Twitch's new Ad rules spark outrage among streamers, threaten revenue streams - Hindustan Times

Twitch's new Ad rules spark outrage among streamers, threaten revenue streams

Jun 07, 2023 05:00 PM IST

Discover the latest changes in Twitch's advertising rules and their impact on streamers' revenue streams.

On June 6, Twitch, the giant streaming service, implemented a series of new advertising rules that are causing concern among streamers of all sizes. These rules specifically pertain to branded content incorporated into streams, which is a vital source of income for creators.

FILE PHOTO: A twitch sign-in screen is seen at the offices of Twitch Interactive Inc, a social video platform and gaming community owned by Amazon, in San Francisco, California, U.S., March 6, 2017. REUTERS/Elijah Nouvelage/File Photo(REUTERS)
FILE PHOTO: A twitch sign-in screen is seen at the offices of Twitch Interactive Inc, a social video platform and gaming community owned by Amazon, in San Francisco, California, U.S., March 6, 2017. REUTERS/Elijah Nouvelage/File Photo(REUTERS)

The introduction of these rules has the potential to have significant implications for your favourite streamers.

Following the announcement, streamers took to platforms like Twitter and Twitch itself to express their dissatisfaction with the changes.

Prominent streaming figures such as Asmongold even went as far as threatening to leave Twitch altogether. This moment could prove to be a pivotal juncture in the relationship between the streaming site and its creators, who undeniably play a fundamental role in its success.

But what exactly did Twitch announce, and what are the implications of these changes?

What exactly are Twitch’s recent ad changes

These recent changes in Twitch guidelines include restrictions such as limiting on-screen logos to three percent of the screen size and prohibiting burned-in video, display, and audio ads.

‘Burned-in’ ads refer to pre-recorded commercials embedded directly into the stream using software like OBS and Xsplit, as outlined in Twitch's detailed update on their help page.

Branded content serves as a significant income stream for streamers, especially after the controversial 50/50 revenue split in September 2022, which left many feeling exploited by the Amazon-owned company. Partnerships with gaming-focused soft drinks or peripheral companies allow streamers to manually incorporate banners into their streams, with the earnings going directly to them instead of being divided equally like revenue from Twitch ads.

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Theo Browne, CEO of Ping Labs and a former Twitch employee, expressed his concerns, particularly for prominent creators. He stated, "The big creators are the ones who get f***ed by this almost exclusively. And that’s what’s scary—the top 100 streamers on Twitch just got told they’re not allowed to make 80 percent of their revenue the way they’re used to making it. This is gonna have repercussions."

In a sarcastic tone, one streamer pointed out that while the new ad rules allow for branded products to be placed in the background of streams, streamers might resort to cluttering their setups with random items. Plus, it's not only popular streamers who are affected by these changes; major events like The Game Awards and The Streamer Awards, which occasionally use Twitch to livestream ceremonies, are also impacted.

"Events are f***ed—the only way to make money off of viewers on Twitch is to stream six days a week, you need to be streaming constantly for like 60-plus hours a week... if you’re an event that streams once every three months or once a year, that model doesn’t work," explained Browne. "You need sponsors to make money... the events are only viable because of sponsors' money. And those sponsors expect to have pretty prominent placement in that content in order to make it work. These are deals that streamers and creators have been building off-platform because it’s the only way to make enough money to justify these types of content."

The Impact on Twitch’s charity stream

The introduction of Twitch's new ad rules is also raising significant concerns within the realm of charity streams hosted on the platform. The recent success of events like Awesome Games Done Quick, which raised an impressive $2.6 million for the Prevent Cancer Foundation, highlights the potential impact of these rules on charity streamers and their fundraising efforts.

Alyssa Sweetman, former head of Twitch's charity division, expressed her concerns about the rules' implications for charities to Kotaku.

“For charities, they often share resources that help creators communicate their message effectively…in theory this could prevent creators from showcasing videos about the nonprofit which are technically advertisements, or banners with information about the charity that highlight additional information,” She expressed. “For me, since I advise nonprofits…I’m just looking for clarity to ensure that I’m not encouraging any nonprofit to do something that put them or the creators they collaborate with in hot water.”

Online outrages

Twitch’s respond

Following the plethora of backlash from the online community, Twitch attempted to address the concerns by releasing a series of tweets to clarify its branded content policy. But, the clarification provided by the company was deemed insufficient by streamers, who continue to express their frustration and anger.

According to Theo Browne, Twitch had technically prohibited "burned-in" videos in the past but hadn't actively enforced the rule. Browne noted that some platforms even offered embedding ad players directly into streams for monetary gain. While Twitch's intention was to clearly ban such practices, the tweet thread released on the afternoon of June 6 did not indicate a reversal of the decision to limit the size of branded content logos.

In their tweet thread, Twitch stated that they did not intend to restrict streamers' ability to establish direct relationships with sponsors, acknowledging the importance of sponsorships in streamers' revenue streams. However, it remained uncertain whether the ban on logos would remain in place, as Twitch pledged to "rewrite the guidelines to be clearer."

Browne offered his perspective on the situation, suggesting, “We do not intend to limit streamers’ ability to enter into direct relationships with sponsors, and we understand that this is an important part of how streamers earn revenue.”

CEO of Ping Lab speculated that while there might be external pressures or legal reasons behind the changes, the lack of adequate research or effort on Twitch's part has directly harmed creators and negatively impacted their perception of the platform.

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