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How Twitch lost the battle for its soul

The news that Twitch will be reducing top streamers’ revenue share from 70 / 30 to 50 / 50 signals that the platform is no longer the ‘creator first’ entity that made it so popular.

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Illustration by Nick Barclay / The Verge

The reaction to the news that Twitch intends to change how it splits revenue with partnered streamers has been, on the whole, completely and utterly negative. Streamers at every level of growth, from the big-time partners to the smallest affiliates, were displeased to learn that the 70 / 30 revenue sharing split that had been long asked for — and is the standard or better elsewhere — was not only being rejected but being slowly phased out completely. To quote the Fallout 4 meme: “everyone disliked that.” 

The Verge took a look at the response from the streaming community. I talked to content creators and their business managers and observed reactions on social media, and I found that the overwhelming sentiment is that the decision is anti-creator, signaling more broadly that the culture of Twitch has changed for the worse. 

Problems at Twitch started long before this decision came down. Last year, marginalized streamers were beset by violent hate raids, causing some to criticize what they called the platform’s slow, reactive response in protecting its creators. Barrages of ads play before and at inopportune and disruptive times during streams. There was a gambling scandal causing some streamers to question why Twitch even permits such content to be easily accessible to minors. All while Twitch’s biggest names are slowly abandoning the platform to stream on YouTube and elsewhere.

“I can say in my 10 years of working in this industry that the past week has probably been crazier than any time before it,” Ryan Morrison, CEO of Evolved Talent Agency, a management company that represents some of the top streamers on Twitch like xQc and Amouranth, said in an interview with The Verge. “Not just this, but there’s an endless array of drama going on surrounding Twitch right now.”

There are a number of ways to make money on Twitch. There’s ad revenue for running commercials during a stream, viewers can send in donations, and there’s subscription revenue in which fans pay a monthly fee that’s split between Twitch and the streamer. The overwhelming majority of streamers get a 50 / 50 split on subscriptions. So, with a roughly $5 subscription, Twitch and the creator both get $2.50.

It’s a popular community sentiment that the 50 / 50 subscription split is not enough. After all, the majority of Twitch’s value comes from the billions of hours of content its creators make and the millions of eyeballs those creators command. On Twitch’s UserVoice feedback forum, the suggestion for Twitch to change the split from 50 / 50 to 70 / 30 had over 20,000 votes.

Doritos Bowl At TwitchCon 2018
Photo by Robert Reiners/Getty Images

“I would like to see all streamers get a minimum 70 percent revenue split from subscriptions with a higher revenue split for all partners 80 percent,” wrote SaltyWyvern, the author of the post. “Currently both Facebook and YouTube streamers get a 70 percent split from subscriptions.”

In addition to bringing Twitch to parity with its competitors, there’s also so much work that goes into livestreaming and making a watchable, entertaining product. A 70 / 30 split, streamers say, would make it easier to invest more time into content creation.

“Having a higher revenue split in favor of streamers, in my opinion, would greatly benefit Twitch.”

“This would be life-changing for me as a small creator on the platform that wants to eventually go full-time,” wrote imptris of the proposed 70 / 30 split on UserVoice. “Having a higher revenue split in favor of streamers, in my opinion, would greatly benefit Twitch. [...] This would greatly improve the motivation for people to start streaming long-term and grow their platforms more, thus raking in more money for themselves and the platform.”

Twitch does indeed offer some creators a 70 / 30 subscription revenue split. But, according to the blog explaining the news from Twitch president Dan Clancy, it was wildly inconsistent how and to whom that 70 / 30 split was offered. 

“As we reflected on how we handled these premium deals, we realized a few problems. First, we had not been transparent about the existence of such deals. Second, we were not consistent in qualification criteria, and they generally went to larger streamers. Finally, we don’t believe it’s right for those on standard contracts to have varied revenue shares based on the size of the streamer.”

Twitch said that it would honor the 70 / 30 split for those creators for up to the first $100,000; then, any money made beyond that would see a reduced 50 / 50 split. It signals to streamers who don’t have that kind of deal that, for the foreseeable future, they have no hope of earning more money via subscriptions.

And it went over like the most lead-laden balloon.

“WE are the ones earning you money!” wrote karterstrophic on UserVoice after the news was announced. “WE are the ones that make content! PAY US FAIRLY!”

“WE are the ones that make content! PAY US FAIRLY!”

“This is a massive slap in the face for everyone who uses Twitch to stream,” wrote GayBrownies. “We creators are keeping your platform alive and with the way it’s going, it’ll just be Mixer 2.0 and we all know how that ended.”

Even for streamers who ostensibly make enough money to comfortably absorb the change, the news is still concerning.

“A lot of content hinges a little bit upon collaboration,” Justin Miclat, CEO of The Kinetic Group, a talent management firm that specializes in Twitch streamers, said in an interview with The Verge. “So by creating a more difficult barrier to entry for sustainable careers for others makes everyone’s lives harder.”

Twitch president Dan Clancy offered insight into the company’s reasoning for the change, but everything from that explanation to the way the announcement was handled served to only rankle the community further. For starters, Twitch posted the announcement at 5:57AM Eastern, well before the time many creators, especially those based on the West Coast, would be awake.

“I did wake up to a really healthy inbox and texts and missed calls from creators,” Miclat said. “A 3AM-type PR statement already signals it to creators, ‘Hey, this is something that they’re trying to sneak something by us clearly, right?’”

Poor timing aside, the rationale behind this move similarly didn’t inspire understanding. Clancy spoke about the costs associated with keeping Twitch running, stating that it costs around $1,000 dollars a month to host high-volume streamers.

Creators took issue with how Clancy came up with that $1,000 a month figure, since he suggested that Twitch, a subsidiary of Amazon, pays Amazon’s AWS hosting service the same price everybody else has to pay. “Hey so uh, not sure if this is news to you, but you do realize you’re an Amazon company right?” wrote Oceanity on UserVoice. “You do realize that Amazon companies aren’t paying what an average consumer is for AWS stuff yeah?”

Others were actually understanding of the costs associated with running Twitch and the need for balance between creator support and generating revenue.

“I’m not here to say running servers is cheap,” wrote Hintetsomaru on UserVoice. “If you can’t give us a better pay split (heavens knows you make enough off our hard work), you could at least make it easier for us to run ads, without inconveniencing our viewers, who are the ones who pay us.”

But perhaps one of the more upsetting statements Clancy made came at the beginning of his explanation for the changes. 

“When we first established a 50/50 revenue share split, it was to signal that we’re in this together,” wrote Clancy. “You all do the amazing work you do to create great content, engage with your audience, and grow communities.”

Observers found this kind of “we’re a family” sentiment a little absurd. Twitch is owned by a trillon dollar company, but its streamers, who invest so much time and effort into making content, can’t even break minimum wage in earnings

“With a line like this you’d think we’re besties or that we’d be getting more of a split but nope, I’ll still get just 50% of what I earn on Twitch,” tweeted Yunitex, an Irish streamer.

“Twitch makes a lot of money in different ways so I don’t really buy that this is something to ‘help all around,’” said Brandon Stennis, a Twitch partner, in an email to The Verge. “As someone who has worked for streaming companies, worked with streaming server hosting, I don’t really believe Twitch is hurting so bad that this is a way to help everyone.”

But despite the lack of support, Miclat and others agree that the way forward isn’t to abandon Twitch. Not yet, anyway.

“I’ve used the analogy many times that to younger audiences, Twitch is their television,” Morrison said. “And just because their favorite creator might get banned or leave or go somewhere else, their audience doesn’t necessarily migrate with them. In fact, they typically don’t.”

Part of what’s feeding this seething discontent among streamers is that currently, there is no other recourse. While Twitch isn’t the only streaming game in town, the sentiment is it’s the best. YouTube, Facebook, and increasingly TikTok are gunning for a portion of Twitch’s market share, but they’re just not quite there yet. As long as eyeballs are focused on Twitch, its creators are handcuffed to a platform that can act with impunity.

“Those other platforms don’t have very good discoverability,” Morrison said. “So for younger, up-and-coming streamers, it’s much easier to get found on Twitter or Twitch than it is on these other platforms, infinitely easier even.”

Though Morrison isn’t suggesting creators abandon Twitch en masse, the platform that was once the sure bet for his creators’ success now comes with deep reservations.

“The conversation I used to have with my creators about ‘Let’s stick it out, here let’s make this work with Twitch’ is now going to be very different going forward,” he said.

This culture shift away from the heydays of being a creator-first platform seemingly begins at the top.

“I think that they’re allowing the wrong motivators to affect their decisions,” Morrison told The Verge. “I think that they have maybe the wrong people making some of these decisions outside of the Twitch ecosystem and coming from Amazon or wherever else.”

“Twitch is their television”

Last week, Bloomberg reported that Twitch’s senior vice president of global talent resigned — the latest of several high-ranking departures this year. According to the report, the executives who are left, Dan Clancy primary among them, see Twitch as little more than numbers on a spreadsheet.

“[Clancy] is this embodiment of ‘Creator sentiment is secondary to everything.’ There’s no leader to push back against that, so it’s now the direction of Twitch,” Zachary Diaz, Twitch’s former director of emerging content, told Bloomberg.

Doritos Bowl At TwitchCon 2018
Photo by Robert Reiners/Getty Images

So if YouTube isn’t the move, what is? Some think it could be organization. Earlier this week, Twitch issued a statement saying it would ban certain forms of gambling streams almost immediately after big-name streamers seemingly threatened a boycott. It could very well be that decision was already in the works. But even earlier than that, like last year when hundreds of streamers took a day off Twitch to protest hate raids, the platform saw a quantifiable dip in viewership. Collective action has seemingly worked before.

As content creators figure out the next steps, a lot of them are disillusioned. 

“The soul of the community that was Twitch is mostly gone,” Stennis said. “A lot of us are pretty much on our own to figure out how to maneuver our careers and space.”

Twitch built itself to the juggernaut that it is by being creator-first, and it doesn’t seem like that’s the case anymore. Streamers feel that the platform that was once so focused on its primary asset — creators — has now been replaced with something overwhelmingly concerned with ad buys and extracting capital. 

“It’s honestly just offensive at this point,” Morrison, a 10-year veteran in the industry, said. “I think it’s showing that this is no longer Twitch. This is just an Amazon streaming service that doesn’t care about the individuals on it.”

The creator-focused Twitch of old has long been gone, but with this news, it seemingly signaled to its users that it’s not coming back.