Twitch is making big changes to monetization again in an attempt to create a more sustainable system, reducing earnings in some places and increasing them in others. This new batch of changes includes expanding its Partner Plus program and changing how its comprehensive Twitch Prime Gaming subscription pays creators.
In a blog postCEO Dan Clancy outlined three major changes coming to the way streamers make money from Twitch.
First, Twitch is removing the $100,000 cap on its 70/30 income split for the platform's highest-earning creators. Last year, Twitch implemented a plan where top-earning streamers would see their subscription income beyond $100,000 reduced from 70/30 to 50/50.
“We are removing the $100,000 net revenue cap on the 70/30 revenue share tier for all streamers, including those in the Partner Plus program, effective immediately,” the blog post reads.
Clancy wrote that the limit “served as a disincentive.” Having a program that penalizes those who earn the most seems bad for business, especially as Twitch's biggest streamers (and therefore its biggest assets) are increasingly looking beyond the platform to earn a living or are attracted by huge contracts from the competition.
The next big change is coming to Twitch's Partner Plus program. As it exists now, partners who manage 350 paid subscriptions for three months in a row are eligible for a 70/30 revenue split for the next 12 months, even if they fall below the 350 subscriptions threshold. In the new program, Twitch adds a new level of revenue split (60/40), restructuring the thresholds at which creators can qualify for the program and expanding the program beyond partners to affiliates.
This new program begins in May, subscriptions are assigned a number of points and those points determine which of the two tiers a creator qualifies for. Level 1 subscriptions at $4.99 standard are worth one point, Level 2 subscriptions at $9.99 are worth two points, and Level 3 subscriptions at $24.99 are worth six points. The new tiers of the Partner Plus program, which Twitch will now call the Plus Program, are broken down below.
Twitch says this new Plus Program will triple the number of creators who can take advantage of specialized revenue divisions.
Finally, the biggest change coming to Twitch monetization affects the Prime Gaming subscription. Prime Gaming is a perk of maintaining an Amazon Prime or Prime Video subscription whereby a member gets a free Twitch subscription that will be given to one creator each month. From a creator's perspective, a Twitch Prime subscription works the same as a regular subscription: the typical creator receives 50 percent of the value of that subscription, or $2.50. (Larger streamers, in some cases, receive 70 percent of a core game subscription, or $3.50, and all of these values are adjusted based on the creator's local currency.)
Starting June 3, Twitch will change this payment to a flat rate based on the creator's country (see table here) and the company said it will essentially result in a pay cut for streamers.
“While any decrease will be disappointing, the difference between what streamers receive today for a Prime Gaming subscription and what they will receive after the switch to fixed rates is less than 5 percent in the vast majority of countries,” Clancy writes. According to the table, in the United States, a Twitch Prime subscription will now pay $2.25 instead of $2.50.
A large number of creator signups come from the Prime Gaming benefit, and the company hopes that any potential negative feelings associated with this change will be offset by the expansion of the partner program and the removal of the $100k limit, both of which could help increase income.
Twitch has been struggling financially, leading to numerous layoffs and some of its top executives leaving the company. In a livestream shortly after the announcement that Twitch would lay off more than 500 people, CEO Dan Clancy said that Twitch was not profitable and that the layoffs, along with other unspecified changes, were critical to keeping the company healthy. In the blog announcing the monetization changes, Clancy echoed that sentiment.
“We believe this is the right structure for the program going forward and are making this change to ensure the monthly Twitch subscription available to Prime members is a sustainable, long-term benefit for the Twitch community.”
