October 2, 2022

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Software Development

Twitch ad incentives leave streamers elated, frustrated

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Last week, Twitch informed users of an update that, on paper at least, sounded like what many streamers have been asking for since the live-streaming giant first started cutting checks: a more favorable pay split. But streamers have struggled to understand the new system, which in some instances pays them handsomely and, in others, shortchanges them relative to their normal take.

On Twitch, ads run before and during streams, similar to ads on some YouTube videos. Streamers have a degree of control over this: When they choose to run an ad manually, for example, the platform disables pre-roll ads for a set period of time. (Twitch is owned by Amazon, whose founder, Jeff Bezos, owns The Washington Post.) The newly updated ad incentives program is an attempt at bolstering this system. Using Twitch’s built-in ads manager, partnered streamers can view and claim personalized ad offers in exchange for a month’s worth of hours streamed. One example offer on Twitch’s site shows an incentive of $500 in exchange for four minutes of ads per hour, given at least 40 hours of streaming during the month. Any ads run after the incentive goals are satisfied would be paid out at the platform’s standard rate.

Previously, these offers were calculated using a flat rate for every 1,000 ad views on a streamer’s channel. The update, which rolled out June 14, switches the program over to a percentage-based model, with streamers getting 55 percent of the revenue for each individual ad that runs on their stream. In a blog announcing the change, Twitch estimated “a 50-150 percent ad pay rate increase for the vast majority of creators on Twitch.”

Following the update, some users have reported offers that reflect gains of over $100 for fewer hours streamed with a high volume of ads enabled. Others, by contrast, have lost out on hundreds of dollars of revenue compared to previous months. A variety of factors including audience size, ad availability and location have caused significant variation in ad revenue month over month. Streamers, however, are none the wiser as to which factors in particular are causing what.

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In April, Bloomberg reported that Twitch intended to scale back how much it’s paying top streamers — from 70 percent of revenue from paid channel subscriptions to 50 percent — and emphasize ads in an effort to drive profits. Several current and former Twitch employees told The Washington Post that the former initiative relating to subscription revenue to big streamers is basically already in effect, with the company largely halting new 70/30 deals in January of last year.

Twitch makes the bulk of its money on ads. Twitch viewers, however, hate ads. On a live platform where nobody wants to miss a big moment, ads can function as a serious roadblock. And since historically, ad revenue hasn’t stacked up to the more meaningful revenue derived from viewer subscriptions and donations, streamers view ads as obstacles to shove out of the way by any means possible. And so, Twitch and its streamers are at an impasse — one the company has sought to overcome for years.

Kacey “Lowco” Shields, a Twitch partner who focuses on streamer growth and education, pays close attention to the hows and whys of Twitch monetization. She’s a beneficiary of the recent changes, with a July offer of $123 if she runs three minutes of ads every hour, assuming she streams 44 hours or more over the course of the month. In a prior month, the same schedule would have gotten her $27 — and she would have needed to stream 70 hours in total. Like many other streamers, however, she’s scratching her head over the particulars.

“They suggest factors like geography, season, viewership, etc. can all affect your rate, but it’s a total mystery how they factor in, and I don’t think that’s information they are going to publicize,” Shields said. “The program definitely needs to improve how it determines rates because there seems to still be a huge disparity and inconsistency in what offers streamers are getting.”

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On the other side of coin is multilingual Twitch partner Oxillery, who did not provide her full name. In June, during which she and a few friends received “crazy big” offers, Oxillery said Twitch’s ad incentive program would have netted her over $1,100 for four minutes of ads every hour (given 160 hours of streaming that month), $750 for three minutes of ads per hour or $500 for one minute of ads per hour. The offer for July is $200 for four minutes of ads per hour for 110 hours of streaming.

The discrepancy alarmed her, so she asked Twitch about it. As she understands it, ad payouts are not as predictable as Twitch wants them to seem, because the company is constantly negotiating ad deals with other companies.

“It’s not a cohesive or clear model,” Oxillery said.

There are other potential downsides as well. Like pay, growth on Twitch is highly volatile. Even just a couple speed bumps can be enough to send viewers packing — and opportunities with them.

“Lately due to TikTok, I’ve been experiencing rather explosive growth, so [agreeing to an ad offer] is actually a risk to take in my case,” said Stefen “SipSipStefen” Matias, who expressed concern that if he locks himself into one ad deal at the start of a month and then grows exponentially, he might be leaving money on the table. “When you’re growing on Twitch, it’s all about momentum, and taking a higher ad density might cause people to watch less, throwing off any [momentum] you’re currently building. At this point in my career I think I should just take the low ad density and focus my efforts on getting sponsorships/partnerships, which pay out way more than anything Twitch is offering.”

The program’s current structure also leaves little wiggle room for streamers who can’t maintain consistent schedules due to, for example, health issues.

“As a disabled partner who went from 2,000 subs and 300 [concurrent] viewers to less due to my health issues, it’s insulting to be offered less than $20 a month,” said ComfyLenox, a Vtuber who did not provide their real name. “Forcing people to stream as much as possible or they won’t receive [compelling future] incentives — as it seems to be based on the prior month’s stream time — is unhealthy and unfair.”

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Other streamers, like BriAtCookiebox, another Vtuber who maintains privacy around her real identity, suggested greater flexibility in terms of when ads run. Currently, streamers have to rely on Twitch’s built-in ads manager, which allows streamers to schedule when ads run but not to manually trigger ads at any given moment.

“I know a lot of streamers do regular content mixed in with ASMR streams, and ads are extremely obtrusive during ASMR streams,” she said. “It would be nice to be able to turn off ads during that time period, in exchange for a smaller pay cut of the incentive.”

Some streamers are looking at offers so generous they can’t say no. In those cases, they’ve taken to explaining to their audiences why they’re going to be running more ads, a move that’s been met with understanding. But even with increases to their payouts, others are seeing more red flags than dollar signs.

“Accounting for the new 55 percent split, I would receive $28 total for the entire month,” BriAtCookiebox said. “The only way I would do it is if I could show that amount to my viewers and explain to them why it would be beneficial to me to do ads. And $28 isn’t beneficial for anyone.”



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