Like many major tech companies, Amazon is looking to cut costs. Its Twitch division recently laid off 35 percent of its head count (just over 500 employees) and now it's reducing how much streamers make from each Twitch Prime subscription.
Every Amazon Prime member can toss a Prime subscription in the direction of their favorite Twitch streamer at no extra cost. Since that program debuted in 2016, streamers have received the same amount from Twitch Prime subs as they do from a base paid subscription. That's changing, though.
Starting on June 3, Twitch is moving to a fixed-rate model that bases Prime payouts based on the location of a Prime subscriber (and how much they pay for Amazon Prime)."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 for the Twitch community," CEO Dan Clancy wrote in a blog post.
Clancy says that for most countries, the payout rate is dropping by less than five percent, but there are steeper drops elsewhere. For instance, a Prime sub from a viewer in the US will soon be worth $2.25 to a streamer, down from $2.50. That's a drop of 10 percent. A Prime sub from someone in the UK will soon be worth $1.80, while one from a viewer based in Turkey will pay a streamer just nine cents.
As Clancy points out, Prime subscriptions are just one of the ways that streamers can earn money on the platform, alongside tips and regular paid subscriptions. He also announced some changes to the Partner Plus program, which is designed to give smaller creators a bigger slice of the pie.
Twitch is making it much easier for creators to benefit from improved revenue sharing. Until now, they've had to maintain at least 350 paid subscriptions for at least three months. That would qualify them for a 70 percent cut of subs for the next 12 months, up from 50 percent.
Starting on May 1, the platform is changing Partner Plus to a two-tier Plus Program that's based on a points system. A base $5 subscription is worth one point, a $10 Tier 2 sub is worth two points and a $25 Tier 3 sub three points. Gift and Prime subs don't count toward points, but qualifying streamers will get a better cut of revenue from gifted subscriptions.
When a streamer earns at least 100 Plus points for three consecutive months (points reset on the first of each month), they'll receive a 60 percent split of subscription revenue from the next 12 months. If they maintain 350 Plus points, that revenue share jumps up to 70 percent in their favor. Clancy says these changes will enable three times as many streamers to qualify for improved revenue sharing. It should result in a solid increase in earnings for many of them, while giving those who hover around 300-350 points a bit more of a cushion instead of dropping back to a 50 percent revenue share
Twitch announced one more change to its revenue-sharing model. It's getting rid of the $100,000 cap on the 70-30 revenue split for high-earning creators. A change implemented last year saw that split drop to 50 percent after a streamer hit $100,000 in subscription revenue. This won't change anything for the vast majority of creators, but it could help Twitch convince high-profile streamers to stay on its platform instead of jumping to the likes of YouTube or Kick.
In the wake of the layoffs, Clancy said Twitch is still unprofitable (streaming live video to millions of people simultaneously isn't cheap!), so something had to give. While the Twitch Prime changes will be hard to swallow for some streamers, the perk wasn't really sustainable as is. Reducing payouts is better for creators than the program going away entirely. Twitch will also be hoping that improved revenue sharing will push creators to convince their viewers to shell out for a paid subscription instead.