Twitch’s new revenue sharing is a bet against streaming superstars 

Twitch had one of the most exciting weeks in its history, with scamming drama and a ban against gambling streams. But perhaps the most important move in the midst of Twitch’s headlining news was all about monetization. Friday was monetization day. Twitch president Dan Clancy announced that the platform is changing its current revenue splitting model for the platform’s biggest streamers, cutting the portion a streamer gets from 70% down to an even 50/50 split — the same one the platform’s other creators are offered.

All sizes of streamers were unhappy with this decision. For a more detailed look at Why? streamers aren’t happy with Twitch’s new plan, you can read a breakdown from Ash Parrish at The Verge. But beyond streamer dissatisfaction, it’s worth digging into why Twitch made this decision — and what it could signal about the platform’s future.

The short version of Twitch creators’ complaints is that they already felt that the 50/50 split that most streamers were offered was too low, especially considering that competitors like YouTube (Twitch’s biggest competition, at least until TikTok livestreaming grows) are offering everyone the 70/30 deal. Twitch lowering the earning ceiling has dashed smaller creators’ hopes of getting a raise anytime in the near future.

Twitch has essentially challenged the most prominent stars of Twitch to go to YouTube. They just found out that they might be missing thousands of dollars per month. While this may sound risky for the platform, it seems clear that Twitch doesn’t believe it actually needs superstar streamers. This company believes its customers are loyal enough so it will create more stars than pay a premium for the ones it currently has.

It isn’t an unreasonable bet to make. Twitch is currently the most popular platform for livestreaming. Twitch currently has the largest audience, with over 500,000 people watching it every day. Some streamers, like Valkyrae, have already proven that a move to YouTube can be highly successful, but for many others, they often see a drop in viewership because their entire Twitch audience won’t migrate to their new platform — something that streamers learned during Twitch’s first big exodus with personalities like Shroud and Ninja signing deals with Microsoft’s now-shuttered Mixer platform.

Even more significant, for streamers with smaller streams, Twitch is by far the most effective platform for finding new streamers. YouTube’s discoverability is poor. YouTube’s Live hub can be difficult to locate. The homepage prioritizes your algorithm above categories. This means viewers have to go through many hoops in order to discover unknown streams to view.

This issue creates a feedback loop where YouTube is forced to partner with big streamers who can bring in an established audience in order to get viewers, but those viewers are only fans of that creator, and because discovering someone new is hard, increased viewers for one streamer won’t necessarily lead to growth for other smaller streamers.

Twitch has another secret weapon in the streaming platform war: Twitch Prime, a “free” benefit of an Amazon Prime membership that allows the user one Twitch subscription a month without paying anything.

Although Twitch uses this part to justify their 50/50 split of Twitch, the true benefits of Prime are undisputed. Prime can be used to give streamers extra subscriptions and not ask them to spend any cash. It’s also a way to monetize a large portion of Twitch’s audience — children — who might be using their parents’ Amazon account. While they may not have the funds to pay a monthly subscription with a creditcard, Prime allows them to still stream their favorite streamser.

This has given Twitch an enormous advantage against the streaming platform competitors, one it keeps despite losing top talent to YouTube. While Twitch superstars like Pokimane and Hasan still wield immense power (which they proved by banding together to get gambling banned from the platform last week), Twitch’s new policy makes it clear who’s actually pulling the strings. Importantly, Twitch doesn’t lose creators like xQc and Hasan. Code Miko, Twitch’s thousands and thousands of smaller streamers making the leap to a competitor is difficult to imagine right now. At the moment, it’s the only streaming site with the right tools to help them become stars.