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Why top streamers are leaving Twitch

(Washington Post illustration; Twitch)
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When top streamer Ben “DrLupo” Lupo bid farewell to Twitch last week, it was a shock. When Tim “TimTheTatman” Betar, an even bigger name, followed him to YouTube just a couple of days later, the streaming world reacted as though it had been turned on its head. However, Twitch letting two of its stars depart doesn’t mean the company is losing its stranglehold on the live-streaming industry. Instead, the departures from the platform are the result of intentional changes to the company’s approach to exclusive contracts with big streamers.

According to multiple former Twitch employees familiar with the company’s strategy, Twitch has started to offer big streamers less money for similar amounts of work or, in some cases, to not offer the sorts of contracts it used to at all. Several former Twitch staff and members of the streaming industry with knowledge of Twitch’s contract offers say that Lupo, in particular, got “lowballed” by Twitch, which made YouTube’s offer more tantalizing. The industry members and former Twitch staffers spoke to The Post under the condition of anonymity because they were not authorized to speak about these deals publicly. Lupo, Twitch and YouTube declined to comment on contract specifics.

The purported lower offer was relative to Lupo’s previous contract, which was negotiated two years ago, around the time that several major streamers — including mainstream darling Tyler “Ninja” Blevins and first-person-shooter mastermind Michael “Shroud” Grzesiek — left Twitch. Some went to YouTube Gaming and others Facebook Gaming, while Blevins and Grzesiek struck deals with the now-defunct Microsoft-owned live-streaming platform Mixer. This exodus incentivized Twitch to lock down its remaining stars with more attractive contracts.

But now the game has changed. When Blevins and Grzesiek moved to Mixer, their audiences underwent a marked downsizing. Mixer folded last year, and Blevins and Grzesiek both ultimately made their way back to Twitch. Where once it seemed like the live-streaming industry was on the verge of a sea change, Mixer’s bold salvo ended up just reinforcing the status quo. Not only that, it demonstrated that many viewers within Twitch’s ecosystem, when deprived of their favorite big streamers, will just find other Twitch streamers to take their place.

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By the end of 2020, Twitch accounted for over 65 percent of total live-streaming hours watched — compared to YouTube Gaming’s 23 percent and Facebook Gaming’s 11 percent — remaining the top dog by a wide margin. This is an especially impressive feat considering YouTube and Facebook are, in terms of sheer user numbers, vastly larger than Twitch. The former two sites boast userbases of nearly 3 billion and 2 billion respectively, while Twitch is visited by roughly 140 million unique users per month. (Twitch is owned by Amazon, whose founder, Jeff Bezos, owns The Washington Post.)

Now Twitch is bargaining from a place of confidence. That allows it to reevaluate previous deals made when streamers had more leverage.

The change has a lot to do with how Twitch is structured. Streamers have several options when it comes to making money: paid subscriptions and donations from viewers; deals with brands; and advertisements that function similarly to those that play before and during YouTube videos. Twitch, like most modern platforms, does its best business on ads. Streamers, however, do not like playing ads because they interrupt their broadcasts, increasing the odds that viewers will leave or miss a big moment. In part because of this misalignment of goals, Twitch tends to sign big streamers to pump up its brand — not to directly generate revenue.

“The public has a very uninformed perspective on Twitch’s economics,” one former Twitch employee said. “Anytime [a streamer’s] been paid a ton, it’s been a lot more about brand than [the company’s return on investment]. The commerce business on big channels tends to flatline at some point, and streamers don’t want to play ads — when that’s Twitch’s big upside potential.”

Twitch structures contracts to somewhat account for this. Instead of paying a lump sum when streamers sign on, many contracts also include guarantees that pay streamers additional money as they approach set minimums of time broadcast and ads run. But this has not reliably ensured that streamers actually hit their minimum requirements. In cases like Lupo’s, people familiar with Twitch contracts said, Twitch is now seeking to reduce the amount streamers get paid for adhering to their contracts. And that’s when it offers these sorts of exclusive contracts at all.

Ryan Morrison, an attorney who runs Evolved, a talent agency that represents Twitch streamers like Félix “xQc” Lengyel, confirmed that Twitch is offering fewer exclusive contracts worth less money. “And outside of [North America], it’s just about none at all — at least in my experience,” he added. “That is not to say there are not some very lucrative and amazing deals coming down the pipes still, but it’s not where it once was.”

Star streamers like “World of Warcraft” and “Final Fantasy XIV” kingpin Asmongold (who has not publicized his real name) have also recently talked about how Twitch has declined to offer contracts.

“My understanding,” Asmongold said of his own lack of a contract during a stream last week, “is Twitch didn’t like that I went really hard on them in regards to the ads last year, specifically forced mid-roll ads.”

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One industry member said that in their experience, some Twitch staff explicitly cite the previous round of streamer departures in their current decision-making. “The streaming wars are over,” they claimed a Twitch staffer said to them. “We won.” However, they also noted that Twitch is a company with many different teams that don’t always align, and others don’t agree with that stance.

Lupo’s situation is a case study in all of this. A devoted charity streamer who regularly advocated for diverse causes, he was an ideal extension of Twitch’s brand. But, as he told The Washington Post previously, he also wants to spend more time with his family after years of keeping up a grueling streaming schedule.

Twitch’s new terms put Lupo in a difficult spot: He would have needed to stream a comparable amount to what he’d been doing before but for less money. YouTube, on the other hand, made him an offer that he said would allow him to stream less while still ensuring he’d be “secure for life.” That’s the offer he ended up taking.

Last week, the other departing Twitch star, Betar, told Business Insider that similar priorities factored into his decision to move to YouTube. “The reality is,” he said, “now that I’ve got my wife and my son, it’s hard for me to stream as much as I did beforehand.”

Devin Nash, chief marketing officer of content creator-focused talent agency Novo, pointed out that YouTube’s contracts start at 100 hours of streaming time per month while Twitch’s start at 200.

“That right there gives you a reason people might be considering something like this,” said Nash, noting that he’s especially interested in how other older, more tenured streamers might alter their own career trajectories in the wake of Lupo’s and Betar’s YouTube deals.

Ryan Wyatt, head of YouTube Gaming, said that allowing streamers to have a better work-life balance is a big priority for him.

“I think stream grind is a real thing,” he said. “I think stream burnout is a real thing. I am not trying to bring people over here to stream 150 to 200 hours a month. I don’t think that’s healthy. It’s not what we’re trying to create at YouTube.”

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