Twitch report: We pay creators more than DSPs

The extensive report was published last week and examines the economics of the video-streaming platform. It highlights how the service differs in paying creators versus other music streaming platforms, and uses several examples of musicians who earn more on Twitch.

Twitch users spend an average of 15.8 hours per week on the platform, which is more than the time typically spent on Spotify, YouTube and TikTok. It also diversifies artists’ revenue streams by monetising income from three sources: ads, creator channel subscriptions and user donations (bits) – making it a more ”user centric” platform than employing a pro rata distribution model.

“To compare creator earnings on Twitch with that of global streaming, the per-stream rate used ... is set at $0.003,” the report reads. Twitch income for streamers is about $0.15 cents per hour that each fan spends streaming.

The study further reads: “Taking the $0.003 per stream and multiplying by 17 to soak up an hour of listening on the clock (assuming a song lasts just over three minutes), then applying a 20% royalty, equates to a creator’s revenue-per-hour listened of just $0.01 – less than a tenth of the $0.15 per-hour-per-user on Twitch. Established channels that have had more time to generate traction can see revenue per hour north of $0.25, with some scaling up to $0.75 cents per hour watched.”

Among the examples cited in the report was composer and sound designer Laura Shigihara, who is widely known for her work on games such as Plants vs Zombies, World of Warcraft and the 20th anniversary soundtrack for Square Enix’s Chrono Trigger and Chrono Cross. According to the study, Shigihara earned about $8 000 a month through her Twitch live streams, which is more than 10 times the approximate $700 a month that she generated from other music platforms.

Additionally, the report emphasised the importance of engaging with ”true fans” via platforms like Twitch to increase potential earnings. The report suggests that Twitch will still be a viable platform for musicians to make money after the live music industry begins to reopen in the post-COVID-19 era.

“Although Twitch can monetise over 10 times better than music streaming, this will only apply to creators’ most loyal ‘true’ fans. For example, if one-tenth of a musician’s streaming audience is made up of true fans, then engaging with that portion on Twitch, which can monetise them ten times better, means an artist will generate the same income from a few superfans on Twitch than they do from many on streaming platforms.”

Streaming revenue continues to be a contentious subject, with artists and independent labels openly criticising DSPs for low payouts to creators. Much of that criticism has been directed at Spotify. In March, in-person protests were held globally at 31 of Spotify’s offices, with protesters calling for higher streaming payouts and more transparent business practices. Spotify responded by launching its Loud and Clear campaign, which attempted to explain the economics of streaming and the company’s stance on the matter.

Read Twitch’s Rockonomics report here.