Twitch has announced an important change that mainly affects its most famous streamers.
Generally, people who stream on Twitch pay a 50% commission on their net earnings on the platform. But the top 10% of streamers have a more beneficial deal that allows them to enjoy 70% of their subscription revenue, paying Twitch a commission of just 30%.
A little over a year ago, Twitch stopped offering premium deals to streamers who didn’t already have these terms. And in an open letter published on Wednesday, Dan Clancy, president of the platform, has announced that those deals will be capped at $100,000 starting in June of next year:
What we’re going to do, for those streamers who continue to have these premium deals, is modify their deal so that they continue to receive their 70/30 revenue share ratio for the first $100,000 they earn through streaming revenue. subscriptions. Revenues over USD 100,000 will be split using the standard 50/50 commission. We’re announcing this change now, but it won’t go into effect until after June 1, 2023.
Twitch admits that the distribution was not fair:
“First of all, we had not been transparent about the existence of such agreements. Second, we weren’t consistent across the board with the necessary requirements, and generally it was the top streamers who benefited. Finally, we don’t think it’s right that those with standard contracts have different commissions depending on the size of the streamer.
However, the big streamers were essential to the growth of Twitch, and now they are going to see their incomes considerably reduced (since they are paid well over $100,000 a year).
How does the company justify it? First, by arguing that features like Prime, Community Giveaways, Hype Train, and the Ad Incentive Program have boosted streamers’ revenue per viewer hour by 27% over the past five years, which means that now generate three times more money than five years ago. Twitch pays streamers the same for a Prime subscription as it does for a regular subscription, even though they are free for Amazon Prime subscribers.
Second, Twitch claims that the costs of their service are very expensive, on the order of $1,000 per month for each streamer with 100 concurrent viewers broadcasting 200 hours per month.
Will the Amazon subsidiary manage to convince its content creators or will this be the straw that breaks the camel’s back for them to go to YouTube?