Twitch puts an end to 70/30 for Partner Streamers
It's now official. The rumour had been circulating since the beginning of the year, but Twitch finally announced on his blog dedicated to streamers the end of 70/30 for Twitch Partners who were benefiting from it. The firm explains its choice in a long message to the community and also takes measures to cushion the losses of the streamers concerned.
What is the 70/30 on Twitch?
Before explaining the 70/30, we must first talk about the different types of streamers on the platform. On Twitch, there are three different streamer statuses. Smaller streamers and those just starting out have no contract, but are free to stream content in the same way as others. If they reach certain audience targets and stream regularly, they can become Affiliates and start earning money by streaming on Twitch. An affiliate streamer who reaches much higher goals can apply to become a Partner and receive greater benefits on the platform in exchange for a more robust contract.
For the vast majority of streamers, Twitch applies the 50/50. That is to say that Twitch gives back to the streamers 50% of the profits that the platform managed to make thanks to subscriptions. But for some historical, iconic or simply particularly followed streamers, Twitch proposed 70/30 contracts. These chosen few then earn 70% from the subscription profits, while Twitch only takes 30%.
There are no rules that determine when a streamer can expect to go 70/30 and this type of partnership has never really been mentioned publicly by Twitch. It's simply a piece of information that is known within the community and that streamers naturally hear about by talking to each other. For many, being able to claim 70/30 is a concrete objective.
How will this change take place?
Twitch is well aware of the net loss of revenue this may imply for the streamers concerned and mentions the fact that most of them have "accustomed to certain standards of living". That is why, rather than cutting off the valves overnight, there will be a transition period.
From 1 June 2023The streamers concerned will continue to benefit from the 70/30 until the next renewal of their contract. From that date onwards, their contract will be modified to add a clause. In this new contract, the streamers concerned will still benefit from the 70/30 on the first 100,000 dollars of profits they make in the year. Once this amount is reached, any additional income will be shared 50/50.
These changes will only apply to the profits generated by T1 subs and Prime Gaming subs, as T2 and T3 subs will still return 60% and 70% of their amount to streamers respectively.
Why the end of 70/30?
Twitch mentions several reasons for the end of this preferential program.
The first is the desire to put all streamers on the same level as the others. an equal footing. A part of the Twitch community also demanded a better equity, but claimed a 70/30 right for all.
The second, and more important, is the cost of maintaining a high-definition, latency-free streaming platform that is available worldwide at all times. Twitch estimates that a streamer with 100 consistent viewers over 200 hours of streaming costs 1000$ to the platformIn terms of bandwidth alone. In this context, putting all streamers in 70/30 is not realistic.
It must be said that beyond its popularity, the question of Twitch's concrete profitability has always been a matter of debate. It was clearly loss-making at the time of its takeover by Amazon in 2014 and since then it has become much more difficult to measure its concrete profits. Most Twitch employees and ex-employees agree, however, that the platform loses more money than it makes, mostly because of its headliners, whose sub numbers do not at all offset the cost of keeping their channels online.
A well-considered decision
As evidenced by the date of the first rumours on this subject, but also and above all by the fact that the platform had not offered 70/30 for over a year, the decision seems to have been taken for quite some time. It is likely that Twitch was looking for a way to negotiate this change without offending its best players.
For some time now, Twitch has been pushing to change the business model for streamers by putting a greater emphasis on advertising. This started with the end of ad-free broadcasts for Prime Gaming subscribers. The platform then introduced a special advertising programme that guaranteed a fixed revenue stream as long as content creators committed to running a certain number of ads per month. The Offer Board, which makes it very easy to negotiate special deals, has also become a much more important part of the delivery tools. More recently, Twitch ended the exclusivity clause that prevented Partners from broadcasting their content on other platforms simultaneously.
As for the timing of the announcement, the current economic climate also seems to be a better time to make this shift, as within two years most of the competitors who wanted a piece of the pie have fallen by the wayside. Mixer, Facebook Gaming and to some extent YouTube Gaming are all history.
What impact on content creators in France?
It is extremely difficult to measure the impact that such a decision will have on Twitch's headliners. This change is global, but is likely to affect each country and even each streamer involved differently.
The problem is that in France, this represents a new blow for the most famous creators. While the 100.000$ safety net should keep most of the big French streamers off the platform for a short period of time, things could become more complex once this temporary offer expires.
As we said earlier, Twitch mentions "living standardsThis is not the case with the "premium" creators, but it completely ignores the most important aspect. Most of these big streamers are entrepreneurs who hire several people to manage the content they create as well as their social networks and partnerships. A drop in income can lead to big complications.
Advertising revenues, which Twitch claims should largely compensate for this loss, are well less generous in France than in the US. Last year, Twitch also decided to reduce the price of subs in France, in the hope of making the offer more attractive. The actual impact of this decision on the number of subs and the expected increase in monthly revenues is quite disputed among content creators, with many seeing only a negligible increase in subscribers.
Affected streamers therefore have about a year to review their business model and find a new balance if they want to maintain their revenues.