Why Twitch’s Streaming Cost-Cuts Make Sense; Twitter Teases an ‘Undo’ Feature

Twitch, the livestreaming platform popular with gamers, is making a big push to appeal to more viewers outside of the U.S. by slashing prices on subscriptions to its streamers’ channels. The move makes sense, given the wide gap between people who watch Twitch  and those who want to pay for it regularly. But Twitch has to proceed gingerly: As star streamers like Ninja have shown, they’ll hop to rival platforms for the right deal. 

The Amazon-owned service on Monday said it will change the cost of subscriptions to streamers’ channels in most countries to better reflect the cost of living, starting in Mexico and Turkey. Channel subscriptions, which give fans perks like ad-free viewing or exclusive chats, are the most popular way for streamers to make money on Twitch. The cheapest subscription costs about $4.99 a month in every country, with Twitch and streamers splitting revenue 50-50.

That price is too rich for many would-be viewers, and Twitch is betting the changes will attract bigger audiences. In one recent test, Twitch said cheaper subscriptions in Brazil more than doubled creator revenue and total subscriber count. The percentage of Twitch subscribers in Europe or Asia is roughly 50% lower compared to North America, and it’s even more in Latin America. 

The downside of price cuts is that streamers with big non-U.S. followings could see a hit to their earnings before they get more subscribers. To offset the pain, the company is launching a year-long program that guarantees a streamer’s revenue, starting at 100% for three months and then decreasing by 25% every three months over the next nine, for creators who meet requirements, such as maintaining close to their average number of streaming hours. 

Twitch’s move should help the company expand its number of paying users outside of the U.S. More than three-fourths of Twitch’s desktop traffic comes from outside the U.S., according to Similarweb, which tracks internet traffic analytics. Streamers, however, can easily hop to another platform. In 2019, Twitch streamer Tyler “Ninja” Blevins left for what was then Microsoft’s Mixer platform over fewer restrictions on licensing deals. (Now he’s back on Twitch again.)

“Creators are an extremely valuable group of people to keep happy,” said Mae Karwowski, CEO of marketing agency Obviously, which works with online gamers. “Twitch knows it’s walking a fine line here.” 

Here’s what else is going on…