers with pre-existing agreements would only receive the 70/30 split for their first $100,000 earned through subscription revenue, with revenue above that being split at the standard 50/50 share split. The blog post also said that Twitch had already stopped signing special agreements with streamers over a year ago.
These changes to Twitch’s premium revenue share agreements were a major topic of conversation at last weekend’s TwitchCon, the annual gathering of Twitch streamers in San Diego. To learn more about how creators are reacting to the changes, Digiday reached out to five Twitch streamers across categories of different sizes and genres. Here’s a rundown of what they had to say about the news — and how Twitch is responding to the criticism.
The key numbers:
- In August, Twitch boasted 1.865 billion hours watched, compared to 305 million on YouTube Gaming and 399 million on Facebook Gaming, according to StreamElements’ August 2022 State of the Stream report. “The hours watched on the platform has doubled since the pandemic started, which could explain the need to change up how they cover these costs,” said StreamElements CEO Gil Hirsch.
- A typical Twitch channel subscription costs the viewer $5, and Twitch’s default revenue split is 50/50, with half going to the streamer and half to the platform. For years, Twitch has signed special agreements with certain streamers offering them a more favorable 70/30 split.
- Recent changes to the agreements mean that this more favorable split will only apply to streamers’ first $100,000 in subscription revenue, but Twitch says this will only impact roughly 10 percent of the streamers who currently have special deals with the platform.
Clancy’s blog post blamed high operating costs for Twitch’s need to reduce streamers’ share of subscription revenue. “Using the published rates from Amazon Web Services’ Interactive Video Service (IVS) — which is essentially Twitch video — live video costs for a 100 CCU [concurrent users] streamer who streams 200 hours a month are more than $1000 per month,” he wrote.
This part of the announcement rubbed many streamers the wrong way, with some pointing out that both Twitch and AWS belong to Amazon, making it exceedingly unlikely that Twitch has to pay the published rates for AWS video hosting.
Twitch vp of monetization Mike Minton acknowledged the inaccuracies in the blog post, but stressed that Amazon expects Twitch to be a sustainable standalone business separate from AWS.
“I get that maybe the community didn’t receive it the way that we had hoped, but the idea was to illustrate that it is a very expensive service, and trying to contextualize it in a way that the community could understand,” Minton said. “Unfortunately, it was inaccurate in a couple of different ways. Twitch does not pay the public rate of an IVS customer, but unfortunately, that’s only a very specific portion of the total cost of running a Twitch service.”
Pivoting to donations
To circumvent Twitch’s revenue share changes, some streamers are considering asking viewers to donate to them directly instead of subscribing to their channels through the platform, allowing them to receive the full benefit of the payments, sans PayPal fees. “We allow streamers to monetize in the ways that they believe are best for them and their community,” Minton said. “If that’s their choice, then as a service, that’s what we’ve historically allowed them to do.”
However, streamers told Digiday that asking their fans to switch from subscriptions to direct donations is easier said than done. Twitch intentionally makes subscribing a relatively frictionless process, whereas users making direct donations are required to click over to a new tab or window.
“The issue is that gifting subs is easier, and [built-in microdonation system] Bits are a little bit easier,” said Shaun Bolen, whose channel HangTime has had a 70/30 premium agreement with Twitch since 2015. “And if they want to pay the 30 percent that we currently have for the convenience, then I want them to do whatever is fun — tipping a channel should be fun.”
Expanding to multiple platforms
Twitch recently decided to allow partnered streamers to multi-stream across other platforms, and some prominent streamers such as Tyler “Ninja” Blevins have already started doing so. The changes to Twitch’s revenue share agreements could convince more streamers to make similar moves, with others looking beyond streaming to build new revenue streams via platforms such as TikTok and Instagram.
“There’s a silver lining in this, and it’s for creators to have a wake-up call to diversify and be less risk-averse,” said Scotty Tidwell, svp of talent at Enthusiast Gaming. “These next two quarters, I think you will see a mass exodus of people streaming less. I’m not saying they’re going to leave, but they’ll put more time into other platforms for their content. And if I’m at YouTube right now, I’m really excited about the next month.”
Those hurt most
As in other similar circumstances, the people affected most by the changes to Twitch’s revenue share model are those in marginalized groups, such as women and streamers of color. Although pivoting to other platforms or cross-streaming is one potential way around the changes, streamers in these groups can have a more difficult time building audiences large enough to follow them from platform to platform.
“People in this space, who struggle to hit ‘Go Live’ anyway due to chronic health conditions, mental health conditions, things of that nature — you’re telling them that in order to be successful, they have to do more,” said RekItRaven, a streamer who kicked off the #TwitchDoBetter protests last year.
“Twitch does not find themselves creator-focused anymore; it’s business-focused,” she added. “There has to be a happy medium. I understand it can’t be fully creator-focused, because sometimes that can be bad for business, but there’s got to be more give and take.”
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