Amazon is reportedly considering increasing the frequency of ads on its Twitch streaming service. Bloomberg had the opportunity to exchange with people close to the platform. According to them, the company of Jeff Bezos would be in full reflection to make changes to the economic model of Twitch. Paying bigger streamers by subscription could earn them less money and viewers would then be exposed to even more ads.
Users soon to be drowned in advertising?
Streamers and viewers will potentially see their user experience deteriorate this summer on Twitch. Lower remuneration for the former and more advertising for the latter. This is reported Bloomberg, following an exchange with anonymous sources who work with the streaming platform. The watchword of this new strategy according to them: encourage streamers to launch more advertisements.
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Today it is content creators who have the power to choose the frequency with which advertisements appear during their broadcasts. While some streamers have made the decision to never run ads while they’re live because they believe they’re making enough money through subscriptions and donations, they may need to change their ways.
Advertising on Twitch has always been controversial. As soon as an ad starts, it prevents viewers from following the live broadcast. They can then miss highlights or performances, especially if it is an eSport competition. Thus, many streamers choose not to drown their viewers in advertising content so as not to alienate them.
The only solution, to date, to avoid advertising as “viewers”: subscribe to your favorite streamer or streamer. By doing so, the viewer is no longer exposed to any advertising, at the price of €3.99 per month in France. However, according to the information relayed by Bloombergthe subscription will soon be less profitable for streamers partnering with Twitch.
Picture: Twitch.
A poorer distribution of income
The distribution of subscription income, which for the moment is 70% for the biggest streamers, could increase to 50% for these same steamers. A change that would be to the detriment of videographers, who to compensate for this loss will be encouraged to launch more advertisements. Amazon is aware that this news may displease and would then return to another key point of its policy.
Streamers partners with Twitch will have the freedom to broadcast their live on other platforms, even competing ones, such as Youtube or Facebook Gaming. A few years ago, the GAFAMs were at war with each other by reserving the services of the biggest streamers for several million dollars. They wanted to make them the standard bearers of their platform. In 2019, Mixer, Microsoft’s streaming platform which closed a year later, paid $ 50 million to buy the American streamer, Ninja.
If this proposal is not enough, the platform would also consider giving additional income to partner streamers who will launch advertisements. It could also choose to give a bonus, occasionally, to streamers who have been the most effective. Finally, even if no details were given, there could be different levels of partnership with specific conditions for each.
Discussions at Twitch to change the partner system have been going on for several years. There is a real work-life balance issue among streamers. In 2021, the drop in subscription price from €5 to €4 has encouraged streamers to stream longer to earn as much. Some are live for more than twelve hours a day, sometimes with harmful consequences on their health, even burnout, as reported Numerama. In response, there are hypotheses to pay for streamers’ health care or even the possibility of being able to temporarily pause subscriptions so as not to lose support.
Twitch in a dominant position
If Amazon is looking into these questions, it has to do with Twitch’s financial situation. The costs of maintaining the platform are extremely high. The company believes that it has grown the platform enough and now wants to make it profitable over time. She knows that Twitch is dominant in the streaming industry. This explains why she’s not afraid to anger streamers.
Ah, is that why they tried to pass the goodies on to us like 6-year-olds as rewards?
It’s to better pass the pill of “✨ abusive monopoly ✨” https://t.co/Y7mdetR2MN
— AVA MIND || ? (@avamind_) April 27, 2022
Streaming has been a real hit since the pandemic. Bloomberg clarifies that there are currently 51,500 partner streamers on Twitch and that 24% of American Internet users, aged 16 to 64, said they had watched streaming content during the health crisis.
Amazon understands that streaming is a sector that will continue to grow in the future. Esports is one of the growth factors for platforms like Twitch. The streaming of video game competition will reach 532 million spectators by the end of 2022, according to forecasts by analyst Newzoo. Forecasts that support Amazon in its current management of Twitch, which wants to make it a major economic asset.