Twitch is betting against streaming superstars

From scamming drama to a ban on gambling streams, Twitch just had one of its most eventful weeks ever. But perhaps the most important move in the midst of Twitch’s headlining news was all about monetization. On Friday, Twitch president Dan Clancy announced that the platform is changing its current revenue splitting model for the platform’s biggest streamers, cutting the portion a streamer gets from 70% down to an even 50/50 split — the same one the platform’s other creators are offered.

Streamers of all sizes were upset with the decision. For a more detailed look at why streamers aren’t happy with Twitch’s new plan, you can read a breakdown from Ash Parrish at The Verge. But beyond streamer dissatisfaction, it’s worth digging into why Twitch made this decision — and what it could signal about the platform’s future.

The short version of Twitch creators’ complaints is that they already felt that the 50/50 split that most streamers were offered was too low, especially considering that competitors like YouTube (Twitch’s biggest competition, at least until TikTok livestreaming grows) are offering everyone the 70/30 deal. Twitch lowering the earning ceiling has dashed smaller creators’ hopes of getting a raise anytime in the near future.

For the stars at the top end, Twitch is basically daring them to make the jump to YouTube. After all, they just learned they could be losing out on thousands of dollars a month. While this may sound risky for the platform, it seems clear that Twitch doesn’t believe it actually needs superstar streamers. The company is making a bet that its users are loyal enough that it can simply create new stars, rather than paying a premium to keep the ones it has.

It isn’t an unreasonable bet to make. After all, Twitch is the platform to beat for livestreaming at the moment. In the short term, Twitch is the streaming site with the most eyes glued to it at any one time. Some streamers, like Valkyrae, have already proven that a move to YouTube can be highly successful, but for many others, they often see a drop in viewership because their entire Twitch audience won’t migrate to their new platform — something that streamers learned during Twitch’s first big exodus with personalities like Shroud and Ninja signing deals with Microsoft’s now-shuttered Mixer platform.

But perhaps even more importantly, particularly to smaller streamers, is that Twitch is easily the best platform for discovering new streamers. Discoverability is awful on YouTube. The Live hub is hard to find, and the homepage aggressively prioritizes your algorithm over categories, giving viewers numerous hoops to jump through to find an unknown streamer to watch.

This issue creates a feedback loop where YouTube is forced to partner with big streamers who can bring in an established audience in order to get viewers, but those viewers are only fans of that creator, and because discovering someone new is hard, increased viewers for one streamer won’t necessarily lead to growth for other smaller streamers.

Twitch has another secret weapon in the streaming platform war: Twitch Prime, a “free” benefit of an Amazon Prime membership that allows the user one Twitch subscription a month without paying anything.

While part of this is what Twitch is using to justify its 50/50 split, the benefits of the product are undeniable. Prime is a way to essentially gift streamers with extra subscriptions without asking viewers to lay out any cash. It’s also a way to monetize a large portion of Twitch’s audience — children — who might be using their parents’ Amazon account. Those kids may not have a credit card to lay down a monthly subscription, but with Prime they can still subscribe to their favorite streamer.

All of this has combined to give Twitch a massive lead against its streaming platform competition, and one that it retains despite losing some top-tier talent to services like YouTube. While Twitch superstars like Pokimane and Hasan still wield immense power (which they proved by banding together to get gambling banned from the platform last week), Twitch’s new policy makes it clear who’s actually pulling the strings. More importantly, even if Twitch loses creators like xQc or Code Miko, Twitch’s thousands and thousands of smaller streamers making the leap to a competitor is difficult to imagine right now. At the moment, it’s the only streaming site with the right tools to help them become stars.