Twitch, the world’s largest streaming platform, has been at the forefront of the gaming and esports industry since its inception. One of the key factors that has enabled Twitch to become a major player in this space is its monetization model, which sees the platform take a 50% cut of the revenue generated by streamers.
While some have criticized this model as being unfair, Twitch has remained steadfast in its commitment to the 50/50 split.
Two of the platform’s directors issued statements in another medium arguing why Twitch defends the 50/50 model despite the temptation of other streaming platforms.
It is clear that the second half of March 2023 is not the best time for Twitch, a platform that is always in the eye of the hurricane due to its size and current impact in the digital world.
Why does Twitch insist on sticking with their 50/50 split model in 2023 ?
Twitch seems to have several reasons for sticking to their 50/50 split model despite popular opinion. Below, we’ll take a look at some of these reasons :
Fairness and Transparency
Finally, Twitch argues that the 50/50 split is a fair and transparent model that benefits both streamers and the platform. The split is applied equally to all streamers, regardless of their size or level of success. This means that even smaller streamers have the potential to earn money on the platform, and can feel confident that they are being treated fairly.
Additionally, Twitch provides clear and transparent reporting on streamers’ earnings, so that they can see exactly how much money they are making and how it is being split between themselves and the platform.
One of the main reasons Twitch maintains the 50/50 split is to ensure sustainable growth of the platform. By taking a cut of the revenue generated by streamers, Twitch is able to reinvest that money back into the platform. This allows for the creation of new features and tools to support streamers, as well as the hiring of additional staff to provide better customer service.
Without this revenue stream, Twitch would have a more difficult time sustaining growth and continuing to provide the level of support and resources that streamers have come to expect.
Another reason Twitch sticks with the 50/50 split is allegedly to incentivize streamers to continue creating high-quality content on the platform. If a streamer earns more money, Twitch earns more money as well.
This incentivizes streamers to produce engaging content that attracts viewers and generates more revenue. In turn, this benefits Twitch by creating a more active and engaged community on the platform.
Will Twitch lay off 400 employees ?
Twitch is going to lay off 400 employees as a result of Amazon’s layoffs, but what has irked people the most are the reasons they have given: “The fault lies with the current economic market situation and Twitch’s growth that is out of step with income.”
Twitch’s problems appear to be worsening, as a few hours after learning about the layoffs, several platform executives spoke with The Verge and made some unusual statements.
In an interview with foreign media, Tom Verrilli and Mike Minton, directors of Twitch products and monetization, respectively, defended the purple platform’s monetization and subscriber changes as appropriate.
Both have ensured that the fact of going down from 70/30 to 50/50 was directly linked to advertising revenue, a fundamental part when it comes to monetizing content by streamers, ensuring that the monetization program was widely used and generally accepted.
And they argue that the growth of other platforms, which could be YouTube or Kick, do not scare Twitch in terms of monetization, confirming that they will maintain that 50/50 and continue to improve advertising that is increasingly invasive for the viewer, but that encourages subscriptions.
What will happen to Twitch in the future?
All this leads us to think directly of Twitch Prime, a ‘bargain’ if we take into account that just by having Amazon paid each month we can subscribe to our favorite streamer for free.
The problem is that Twitch and Amazon lose millions of dollars a month because of Prime, since with this the streamers earn more direct money and, on top of that, the company does not receive the money from a direct subscription.
Many users believe that the Prime will be history in a matter of months, although there is no official confirmation or anything, just an assumption that, if true, would be a blow to streamers.
Here’s what youtubers like penguinz0 say about Twitch’s decision
Conclusion on Twitch’s 50/50 split model
While some have criticized the 50/50 split model employed by Twitch, the platform has remained committed to this model for a reason. By investing in the success of its streamers, Twitch is investing in its own success as well. The 50/50 split allows for sustainable growth, incentivizes high-quality content creation, and provides fairness and transparency to all streamers. As Twitch continues to dominate the streaming space, it seems likely that the 50/50 split will remain a key part of its monetization strategy for the foreseeable future.