Twitch is now the most popular service for broadcasting video games available on the internet; yet, the company may have difficulty retaining its most popular broadcasters.
On Wednesday, the company announced that it would reduce the percentage of subscription revenue that it shared with some of the largest streamers on its service. Specifically, in certain circumstances, the company will reduce the percentage of revenue that it shares with these streamers from 70 percent to 50 percent.
Twitch had already abolished its own exclusivity agreement, which had banned high-revenue broadcasters from broadcasting on other sites. However, the company has since lost some prominent streamers who have signed exclusive arrangements with YouTube.
Eight years after Amazon acquired it, the company is still working hard to find the right balance between the enormous cost of streaming video across the internet and the significance of the big personalities who bring the most eyeballs — and, consequently, the most revenue — to the service. This has been a challenge for the company. On Twitch, the equivalent of movie stars is the major draw for viewers: well-known content providers.
While it is in the process of implementing its new revenue-sharing arrangement, the firm is also facing issues and concerns over the presence of gambling on its service. These concerns include demonstrations by certain streamers against channels that encourage gambling. The firm made the announcement on Tuesday that it would block the streaming of gambling websites that contained slot machines, roulette, or dice games that were not permitted in the US and some other regions.
According to statistics provided by StreamLabs, a streaming software business, users of the site watched a total of 5.64 billion hours of broadcasts on Twitch during the months of April, May, and June. The service has 9.6 million different channels. The total amount of time spent on YouTube Gaming, the second most popular service on the internet, reached 1.13 billion hours.
But YouTube, which is owned by Google, is making an effort to attract a broader audience. Over the course of the last year, they have secured exclusive contracts with three of the most prominent broadcasters on Twitch.
Twitch made the announcement one month after two of them had departed the company that it would relax its exclusivity rule. Now, the firm has decided to cut down on what it refers to as “premium arrangements.” These are agreements that provide prominent streamers a bigger share of subscription income than ordinary users on the site.
These premium partners will now take home a 70 percent share of the profits. The president of Twitch, Dan Clancy, said in a blog post that was published on Wednesday that they would continue to get this share on the first $100,000 generated over a period of 12 months, but that beyond that amount, they would only receive 50 percent.
The same fifty percent cut goes to each and every other streamer on the site. Twitch made the decision more than a year ago to cease selling premium packages, and the company is now striving to make the ones that are already in place with regularly with the remaining business.
The new policy won’t be implemented until June 1st, and customers with premium packages won’t notice a change in their discount until their current agreements are up for renewal.
Twitch said that at least some of the decision to make the shift was motivated by the high expense of broadcasting video via its cloud service provider, which is its parent firm, Amazon.
Ms. Siragusa, a famous streamer on Twitch, said that she had previously explored the possibility of broadcasting with other firms, and that the recent changes to Twitch’s conditions regarding income sharing may bring her even closer to making a shift.
Mr. Clancy, the president of Twitch, stated in a blog post that popular streamers may be able to recoup any lost revenue through the company’s advertising service. He pointed out that a new programme gives streamers a 55 percent cut of advertising revenue brought in by their channels. Mr. Clancy’s comments were made in reference to the fact that streamers may recoup any lost revenue through the company’s advertising service. On the other hand, Ms. Siragusa said that this was a lot less appealing in comparison to bringing in money via subscriptions.
