Twitch is Reportedly Restructuring its Creator Pay System in Hopes of Securing More Profit

Twitch is the largest and most widely-used streaming platform in the world as of 2022, despite growing competition. The site, which is owned by Jeff Bezos’ Amazon, has various degrees of monetization baked into the platform to incentivize creators and viewers alike. The biggest earner for streamers on Twitch is subscriptions. Unlike YouTube, subscribing to a streamer on Twitch is actually not free. Viewers can pay a minimum of $5 per month to subscribe to their favorite creator, either on a multi-month or just a one-off basis.

That’s the reason why streamers on Twitch always thank the subscribers whenever they are “gifted” subs, because it is actually real-world money that the creator gets. Obviously, Twitch being an intermediary and the platform provider facilitating this exchange of gratitude takes a cut from this fee. Currently, the streaming site takes 30% of the share, leaving 70% of the sub money to the streamers. However, it looks like Twitch is reconsidering this.

More profits on Twitch, but for Amazon

According to a new report by Bloomberg, anonymous sources have told the outlet that big changes are in order at Twitch. The live-streamer is currently working on revamping how it pays its creators and these changes could arrive as soon as summer of this year. The main highlight here is the reduction in the subscription share. If the current plans materialize, Twitch streamers’ 70% cut of their subs would be narrowed down to just 50%, making it an equal share between the platform and the creator.

Next up is the introduction of a tiered ad system for non-subscribers. Twitch will create designated tiers, each with their own unique set of requirements. Depending on the criteria, a creator will fall into one of these tiers where they will incentivized to push more ads, more aggressively to non-subscribers. Remember, viewers who are subbed to the channel do not receive ads, so this change won’t apply to them.

The iconic Amazon smiley-arrow alongside the Twitch logo signifying how Amazon owns the latter | Nerd Bacon

Obviously, more ads means more money for Twitch and its parent company Amazon. But, this could actually bring a silver lining for the creators as well. Bloomberg’s sources say that a massive shift like this could actually offer more freedom in exchange, something that Twitch streamers have long yearned for. Twitch has exclusivity contracts in place for larger streamers which restrict them from streaming on other platforms. However, with the advent of this new tiered system and the reduction in the sub share, Twitch could finally change this policy.

It’s being said that in return for this less lucrative pay structure, Twitch will let creators on its site go live on competing platforms, giving them free reign over their brand. Expanding the streaming portfolio could net an emerging streamer the perfect opportunity to capture a share of every market they want, which would balance out the harsher wages that would now come from Twitch. 

As you could tell, this is a pretty significant overhaul and that could be met with backlash upon implementation. That’s why it’s not final yet and Bloomberg’s sources tell us that this could be altered or dropped entirely if things don’t pan out. Bloomberg is about as credible as a source can get so we would advise everyone to take this news with a grain of salt as it can go both ways in the end.

A fine line to walk

Interestingly, this plan-in-the-works comes just two months after Twitch introduced a new program already that encourages streamers to push more ads. On top of that, subtle tweaks and changes involving efforts to boost the company’s long-term profits and keep shareholders satisfied were also implemented earlier this year. It seems pretty evident that despite Twitch’s success, Amazon sees it as an integral pillar of the company that has more untapped potential for profit, which it wants to squeeze out right away.

Whether we see this overhaul actually take place this summer or not is still a mystery. In wake of increasing competition from rivals such as YouTube and Facebook Gaming, this seems like an immature move from Twitch and Amazon who’ve already lost big names like DrLupo and Timthetatman to YouTube Gaming over the past few months. Regardless of whatever happens, if creators are not satisfied with the pay they get at Twitch, they could leave the company for a rival platform for a better contract easily.

Timthetatman (left) and DrLupo (right) at Gamer’s Choice Awards 2018. Both are mega streaming stars that started on Twitch and have now shifted over to YouTube | The Verge

Not only that, Twitch is also under a mirage of controversy as concerns over unfair treatment of creators on the platform is becoming more and more apparent. Taking even a month off from streaming to go to vacation can result in a drastic drop in subscriber count. Streamers have to wind themselves out by staying live for several hours on end to satisfy the algorithm. Essentially, Twitch isn’t kind to creators who don’t burn themselves out.

For Twitch to implement even more monetization for their own greedy gains will certainly not leave a pleasant impression on the community and can strain the brand’s image further. Bloomberg’s report does say Twitch and Amazon are, thus, evaluating this decision carefully to ensure more backlash than usual isn’t warranted. At the end of the day, if large streamers can’t justify sticking around for a potentially lower pay, Twitch might find themselves in its biggest turmoil yet.

Huzaifa Haroon
Born and raised around computers, Huzaifa is an avid gamer and a keyboard enthusiast. When he's not solving the mysteries of technology, you can find him scrutinizing writers, striving to inform the curious.