Twitch Struggles To Bring Streamers Back After Ridiculous Monetization Reforms

From live esports to humble VTubers – streaming content creators’ videos has been quite a popular pastime for many people, and though it received a sudden meteoric rise during the COVID pandemic, it can’t be denied that people are keeping up with their favourite online personalities. There have been many streaming channels competing for both creators’ and consumers’ attention, but one has reigned supreme since 2011, and that’s none other than Twitch.

However, despite its sheer popularity, streamers have voiced their dismay with the platform for all its automated replies and terrible customer service. Still, many choose to stay, as not only have they made it their home, but they find the act of transitioning bothersome, leading them to endure it all – that is, until recently, when Twitch decided to target streamers’ main source of income, resulting in a mass exodus of both creators and viewers. Here’s what’s happening.

Ads, Ads, Ads

As much as we hate ads, they do put food on the table for streamers. With all the donations streamers are receiving from their viewers, you might think that that is their main source of income, but that cannot be further from the truth. Twitch is a big platform, but it is also “free”, which begs the question of how they keep the lights on at their headquarters. Well, for starters, they take a cut from the streamers’ revenue and work on a 50-50 split between the creator and the platform they are streaming on.

However, if you are a top streamer, you’d receive 70% instead of the standard 50%. This demands that you stream for the better part of a week, but as a main source of revenue, many chose this and turn it into their profession. However, Twitch decided to roll back on this, giving top streamers the standard 50-50 split again. Despite the public outcry, Twitch stuck to their guns, causing many to move to greener pastures or adapt. Those who adapted leaned heavily towards advertising.

Though annoying for viewers, it is through these sponsorships that they are still able to watch their favourite streamers. Not only that, alongside the revenue from the platform, content creators can receive additional funding from the ads they are running without the middleman taking a bite out of it. But we can’t always have nice things.

Reforms, Backlash & Rollbacks

Twitch has new Branded Content Guidelines.

– On-stream logos are limited to 3% of screen size.
– Burned-in video Ads are NOT allowed.
– Burned-in Display Ads are NOT allowed.
– Burned-in Audio Ads are NOT allowed.#TwitchNews #TOSgg pic.twitter.com/QrlrQhGAbm

— Zach Bussey (@zachbussey) June 6, 2023

Twitch announced their new guidelines for branded content (with images), and it simply annihilates all streamers’ bottom lines. To keep things concise, banner ads, video ads, audio ads, and burned-in ads (meaning pre-recorded ads or commercials that are embedded directly into the stream) are all gone. Keep in mind that these are the most common forms of ad placement. These immediately ruin esports events, like Valorant, Dota 2, or CS:GO tournaments, as most if not all of them rely on the ads mentioned above to recoup their losses, whatever they may be.

It’s not just big companies either; even small groups and individuals are feeling the pinch as they are being forced to lose massive portions of their revenue. It is because of this that, only a few hours after Twitch’s announcement, people were quick to join forces and boycott the platform. Big streamers with an established fanbase fought tooth and nail against this sweeping restriction, while medium- to small-scale streamers decided to migrate to other platforms as a form of protest, with some voicing old grievances along the way. 

Today’s branded content policy update was overly broad. This created confusion and frustration, and we apologize for that.

— Twitch (@Twitch) June 6, 2023

However, instead of falling on their sword and apologising, Twitch decided to gaslight its user base and say that there was a great deal of confusion with how people interpreted their guidelines, even though their provided images left nothing to the imagination or alternative interpretations. This sparked even more backlash, resulting in a follow-up statement that was posted the day after, rolling back all changes for good as a response to the rapidly dwindling number of active accounts. 

Sponsorships are critical to streamers’ growth and ability to earn income. We will not prevent your ability to enter into direct relationships with sponsors – you will continue to own and control your sponsorship business.

— Twitch (@Twitch) June 7, 2023

Twitch has since removed the guideline changes from their website, but despite this and their apology, many chose not to return, instead opting for other alternatives like YouTube or Floatplane. Now, Twitch is forced to pick up the pieces and rebuild in order to regain at least a fraction of what they have lost.

Source: Wikimedia Commons [1], [2], Twitter [1], [2]