Why Amazon won't give Twitch streamers a 70/30 pay split – The Washington Post - eComEmpireStore + Brought to You By: Robert Villapane Ramos

Why Amazon won't give Twitch streamers a 70/30 pay split – The Washington Post

Sign inTypically the big, pandemic-delayed return of Twitch’s annual TwitchCon gathering in San Diego would be cause for celebration. But this year, attendees streamed into — and broadcast out of — the gargantuan convention center with a mix of excitement and trepidation.Mere weeks before, Twitch announced that it was doing away with a 70/30 revenue […]

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Typically the big, pandemic-delayed return of Twitch’s annual TwitchCon gathering in San Diego would be cause for celebration. But this year, attendees streamed into — and broadcast out of — the gargantuan convention center with a mix of excitement and trepidation.
Mere weeks before, Twitch announced that it was doing away with a 70/30 revenue split option it offered to top tier streamers, punting even those with special premium contracts down to 50/50 (after the first $100,000 earned through paid subscriptions). Outrage followed; despite Twitch’s assertion that the “vast majority” of streamers were already on standard 50/50 deals, many felt that Twitch had eliminated more than just a rare contract type, but an aspirational goal. On a platform where it can feel like broadcasters are constantly kicking to keep their heads — and subscriber counts — above water, the idea of a better contract at least functioned as a north star, something to keep them going.
In an interview with The Washington Post at TwitchCon, Twitch’s Chief Monetization Officer Mike Minton acknowledged the larger connotations of what the company has taken away.
“It’s really not as much about the change for current streamers,” said Minton. “It’s more about the other streamers that now feel like they have a loss of something they can no longer attain. That leads to the question of, why not just give 70/30 to everybody, right? We absolutely looked at all options to do that. What it comes down to is, those options were not viable for us as a long-term business.”
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Twitch is owned by Amazon — a trillion-dollar company — yet it’s taking money out of the pockets of creators to cover the cost of running its servers. (Amazon’s founder, Jeff Bezos, owns The Washington Post.) Why, popular streamers have asked, can’t Amazon simply foot the bill for a 70/30 split — something both YouTube (which is owned by Google) and Facebook already do to varying degrees?
Minton sees where they’re coming from, but it’s not quite that simple in his view.
“[It’s] like, ‘You’re part of Amazon. Of course you should be able to pay 70 percent,’ ” said Minton. “The reality is, as an Amazon-owned company, we have the same expectation as the rest of the Amazon ecosystem: we’re a sustainable, viable long-term business. But the part that’s often lost in this conversation is that Amazon is investing and providing a ton of resources to the [Twitch] community via the Prime subscription.”
A Prime sub, as it’s colloquially known, is the free monthly subscription to one Twitch channel of a user’s choosing given out with all Amazon Prime subscriptions. Amazon pays streamers as though these are standard $5 subscriptions made directly, meaning that streamers receive $2.50 per subscription, despite viewers not actually spending $5. In 2021 there were 41 million Prime subs in use across the platform, which likely cost Amazon a pretty penny. That said, it also bears noting that Prime subs are a powerful promotional tool for Amazon Prime, which increasingly looks to be a linchpin in Amazon’s entire product ecosystem. Even as it spends, it benefits.
Minton understands Twitch streamers’ frustration, but believes the platform’s other offerings balance it out.
“I get it,” he said. “We can’t share all the details [of the cost of running Twitch] in a way that the community 100 percent trusts us. Providing high-definition, low latency video around the globe is expensive. … But you take that and all the teams investing in improving streamers’ engagement with the community, tools to grow, safety and of course what we’re doing on the monetization side — that’s why 50/50 is the standard agreement.”
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Minton reiterated the larger Twitch refrain of the past year: Ads, for better or worse, are the way forward.
“I think we are very focused on growing the pie and making sure that streamers make more money, because if streamers make more money, we make more money,” he said. “Advertising is a big part of it.”
Earlier this year, Twitch also changed its revenue share on advertising — or at least, on ad revenue earned through its new ad incentive program, which comes with its own complications. The split now stands at 55/45 in favor of streamers, which Minton said has in some cases led to a “20-25 percent increase” in total paychecks for streamers. However, he acknowledge that ads don’t make as much sense for smaller streamers from a monetary or discovery perspective as they do for more established creators.
That in mind, Minton’s current goal is to eliminate ads that appear when viewers first arrive at a channel, which can dissuade them from sticking around to give new streamers a chance.
“Nobody wants a pre-roll ad when you’re trying to find a new streamer,” Minton said. “So removing ads out of the discovery experience has to be done in order to help more people find the streamers they want to find — and especially [for] the smaller streamers to not feel like they’re penalized by pre-rolls.”
Minton and company are also focusing on display ads — which quietly appear beneath Twitch streams instead of interrupting them — as a way to make ads a more appealing proposition on a live platform where one missed moment might make all the difference.
“In terms of streamer opportunity, we really want to grow display ads faster than video ads,” he said.
Over the past handful of months, numerous ex-Twitch employees have told The Washington Post that Twitch actually stopped offering premium 70/30 contracts to streamers back in 2021. Minton explained that Twitch waited until this year to announce the change because some streamers were already on premium contracts (Twitch contracts often last two years), and the company wanted to give creators a chance to engage and ask questions at TwitchCon.
“We definitely wanted to make sure that we got our message out ahead of TwitchCon so that we could have the conversation with the community here, in the right forum,” he said. “[We wanted to] make sure we timed it at a point where we could continue the conversation interactively.”
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Despite the words of Minton and other Twitch execs, it does not seem like Twitch streamers feel optimistic about their prospects. At TwitchCon, attendees seemed excited about everything except Twitch. Panels and meet and greets featuring popular streamers put conference rooms at — and sometimes over — capacity. Streamers enthusiastically greeted each other and partied together in person after years of video game sessions and Discord calls from afar.
But TwitchCon’s central theater was sparsely populated when it came time for the centerpiece of the conversation around streamer pay, a Sunday “Patch Notes” Q&A session with Twitch execs focused on rev split and other recent developments. The tone of TwitchCon as a whole was not one of disinterest in these topics, but rather resignation. After weeks of pleading online, it seemed like streamers had given up on changing Twitch’s mind.
Anger, however, still boiled beneath the surface. On Sunday, word got out that popular streamer and adult entertainer Adriana Chechik had broken her back after jumping into a foam pit on the TwitchCon show floor. Despite the fact that the pit was part of a booth by Lenovo, Intel and a creative agency called Kairos Media, many nonetheless blamed Twitch for lax safety standards. The day after the convention ended, the hashtag #boycotttwitch trended on Twitter, with many citing rev split and TwitchCon safety as justifications.
Streamers, in other words, are not exactly feeling charitable toward Twitch right now. On the money side of things, at least, Minton believes that time will smooth out the bumpy road the company finds itself on.
“We made a decision in the long-term interests of Twitch to ensure that we’re here to support the streamers that are streaming today,” he said, “and continue to earn money for the streamers in the next generation.”
An earlier version of this story incorrectly cited Twitch saying that 90 percent of streamers were already on standard 50/50 deals. Twitch had stated that a “vast majority” of streamers were already on that deal.