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Twitch The Media Convergence Media Planning and Buying

Twitch wanted to curb third-party advertising, streamers fought back

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By John McCarthy, Opinion editor

June 8, 2023 | 7 min read

Twitch has U-turned on a controversial decision to limit the in-stream monetization capabilities of streamers after 24 hours of sustained criticism from talent.

Streaming rules

Twitch wanted to curb third-party advertising, streamers fought back

On June 7, the Amazon-owned live-streaming giant announced new monetization policies that ultimately would prevent creators from embedding third-party sponsorships and advertising in their streams. This would limit the amount of income streamers could draw. In particular, esports teams and events, and charity streams would come under the cosh.

Twitch, presumably wants spend going through its official channels, rather than through creators and third-party technology in an ad hoc manner. Pre-recorded audio and video ads, as well as on-screen display graphics were restricted. Furthermore, sponsor logos were limited to 3% of screen size, which is just large enough to view but wouldn’t exactly be a desirable sponsorship asset.

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Top talent was fast to criticize these moves in no uncertain terms and some questioned whether they’d remain on the channel. More verbose than MoistCr1TiKaL’s “dogshit” accusation, Zack Hoyt (Asmongold) merely said Twitch was implementing the changes to “monetize, monopolize and take advantage of smaller streamers”.

Twitch has in place a 50/50 revenue split with creators. Just a few years ago, it was 70/30 in favor of the creators. It is true that many find advertising loopholes and opportunities to rebalance what they find to already be an over-reach by the platform

Speaking to The Drum, Arda Genç, co-founder and chief exec at Livad Technologies, a business that helps creators burn these ads and sponsorships into streams, said he “understands Twitch’s need for profitability” to help keep the streaming ecosystem it basically created sustainably.

He explained: “It is past its growth phase and needs to monetize the eyeballs now. All social platforms go through the same evolution. Both Facebook and Instagram limited organic reach significantly to leave anyone wanting to get meaningful reach on their platform with their ad products as the only option. This was its way of boosting ad revenue. People were annoyed at these changes, but most didn’t feel personally attacked.”

It is different now with Twitch. “[The others] didn’t proactively handicap the revenue opportunities creators proactively created, such as direct-sold partnerships or third-party influencer/sponsorship marketplaces. The desire to monopolize all brand messaging, including UGC and the creator-driven brand sponsorships, is where I think Twitch goes too far and significantly alienates its community: the essence of what has made it into what it is today.”

Also in the blink of an eye, the move looks set to “shut down an entire streamer sponsorship industry that could flourish, become home to creative ideas and pave the way for win-win activations, all the while increasing the popularity of Twitch and making it more viable as a platform in which creators can actually make a living doing what they love.”

Speaking before the streamer’s U-turn, he said it would most likely harm small- and mid-sized streamers who rely on third-party networks to find sponsors and high-cost productions that rely on third-party ads and sponsors to make their shows a reality.

On a more critical level, Twitch sends a message to creators with these changes, that “their channel is not their space; they are simply borrowing it”. A great many creators will not be “comfortable” with this.

Genç concludes: “Creators today have options, and they will choose the options where they feel confident in their ability to own, operate and monetize their content and relationship with the community that they work so hard to build.”

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Twitch has never faced so much competition in streaming and creators are highly aware it’s unwise to put all their eggs in one basket when it comes to platforms. Twitch will have to ask itself how far it can push users.

Twitch The Media Convergence Media Planning and Buying

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