Twitch is once again making major changes to monetization in an effort to create a more sustainable system, cutting revenue in some places and increasing it in others. This new set of changes includes expanding the Partner Plus program and changing how the all-in Twitch Prime Gaming subscription pays creators.
In a blog post, CEO Dan Clancy outlined three major changes to the way streamers make money with Twitch.
First, Twitch is eliminating the $100,000 cap on the 70/30 revenue split for the platform’s highest-earning creators. Last year, Twitch implemented a plan where the top-earning streamers above $100,000 would have their subscription revenue cut from 70/30 to 50/50.
“We are removing the $100,000 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 said.
Clancy wrote that the cap “had a discouraging effect.” Having a program that penalizes the highest earners seems bad for business, especially as Twitch’s biggest streamers (and therefore its biggest assets) increasingly look outside the platform to make a living or are chased away by huge contracts from competitors.
The next big change comes to Twitch’s Partner Plus program. As it stands now, partners who manage 350 paid subscriptions for three months are eligible for a 70/30 revenue split for the next twelve months, even if they fall below the 350 subscription threshold. In the new program, Twitch is adding a new revenue split – 60/40 – redesigning the thresholds at which creators can qualify for the program and expanding the program from partners to affiliates.
This new program starts in May, with a number of points awarded to subscriptions. These points determine which of the two levels a creator is eligible for. Standard $4.99 Tier 1 plans are worth one point, $9.99 Tier 2 plans are worth two points, and $24.99 Tier 3 plans 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 benefit from specialized revenue distributions.
Finally, the biggest change in Twitch monetization affects the Prime Gaming subscription. Prime Gaming is a benefit of maintaining an Amazon Prime or Prime Video subscription, where a member earns a free Twitch subscription each month that can be given to a creator. 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 premium gaming sub, 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 subscriber’s country (see the table here), and the company said this will essentially result in a pay cut for streamers.
“While any decline will be disappointing, the difference between what streamers receive today for a Prime Gaming subscription and what they will receive after the change to flat rates is less than 5 percent in the vast majority of countries,” Clancy wrote . According to the table, a Twitch Prime subscription in the United States now pays $2.25 instead of $2.50.
A large number of creator subscriptions come from the Prime Gaming benefit, and the company hopes that the potential negative sentiment associated with this change will be offset by the expansion of the affiliate program and the elimination of the $100,000 limit, both of which could help increase revenues.
Twitch has been struggling financially, which has resulted in numerous layoffs and the departure of several top executives from the company. In a livestream held shortly after the announcement that Twitch would be laying off more than 500 people, CEO Dan Clancy said that Twitch was unprofitable and that layoffs, among 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 to the Twitch community.”
Correction January 24, 2:30 PM ET: Payouts for Prime subscriptions are based on the subscriber’s country, not the streamer’s, as this piece initially stated.