Back in February, 2021 I wrote my first article titled The Platform Problem where I outlined some of the especially concerning aspects of the creator economy. Particularly worrying was the way that large content hosting platforms such as Twitch and YouTube hold total control over a creator’s viewership, revenue, and account status — so essentially their entire livelihoods.
Well, unsurprisingly Twitch has done exactly what we had warned about over a year prior. In their latest release, A Letter from Twitch President Dan Clancy on Subscription Revenue Shares, Twitch has announced that they will be cutting all partner subscription revenue shares from 70/30 (favouring the creator) to an atrocious 50/50 split. It begs the question: is Twitch doing half the work for each creator ?
For the uninitiated, subscription revenue makes up the vast majority of a creator’s income on Twitch. This means that in many cases, creators are losing up to 20% of their total revenue over night. Now there are a few caveats, here’s what Twitch sent to their “partnered” creators:
We will continue to offer you 70% of subscription revenue share for all subscription Tiers up to a maximum subscription revenue of $100K USD annually.
For subscription revenue in excess of $100K USD, your sub revenue share rate will default to the standard Partner rate of 50% for Tier 1 subscriptions, 60% for Tier 2, and 70% for Tier 3 for the remainder of the 12-month period.
The $100K USD threshold will be calculated over a 12-month period starting from your annual agreement renewal date. The $100K USD threshold will reset on the first day of the subsequent 12-month period, and each 12-month period thereafter.
Once we implement this change, progress towards the $100K USD threshold will be trackable on your creator dashboard.
The subscription revenue threshold of $100K USD applies to all subscription earnings, including Prime subscriptions, and will not impact any other revenue shared with you (advertising, Bits, etc.)
Other than this slight reprieve, it’s back to 50/50 for basically everyone. For those who think the 100k threshold is generous, keep in mind that many of the top Twitch partners have a team of staff and are running what is akin to a small company. Imagine a small business owner, with salaries and expenses to pay, being told their revenue will be permanently stunted by 20% over a cold, lifeless email.
Let’s discuss some of the arguments Dan Clancy makes, starting with his faulty appeal to tradition:
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.
A partnership, a good ol’ 50/50 split, doesn’t that sound nice? Well, I’m not aware of many partnerships where one partner can tell the other how much income they’re losing with the snap of a finger. This is the hard truth about corporations: they only care about their shareholders. Unless Twitch creators start purchasing Amazon stock, they will forever be at the mercy of Twitch’s leadership. This conveniently leads into the next weak attempt at a justification:
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.
Considering Twitch is owned by Amazon, the cloud computing giant from which AWS gets its namesake, should they not have a complete advantage to mitigate these costs? For those thinking YouTube is more down to earth, keep in mind that they are owned by Google which runs GCP, an almost equally large cloud computing juggernaut. With the argument that costs have increased due to higher viewership, there should come an understanding that there is also much more subscription and ad revenue. If anything, economies of scale mixed with the fact that AWS and GCP are standing behind these platforms, should dictate even lower fees for creators.
Lastly, I will pick apart the third argument which is an almost comical display of circular logic if I have ever seen one.
When someone asks me why Twitch is the best place to make money as a streamer, my answer starts first and foremost with community. Community on Twitch is real and tangible, from chat memes to subscriber emotes to TwitchCon meetups, and yes — to how streamers earn money.
Dan is claiming that Twitch is the best place for creators to earn a living because of “Community”. So creators should feel they owe Twitch more of their income for letting them access the Twitch community, the community that the creators and audiences built themselves. This argument is not only insulting, it shows how callous Twitch is in their attempt to take credit for audience made content. I have to say no Dan, making a sticker of a creator’s face or repackaging community made memes is not akin to building a community, the community was already built, you’re just capitalizing on it.
Well, What Now?
As I pointed out over a year ago, creators should NOT have majority of their compensation tied to social media platforms. It’s already bad enough that platforms can ban accounts over baseless copyright strikes or remove ad revenue. Hell, I’ll even go as far as to say that ad striking a creator isn’t as heinous since it’s the advertisers who have a right to decide where their ads end up; but subscriptions!? An audience member only ever subscribes to a creator when they want to directly support them. They offer part of their monthly income to bolster the income of a creator they appreciate. It’s a selfless act, let’s not pretend they’re paying for the ten or so emotes.
This is a glaring example of how creators and audiences will always come second to shareholders on these large platforms. I am not advocating for creators to stop using these platforms or direct any malice towards them, I’m simply pointing out the obvious: these platforms are not meant to be used as monetization tools — or at least not reliable enough ones to build a stable business. This is the precise reason we endeavoured to start Vodra and what has fuelled us this last year to create a solution for creators of all sizes.
With a major platform release just around the corner, we warmly welcome all creators who are feeling disfranchised, frustrated, or just plain curious about a new solution. We are covering all facets of creator compensation and work hand-in-hand with creators to create solutions specifically tailored to their needs. We’re also avid Twitch and YouTube watchers ourselves, so we know exactly what audiences love too!
Feel free to reach out personally with your concerns as I love hearing from all creators, big or small — conner@vodra.io — alternatively, check out our Twitter where we regularly post about the most impactful issues facing creators today.
— Conner Romanov
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