From the scam drama to the gambling stream ban, Twitch just had one of its busiest weeks ever. But perhaps the most important move amidst the Twitch headlines was all about monetization. On Friday, This was announced by Twitch President Dan Clancy that the platform is changing its current revenue sharing model for the platform’s biggest streamers, reducing the share a streamer gets from 70% to an even 50/50 split — the same one offered to the platform’s other developers.
Streamers of all sizes were upset with the decision. For a more detailed look at why streamers aren’t happy with Twitch’s new plan, you can read a Breakdown by Ash Parrish at The Verand. But streamer dissatisfaction aside, it’s worth looking into why Twitch made that decision — and what it might signal about the future of the platform.
The short version of Twitch creators’ complaints is that they already felt that the 50/50 split offered to most streamers was too low, especially considering that competitors like YouTube (Twitch’s biggest competition, at least until TikTok live streaming grows) offering everyone this 70/30 deal. Twitch’s lowering of the earnings cap has dashed hopes of smaller developers for a pay rise in the near future.
For the high-end stars, Twitch is basically challenging them to make the jump to YouTube. After all, they just found out they could be losing thousands of dollars a month. While this may sound risky for the platform, it seems clear that Twitch doesn’t believe it really needs superstar streamers. The company is banking on its users being loyal enough to simply create new stars rather than paying a premium to keep the ones it has.
It’s not an unreasonable bet. After all, Twitch is the platform to beat for live streams right now. In the short term, Twitch is the streaming site with the most eyes on it at any given time. Some streamers like Valkyrae have already proven that moving to YouTube can be very successful, but for many others, they often see their viewership drop because their entire Twitch audience isn’t migrating to their new platform – something streamers have learned along the way Twitch’s first major exodus, with the likes of Shroud and Ninja signing deals with Microsoft’s now-defunct mixer platform.
But perhaps more importantly, especially for smaller streamers, Twitch is by far the best platform for discovering new streamers. Discoverability is terrible on YouTube. The live hub is hard to find, and the homepage aggressively prioritizes its algorithm over categories, leaving viewers with numerous hurdles to jump through to find an unfamiliar streamer to watch.
This issue creates a feedback loop where YouTube is forced to partner with major streamers who can attract established audiences in order to gain viewers, but those viewers are just fans of that YouTuber, and because it’s difficult to discover someone new, increases increasing the number of viewers for one streamer will not necessarily lead to growth for other smaller streamers.
Twitch has another secret weapon in the streaming platform war: Twitch Prime, a “free” perk of an Amazon Prime membership that gives the user one Twitch subscription per month without paying anything.
While Twitch uses some of it to justify its 50/50 split, the benefits of the product are undeniable. Prime is a way to essentially gift streamers with extra subscriptions without asking viewers to spend any money. It’s also a way to monetize a large portion of Twitch’s audience—kids—who may be using their parents’ Amazon account. These kids may not have a credit card to subscribe to monthly, but they can still subscribe to their favorite streamer with Prime.
All of this has given Twitch a massive lead over its streaming platform competition, which it retains despite losing some high-profile talent to services like YouTube. While Twitch superstars like Pokimane and Hasan still wield immense power (as they demonstrated last week when they banded together to ban gambling from the platform), Twitch’s new policy makes it clear who is actually pulling the strings. More importantly, even if Twitch Creators like xQc or loses Code Micah, Twitch’s thousands upon thousands of smaller streamers making the leap to a competitor is hard to imagine right now. For now, it’s the only streaming site with the right tools to help them become stars.
