Re:Flattr is closing down
by jmyeet on Thursday January 18, 2024 @08:08AM
(#39041210)
Twitch did successfully push a subscription model for creators that allowed a lot of small creators to make an income. For anyone unfamiliar, Twitch subscriptions are $5-25/month (viewer's choice) and give access to emote, subscription badges in the chat and, perhaps most importantly, give you an ad free experience with that creator.
One cannot understate how important Amazon Prime (as Twitch Prime) is to the Twitch subscription ecosystem. IIRC roughly half of all Twitch subscriptions are Twitch Prime.
Twitch is aupser aggressive with ads. Youtube has skippable pre-roll ads. Twitch does not and might have 4+ pre-roll ads plus in-stream ads every 30-60 minutes. The ad density Twitch aims for is 4+ minutes per hour. But Twitch doesn't like the subscription model anymore. They've cut the revenue split. Previously many creators got a 70/30% split, now almost everyone gets a 50/50% split.
The big problem is that ad revenue scales in a way that subscriptions don't. Ad CPMs can go up, you can increase ad desnity easily (to a point) and ad revenue scales with view count in a way that subscriptions don't (eg a creator with 100K concurrent viewers won't have 100 times the subscriptions of someone with 1000 CVC).
You're seeing the same trend with streaming services. Netflix killed their basic tier and wants you to watch ads because it's more profitable than the subscription. Prime Video has thinly veiled a price hike by adding an extra ad-free monthly fee.
My point is that subscriptions, or any form of voluntary payment, is icnredibly hard to make work and even the most successful examples, like Twtich, require great effort and a supporting ecosystem like Amazon Prime.
One cannot understate how important Amazon Prime (as Twitch Prime) is to the Twitch subscription ecosystem. IIRC roughly half of all Twitch subscriptions are Twitch Prime.
Twitch is aupser aggressive with ads. Youtube has skippable pre-roll ads. Twitch does not and might have 4+ pre-roll ads plus in-stream ads every 30-60 minutes. The ad density Twitch aims for is 4+ minutes per hour. But Twitch doesn't like the subscription model anymore. They've cut the revenue split. Previously many creators got a 70/30% split, now almost everyone gets a 50/50% split.
The big problem is that ad revenue scales in a way that subscriptions don't. Ad CPMs can go up, you can increase ad desnity easily (to a point) and ad revenue scales with view count in a way that subscriptions don't (eg a creator with 100K concurrent viewers won't have 100 times the subscriptions of someone with 1000 CVC).
You're seeing the same trend with streaming services. Netflix killed their basic tier and wants you to watch ads because it's more profitable than the subscription. Prime Video has thinly veiled a price hike by adding an extra ad-free monthly fee.
My point is that subscriptions, or any form of voluntary payment, is icnredibly hard to make work and even the most successful examples, like Twtich, require great effort and a supporting ecosystem like Amazon Prime.