Twitch is making big monetization changes again in an attempt to make a more sustainable system, lowering earnings in some places and raising them in others. This new batch of changes includes expanding its Partner Plus program and changing the way its integral Twitch Prime Gaming subscription pays out creators.
In a blog post, CEO Dan Clancy outlined three major changes coming to the ways streamers make money from Twitch.
First, Twitch is eliminating the $100,000 cap on its 70 / 30 revenue split for the platform’s highest-earning creators. Last year, Twitch implemented a plan in which the highest-earning streamers would have their subscription revenue beyond $100,000 reduced from 70 / 30 to 50 / 50.
“We are removing the US$100K cap on net revenue at the 70 / 30 revenue share level for all streamers, including those in the Partner Plus Program, effective immediately,” the blog post read.
Clancy wrote that the cap “served as a disincentive.” Having a program in place that penalizes the highest earners seems bad for business, especially as Twitch’s largest streamers (and thereby its biggest assets) are increasingly looking beyond the platform to make a living or are being wooed away by huge contracts from competitors.
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 straight become eligible for a 70 / 30 revenue split for the following 12 months, even if they dip below the 350 subscription threshold. In the new program, Twitch is adding a new revenue split tier — 60 / 40 —retooling the thresholds at which creators can qualify for the program and expanding the program beyond partners to affiliates.
This new program begins in May, with subscriptions being assigned a number of points and those points determining for which of the two levels a creator qualifies. Tier 1 subscriptions at the standard $4.99 are worth one point, Tier 2 subs at $9.99 are worth two points, and Tier 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 that this new Plus Program will triple the number of creators who can take advantage of specialized revenue splits.
Finally, the biggest change coming to Twitch monetization impacts the Prime Gaming subscription. Prime Gaming is a perk of maintaining an Amazon Prime or Prime Video subscription whereby a member earns a free Twitch subscription to be given to a creator every month. From a creator’s perspective, a Twitch Prime sub works the same as a regular sub with the typical creator receiving 50 percent of that subscription’s value — or $2.50. (Larger streamers, in some cases, receive 70 percent of a prime gaming sub, or $3.50, and all these values are adjusted based on a creator’s local currency.)
Starting June 3rd, Twitch is changing this payment to a flat rate based on the creator’s country (check out the table here) and the company said it will essentially result in a pay cut for streamers.
“While any decrease will feel disappointing, the difference between what streamers receive today for a Prime Gaming subscription and what they will receive after the change 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 creators’ subscriptions come from the Prime Gaming perk, and the company is hoping that the potential negative feelings associated with this change will be offset by the expansion of the partner program and the elimination of the $100K cap, both of which could help to raise earnings.
Twitch has been struggling financially, resulting in numerous layoffs and some of its top executives leaving the company. In a livestream held shortly after the announcement that Twitch would be laying off over 500 people, CEO Dan Clancy said that Twitch was not profitable and that layoffs, in addition to 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 that the monthly Twitch subscription available to Prime members is a long-term, sustainable benefit for the Twitch community.”