A few weeks ago, Twitch announced that their revenue distribution for streamers would change from a 70/30 split from paid subscriptions to a 50/50. The paid subscriptions on the platform start at 4.99$. It allows subscribers to reward and support their favorite streamers while accessing exclusive content. However, it also means creators’ cut would decrease to an even distribution with Twitch; instead of earning more than two-thirds of the overall revenue. Naturally, the news placed Twitch on the hot seat.
Even though most streamers on the platform were already on the 50/50 split, the announcement generated debate. The measures targeted only some streamers, focusing on top content creators. Because of this, some users feared that those top streamers might use more ads to maintain revenue. Amid the debate, Twitch had something to say about it. A post on their blog’s website stated further details and the implications of the decision. They claimed “it was necessary to keep the content’s quality.” Still, the official statement didn’t soothe opinions, and targeted streamers started considering switching to other networks
It wouldn’t be the first time Twitch lost top streamers over other platforms. For example, Ludwig Ahgren broke the record in Twitch for subscriptions in 2021. Yet, he preferred an alternative career on YouTube (YT). There, they offered him an attractive proposal and stability in the future. Even though by that time, both platforms had the same split revenue, YouTube Gaming seemed to have a grounder organizational structure than Twitch. So, if YouTube continues to play the right cards, it might begin a “streamer’s migration.”
Nevertheless, since the change will not go into effect until June of 2023, it is still too early to predict the harm to Twitch’s subscription base. However, the monetization system is already in the spotlight. The public debate has shifted direction, and more are starting to question affiliate programs in platforms. So how do platforms incentivize content creation through monetization? Do all use the same strategy?
The ways to distribute revenue are as diverse as there are types of content, so each platform chooses its rewarding method. The top tools are subscriptions (or memberships), ads, direct sales, and the number of views. Additionally, each platform has its own “rules” that the potential affiliates must meet to access the previous tools. Twitch, for example, distributes revenue from paid subscriptions. However, before being part of their “affiliate program,” streamers must fulfill a set of requirements. Some of them are minimum minutes of content, “unique broadcasts,” concurrent viewers, and a certain number of followers. If applicants don’t meet the standards, then Twitch doesn’t reward them. YouTube might seem more generous since they have a 70/30 split. Yet, the reality is that they also defined “minimum eligibility requirements” to join the YouTube Partners Program (YPP). The program “gives creators greater access to YouTube’s resources and monetization features.” Still, beforehand, they must meet six stringent requirements: having at least 1.000 subscribers, 4.000 valid public watch hours in the last year, following their policies and having an account on an advertisement display website (AdSense). Given the generous profits streamers are reported to earn, such requirements seem reasonable. In fact, for many users, some platforms bring in a win-win deal. As a result, more of them try their luck and join the streaming business.
Still, the recent Twitch case has also put into perspective the power that platforms withhold and the contribution of streamers to their profit volume. Indeed, creators are essential for platforms, no matter the revenue split they are the primary reason for their views and subscription traffic. But they also depend on the platform’s decisions, which undermines their “worker-employer” relationship.
Twitch has pulled the trigger for streamers to act in response to an unexpected turn of events. The new monetization system has started an additional trend: creators work together as a “streamers union.” Although it is not precisely a trade union, in a figurative sense, streamers are joining forces. Since the measure was announced, they have tried to use their collective influence to pressure the platform. But, for now, only smaller creators have joined; thus, they have yet to gain an official response from Twitch or a step back from their decisions. Nevertheless, the platform might have something to worry about if bigger streamers step in. Interestingly, their cause is gaining the recognition and support of viewers, who are worried about the effects on the content’s quality or the use of more advertisements in the channels.
All these controversies have shed some light on what is happening in the creator’s community, but it leaves the subject of future consequences unresolved. It is time to ask ourselves how this change might or not influence the content we access hereafter and see if Twitch’s decision is correct or not.
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1) What was Twitch’s old revenue distribution model?
2) What is Twitch’s new revenue distribution model?
3) What are the implications of Twitch’s new revenue distribution model?