Twitch’s switch from a 70/30 revenue split to 50/50 brought a large wave of criticism from viewers and streamers. For many, the change to a 50/50 revenue split seemed like a step back for the company. Not only has YouTube consistently used a 70/30 model, but since Amazon owns Twitch, it was thought that the company shouldn’t have problems staying with it. According to Twitch’s Vice President of Monetization Mike Minton, the situation is more complicated than it initially seems.
“…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.” said Minton. “But the part that’s often lost in this conversation is that Amazon is investing and providing a ton of resources to the community via the Prime subscription.”
According to the article, there were 41 million Prime subs in 2021 alone. Due to Twitch’s coverage of half the cost of a prime subscription, it’s more than likely that the company suffered a loss in revenue. Due to that and maintaining the high video quality of Twitch live streams, the 50/50 revenue split was a needed decision. However, Minton restated that advertising would be one of the crucial avenues that streamers could take to make up the revenue loss.
With Twitch’s recent change in revenue share for advertising to a streamer favorable 55/45 Minton stated that some streamers have already seen a 20-25% increase in paychecks.
However, he recognizes that smaller streamers wouldn’t see the same benefits as their larger counterparts. Having streamers become more reliant on advertising has hurt the viewer experience. Video ads can drive away viewers from streamers for the wait alone, impacting the growth of smaller streamers. Along with removing pre-roll ads, Minton stated that Twitch would invest in the development of display ads underneath streams. This would prevent viewers from missing out on moments on streams.
Although the interview was an excellent opportunity for Twitch to clear the air, it does little at present to calm down the animosity towards Twitch at the moment, especially in the wake of TwitchCon 2022’s fallout.