Twitch's Exclusivity and Subscription Revenue Game Changer

When wellness brand Liquid I.V. flowed into the gaming category with creator sponsorships on Twitch, it was entering uncharted territory in its 10-year brand history. Liquid I.V. felt its brand was endemic to gaming and saw Twitch as a massive opportunity to reach games through livestreaming, as the Amazon-owned platform averaged 2.78 million concurrent viewers in 2021, a 31% increase year over year, according to Twitchtracker. "The pandemic certainly triggered a huge boom in gaming from both a playing and viewing perspective," Liquid I.V. brand director Brittany Shaw told Adweek. "People really were looking for ways to not only distract themselves but also as a way to connect with others during a time where there were a lot of social limitations." Previously, Twitch didn't allow streamers to broadcast livestreams on competitor platforms such as YouTube or Facebook Live, nor simulcast on TikTok or Instagram. Now those restrictions are gone: In August, the platform dropped its exclusivity clause for partners. While Twitch has significant appeal, its recent moves to alter its exclusivity agreement and reduce subscription revenues for premium-level streamers (see sidebar) have complicated marketers' efforts to work with gamers. Twitch can offer lower subscription revenues to streamers at this point because it has wider visibility in the livestreaming space compared to its competitors. But while it is expected to continue to dominate livestream, its competitors offer better revenue sharing options. These decisions have an impact on streamers, the brands and marketers that sponsor them, and the platforms looking to make up ground in the livestreaming category. "The removal of the clause on Twitch has the potential to create more ROI for influencer marketing programs," Digital Surgeons chief experience officer Joe Pilcavage said, adding that brands can piggyback on content creators' attempts to test new communities, diversify their revenue and drive new engagement. The battle for the livestreaming crown Twitch has long dominated the livestream space, but it faces competition from emerging platforms such as YouTube Gaming, Meta and TikTok. Brands like Liquid I.V. are looking to attract more eyeballs, and the ability for a streamer to broadcast on several different platforms only increases those chances. Brands that power a lot of creators through sponsorships and other activations are seeking both reach and frequency, which can bring in a larger audience and lead to increased revenue, said Gil Hirsch, CEO of cloud-based streaming tool StreamElements. YouTube offers creators 70% of all fan-related revenue including memberships and superchats. Meta pledged last year to let streamers keep all their revenue until 2023 and recently extended that promise by a year. TikTok has seen its livestreaming revenue grow by 900% over the past two years, though it doesn't yet have a revenue split model for its livestreaming subscription service. According to StreamElements, Twitch had 1.8 billion livestream hours viewed of gaming content in September 2022. YouTube followed with 434 million hours viewed, with Facebook Gaming in third at 328 million hours. Carson Chiu, media supervisor at GSD&M, expects established streamers to stay on Twitch because their audience is familiar and comfortable with the platform, and asking audiences to switch platforms isn't usually met with enthusiasm. Future-proofing Going Halfsies Several weeks after the exclusivity announcement, Twitch revealed it was reducing subscription revenues for streamers starting in June 2023. Most Twitch streamers have a 50/50 revenue split agreement with Twitch currently, while a select number of streamers with significant followings have premium subscription terms that include a 70/30 revenue share. After the rule goes into effect, that select group of premium streamers will have a 70/30 revenue share split for the first $100,000 earned through subscription revenue. After the threshold is passed, the revenue will be split at the standard 50/50 share. After its exclusivity and subscription revenue announcements, Twitch has been working to put plans in place to keep disgruntled streamers—and their brand partners—engaged. Because brands flock toward larger streamers with premium audiences, Twitch said the number of affected streamers is in the hundreds of its 8 million-plus user base. Despite how few streamers it will impact, the decision was lambasted by the streamer community. Twitch began beta testing a new experience for its stream display ads called "rewarded purchase," allowing viewers with codes to redeem monthly channel subscriptions for their favorite Twitch streamers after making a purchase from a display ad on the platform. Despite Twitch's efforts, Mekanism partner and chief social officer Brendan Gahan sees streamers building out their own communities through several mediums, including Discord, email and SMS lists. "Creators are building on rented land," Gahan said. "Time and time again, creators build a platform and then the platform changes. They are left feeling like they've invested all this time, money, resources, and suddenly the rug is pulled out from under them. Creators are recognizing this pattern."

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As Twitch Changes Revenue and Exclusivity Rules, New Opportunities Abound

Possibilities are popping up for streamers, marketers and platforms alike

Rafael Canton

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Rafael Canton