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Twitch is cutting subscription revenue for top streamers

The long-standing 70/30 subscription share rate is changing in a big way for Twitch's biggest streamers.

Ozzie Mejia

September 21, 2022 10:45 AM

Twitch

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The topic of subscription revenue sharing has popped up at Twitch and things appear to be getting ugly between the company and its top streamers. For years, top Twitch streamers have typically made a 70/30 split off of viewer subscriptions. However, the company is now looking to change the way things are done and reducing splits to 50/50. Streamers are understandably infuriated and, in an effort to try to calm the waters, Twitch President Dan Clancy stepped forward on Wednesday and addressed the community.

In our latest blog post, we tackle a topic that's been at the forefront of the community for some time - the rev split.

We also provide a related update around monetization for a subset of Partners.

Read here: https://t.co/zP6xcCtJAQ pic.twitter.com/KAwOMDIkmm

— Twitch (@Twitch) September 21, 2022

The full letter has been posted to the Twitch Blog. It explains that premium streamers can retain their 70/30 split for the first $100,000 USD made over a 12-month period, at which point the share falls to 50/50. It's a change that stands to go into effect starting on June 1, 2023. However, it's the official explanation of why Twitch is moving away from 70/30 splits that appears to be getting the most attention.

When we first established a 50/50 revenue share split, it was to signal that we’re in this together. You all do the amazing work you do to create great content, engage with your audience, and grow communities. On our side of the partnership, it’s our responsibility to make continuous investments in the products and people that make your growth possible.

At the time of this posting, more than 22,000 of you have weighed in on UserVoice asking us to move all streamers to 70/30 and to pay streamers faster. Let’s chat about the latter part first.

As you probably heard by now, we’re in the middle of rolling out the largest change to payouts in years by cutting the payout threshold in half to $50. This is an important middle step that will help streamers put money in their pockets now, while getting us closer to our goal of same day payouts and lower thresholds.

Investments like these are paying off for streamers. Products like Prime Subs, Community Gifting, Hype Train, and the Ads Incentive Program, to name a few, have driven an increase of 27% more streamer revenue per viewer hour every year over the last five years. This means the same viewer hour now earns you three times more money than it did five years ago, on average. Our investments into your monetization options have already and continue to put more money into streamers’ pockets than 20% more subs revenue share would have.

Prime Subs often get lost in the conversation when it comes to revenue share. For Prime Subs, we pay streamers the same amount they’d receive for a regular subscription even though it is included as an added benefit of their Prime subscription. Combined with other monetization products, Prime Subs increase your effective revenue share by approximately 15%, to about 65% total. This number varies by streamer size and location, but subscription revenue share is not the full picture on revenue share for streamers.

Lastly, we have to talk about the cost of our service. Delivering high definition, low latency, always available live video to nearly every corner of the world is expensive. Using the published rates from Amazon Web Services’ Interactive Video Service (IVS) — which is essentially Twitch video — live video costs for a 100 CCU streamer who streams 200 hours a month are more than $1000 per month. We don’t typically talk about this because, frankly, you shouldn’t have to think about it. We’d rather you focus on doing what you do best. But to fully answer the question of "why not 70/30," ignoring the high cost of delivering the Twitch service would have meant giving you an incomplete answer.

It's this reasoning that many subscribers, as well as outside spectators to this news story, are finding bothersome. Yes, costs are a real issue. However, sympathy for the company starts to go down when realizing that they're owned by Amazon. Even though overall viewing and streaming numbers have declined, livestreaming on Twitch remains big business to the point that many top streamers consider it their main income source. Many top streamers, including Jacksepticeye, FWiz, and Big E have responded to Twitch directly and expressed their displeasure. AbleGamers' Steven Spohn notes in his response that these actions are meaningless because they essentially cap the growth for the top creators while also doing nothing for the everyday streamer.

The timing of Twitch's statement could also prove to be a problem for the company. TwitchCon is a few weeks away and it comes just as the company's top streamers are either moving away from exclusivity or leaving Twitch entirely for new pastures like YouTube Gaming. Twitch is betting on viewers gravitating towards "the brand" and less towards individual personalities, but it could be a dangerous bet to take, especially as the company's convention celebrating those personalities is about to take place.

There's a lot more to watch with this Twitch story, so we'll be sure to follow it at Shacknews. The irony of it happening during SUBtember is not lost on us. Keep it here for any updates.

Ozzie Mejia

Senior Editor

Ozzie has been playing video games since picking up his first NES controller at age 5. He has been into games ever since, only briefly stepping away during his college years. But he was pulled back in after spending years in QA circles for both THQ and Activision, mostly spending time helping to push forward the Guitar Hero series at its peak. Ozzie has become a big fan of platformers, puzzle games, shooters, and RPGs, just to name a few genres, but he’s also a huge sucker for anything with a good, compelling narrative behind it. Because what are video games if you can't enjoy a good story with a fresh Cherry Coke?