(Source: Twitch)

Your Wed June 29 eSports News

TWITCH LAUNCHES CHEERING FOR STREAMER MONETIZATION

My Take: Two weeks ago in ESPORTS WEEKLY #10 I covered “The War on Twitch” and was intrigued by the non-advertising monetization options that Twitch wasn’t capturing. TwitchAlerts had the donation side and a new startup Revlo had an interesting offering:

This week Twitch launched Cheering (I so badly wanted to use this picture ) to capture some of this market. Cheering is basically another form of donation as the announcement said — I’ll let you debate the definition of “donation” and “support”. Here’s how it works:

(Source: Twitch)

You Buy Bits from Twitch

You “give” these Bits to the streamer you’re watching via Twitch chat

Before we get to the monetization part, from a pure integration perspective and look; Cheering and Bits is pretty cool. Super easy to use — although I haven’t tested how easy it is to reload once you’ve run out. A lot of people underestimate the engagement vehicle that Twitch provides and in particular; Twitch chat where you have a direct connection with your audience (Isn’t that what every brand wants? Hint. Hint.)

Now for the money. At the lowest purchase price without a discount, Twitch is charging a 29% Fee for Cheering to streamers:

(Source: eSports Daily)

But you need to consider this from the Streamer’s POV. There was a great analysis done last year on how Twitch streamers make money but it basically boils down to this:

A large share of money is made via subscriptions — where Twitch takes a fee

Ad revenue is not the main driver and Twitch takes a fee — I’d also wager that overall video CPM’s will drop due to market inventory and Facebook/Google taking over the Digital Media universe

TwitchAlerts provides the Donation functionality to streamers already — which is completely Free

So introducing a third fee-charging feature while more tightly integrated into core Twitch functionality is still significantly higher than 0%. There was a pretty heated discussion on Reddit which was enough to warrant a follow-up from Twitch. Let’s see how this looks after a full roll out.

However — I think I have another option that could be FREE to Streamers and FUN for the audience:

Launch Custom Bits for Brands

Let Streamers/Brands give them away to their audience for Free

Audience donates the Brand Bits in the exact same manner and the streamer get’s paid on the same revenue share of $0.01 cent per Bit — but charge 0% Fee — as Twitch will already monetize on the Ad side

Fans Win. Streamers Win. Brands Win. Twitch Wins You’re Welcome.

[I haven’t run the numbers nor do I have access to Twitch’s internal revenue estimates on Cheering but more than likely Brands can’t fully support this — but I’d experiment]