Twitch is considering a pay cut for its top creators to boost its bottom line. Here’s what we know.
According to insiders who spoke to Bloomberg on the condition of anonymity, the move would see creators’ pay cut from 70% down to 50%. Other updates under consideration would offer streamers more incentive to run ads for viewers. The changes could be implemented to Twitch’s monetization structure as soon as this summer.
Twitch is considering dropping from a 70/30 split in favor of the creator to an even 50/50 split. Another option is to create multiple payout tiers with creators needing to reach certain milestones to achieve a higher payout. In exchange for these changes to the platform, Twitch may offer to release partners from its exclusivity restrictions.
Twitch hasn’t publicly commented on the potential updates. Bloomberg notes the proposed pay cuts may be abandoned at any time.
Viewership of video games has exploded after the pandemic. Twitch still leads the market, but Amazon wants the site to be profitable for its bottom line. Many long-time creators have been unhappy with Twitch’s focus on profitability and they’re leaving the platform in favor of other live streaming services like YouTube and TikTok.
According to the service TwitchTracker, there are more than 51,500 people in the Twitch Partner Program.
Twitch has increased its focus on getting channel creators to run ads in recent months. Creators who stream at least 40 hours a month can now get paid $100 per two minutes of ads per hour. The payout increases the more ad minutes are run by streamers.
These Twitch pay cuts are a hard slap in the face for creators who often don’t make much from the platform in the first place. We know this because of the Twitch hack last year that revealed all of the payouts for the top streamers on the platform in 2019. Once you scroll past the top 10,000 highest paid streamers, the profit starts falling off fast. In fact, 25% of the highest-paid streamers on Twitch don’t make the equivalent of minimum wage based on their leaked payouts.
There are around 9 million streamers on Twitch, so 10,000 is just 0.1% of the platform. Those numbers resemble multi-level marketing schemes where only the top earners (those with the most viewers) are successful, while everyone else languishes by paying in more than they generate. At least streaming on Twitch is free if you don’t count the time spent setting it up, right?