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twitch just had one of the worst weeks I've ever seen for a platform. Really, really bad. It's tough to have a bad week and be a platform where creators are just live all the time reacting to how bad everything is going. If you're unfamiliar with it, that's what we're gonna talk about. We're live from the house that's burning down. So we're gonna talk about today on the pod. Talk about creators, reactions are reactions to the news and talk about the question of, is this the beginning of the end of twitch? Now, this is also something that we covered in our newsletter, the published press. I talked about this quite a bit. If you guys haven't subscribed to the published press and into the greater economy, I definitely think you love the published press.

You get it three times a week in your inbox and we break down the latest news in the creator economy and give our perspective on why it matters. So, go to the published press dot com, subscribe and you will get emails, emails, calling emails, emails. Was that did I sell it well or? No, no, you did. But then I got lost with the email. Are you angry about the fact that their emails? Are you happy about it about it? Just subscribe to the press and we will get in and we will give you email, give you emails.

All right, let's get into the show. All right, let's talk about twitch. I'd rather not. Well, we're gonna talk about twitch right now and I'm so surprised. No one's called this a twitch twitch elation, you know, Oh wow, what a crazy twitch elation. This is that Okay? All right. So this week has been a really wild week for twitch. Actually, it's been an interesting week across all platforms specifically twitch and YouTube.

But Twitch had a really tough week and it actually started on a bit of a high, it's a situation where twitch ended up banning gambling on the website. Now, if you're unfamiliar with this, like I don't, I just call it a website, I don't know, man, 1995, do you like websites? Hold on my moto needs dialogue. So gambling on twitch became very popular. And the first time that I came across, it was earlier this year, steak dot com, which is a crypto gambling website partnered with drake and they had a steak vs.

Drake where he played against the house and massive amounts of money were wagered in these live streams and they were done on twitch. And that then felt like it started to influence, you know, not only the viewers, but also other creators to start gambling live on twitch. Corinna kopf became sponsored by ST dot com. Um, this became a huge business where people were getting large sums of money and then in turn, you'd have to assume that the viewers, the millions and millions of viewers of these live streams. We're starting to gamble on the websites as well. That was obviously the point. It's advertising for gambling. And then, you know, more recently,

popular streamer named slicker Stream to put a video out where he talked about how he had a gambling addiction and how he's actually scammed a lot of people out of money on twitch and we find out that it was hasan piker, it was Ludwig, like there are very popular streamers who were actually scammed by slicker and it starts trending on twitter and all of these streamers come out against gambling on twitch, right? And and actually it happened in like a very short window, there was a ton of pressure from creators like poke main hasan piker, like everyone was like let's get gambling banned on twitch and there was a huge win at the start of the week where twitch did, they said we're gonna, we're gonna ban these websites like steak dot com, rou bet um these websites that do you know, roulette dice, all types of gambling, they said you're not allowed to be on our platform and you're also not allowed to advertise on our platform. They did say that sports gambling would remain right, but that's completely fine, I don't know,

but I think the other, I don't know, whatever it is, basically, top creators came together to clean up the platform because it wasn't just that a top streamer came out and said that he was addicted to gambling. There were a lot of people coming forth saying that they had, you know generated gambling addiction problems because of all of the gambling that was taking place on twitch. And I'd have to also assume when it came to the gambling that the companies were giving the creators the money to gamble, they weren't even gambling their own money, Right? And so it's, it's actually also creating an unrealistic portrayal of the stakes of gambling, right? So like if drake is wagering $60 million with steak dot com, it's likely that stakes giving him that money to gamble, you know,

and so like, it's, it's an unrealistic portrayal of what's at stake when you get into gambling, it's your own money that that gets at stake. So I think like this was the right thing for twitch to do in my opinion. And it was a communication win creators rally together said they wanted to ban gambling, twitch responds, People are excited, creators are excited that the platform is listening to them. Yeah, they actually, I think Pokemon said like this is what happens when creators band together and you know, we can make something happen. But then an announcement comes from twitch from the president that twitch actually is changing how they're going to be monetizing. Now, twitch creators primarily make money off of subscriptions,

meaning that audiences pay money to subscribe. So typically it's like five bucks a month that they pay to Subscribe every month to a creator. So that is like making money on twitch is you get to actually the audience is paying you and they're paying you on a recurring basis every single month. So when that, you know, expands and you have 50,000 fans, that's a really big deal right now. For the most part, More recently, creators who are on twitch take 50% of that subscription revenue, 50% goes to twitch. But what ends up coming out in the announcement is that there was actually a lot of special treatment and top creators were taking home 70% Twitch was taking 30. And in this announcement, the president of Twitch says that now we will be moving to a uniform, 5050 split across all creators. So for top creators who make up the majority of the revenue and viewership on twitch,

they now learned that they're getting a huge pay cut, like a 20% pay cut. And I'm sure there's even other variations of this split, you know, that that existed, maybe there was an 80 20 split, maybe there was 75 right? Like there's different types of splits that probably existed that were negotiated for top creators. So let's play this out, you're making 100 grand a month And you know, you're traditionally taking home 70% of that. And you know, that means you get $70,000 a month and that's huge, that gets cut down to 50, you now are taking home $50,000 a month. Now,

of course, that sounds like champagne problems for, you know, top create. But if you have overhead attached to that, you built a business, you hired editors, you have a studio, you have, you know, different things that you're paying for a lifestyle. You're paying for business, you're paying for. That's a really significant cut $20,000 a month that is out the door in that scenario and back to twitch super significant for creators. And what they've told creators is that creators who have that 70 30 split, which is very favorable.

They will retain that split for the next $100,000 once this goes in, but then it will go back to 50 50. Right? So no matter what basically twitch is trying to move in a direction where the split on subscribers is 50 50. And the problem here is that create whenever a platform changes something and this came up in the Youtube announcement to with the Youtube changing their monetization or how their monetization works on shorts. Whenever a platform changes how they're monetizing the impact on creators, especially creators today is, is significant because creators are building businesses. So that means creators have expenses. So when we have expenses that are tied up to this and you change how we make money, it's really significant. And I think, um, you know what twitch is clearly trying to do here is a, you know, make more money,

There's something about their business model that's not working and they need to make more money making more uniform, but they also bumped the revenue share on ads to 55%. Clearly what they're doing is incentivizing creators to run ads. They're saying now you make more money when an ad plays from percentage perspective, you make more of a percentage of the revenue when an ad plays than when a subscriber subscribes to you. That feels backwards to me, a subscriber subscribing to you, putting their money into your channel. That feels like a really significant thing that the creator did to make that person want to subscribe. And now they make less of a, of a revenue share than when an ad plays and they don't really have much to do with the ad playing. I agree that that is backwards. I do think that these platforms should give uniform rules and shares and splits across all of their creators. It's just a really tough look for twitch that they're reducing the amount for the most part, even though it's going up on the ad side, it's a really tough look that,

you know, in an effort to make it uniform, they are actually reducing the amount of money for a lot of the top creators are making right, like Ludwig made a great video about this who we had on the show and he's a top streamer who has moved over to Youtube and you know, he said, make everyone 70 30 figure out a way in your business to to go to make it a positive headline rather than an apology type of headline. I totally agree with that. And I think, you know, Youtube is 70 30 on channel memberships on, you know, like when the fans are funding the channel or paying, like it's 70 30 more money goes to, the more money goes to the creator. Um, and so you just,

you just basically said, go to Youtube, you know, and maybe twitches really confident that their live streaming tech is better than Youtube, which Ludwig talks about as well, and that and he talked about that in, in his interview with Susan Wojcicki as well, but like the concept that they went down is really significant. And again, I think when we talk about this with Youtube with twitch, the problem maybe isn't necessarily the economics of the platform. The problem is the communication to creators, you know, if that's what they need to do, that's what they need to do, but they shouldn't have had,

they shouldn't have had special treatment for certain creators. They should have known that at some point a day would come where they might want it to be uniform and they should have thought about that a little bit and like how it comes across to creators because it comes across that you don't care comes across that you don't care. You don't empathize with creators, but I also think it's difficult for creators to understand because every time one of these things happens, it feels like it comes out of the blue and it reinforces to you that you are building something on rented land, right? You feel like this is just about the connection of you and your audience and it's not, there's this huge intermediary that has to cover their costs and make decisions for people who hold stock right? Like investors in the company, there's so much more at play than just you and your audience and anything actually can happen no matter how stable you feel on any platform. Yeah. To be 100% clear if you are a creator and you make your money on twitch youtube instagram, tiktok Snapchat, you are not stable and that's, that's like an honest thing like that reality that exists today might change. However your business works.

The whole thing might change. It's kind of a wild thing to think about, right and it's unlikely, You know, but I can't say with certainty that what you're doing is 100% stable. I mean, we're building a business on YouTube because we are putting faith in the decisions that youtube will make right, that we will trust them when they add shorts as an option, that we will trust them when they decide to monetize it in a certain way, that will trust that they will fix it for the better and not make decisions that will hurt us. But that may not always be the case and every creator is different, so certain decisions will affect creators differently. Yeah. And I think the thing to remember is like we're also utilizing these platforms and were able to build audiences right? Like Youtube is a big deal because of discovery bility and search. We are able to play into their search algorithm to build an audience.

That is how we have built an audience now, what we do with that audience, the majority of our money comes off platform, meaning it's showcases on here, but what you're, how we're making our money is through brand sponsorships. Now, the brand sponsorships are there because of the audience we built on Youtube, but a brand sponsorship that we got let's say someone pays us $25,000 $0 goes to YouTube, right? That's how, that's how brand sponsorship work. Youtube is not asking us for any of that money. We play the brand sponsorship in a Youtube video, we built the audience on Youtube. It's because of Youtube that we could get that business.

Yeah, they're not, we're not giving them any of those dollars. So creators who sell merch, creators who sell courses off Youtube, none of that, but the audience is built on on Youtube. So I just, I want to offer the inverse perspective platform to creator where it's like the revenue share is a big part of how the creator economy works, but it's not the only part of how the creator economy works and definitely not the only part of how creators make money on these platforms. So we're making a lot of money outside of the bounds of what youtube or any other platform can take a percentage of. So the percentage that they are taking. Like for me, sometimes I look at it and I give this advice to a lot of creators like build a business where adsense or you know, which ads are not a factor in what you do because those could change, Everything could change.

And I don't know, maybe that's maybe that's a controversial opinion because a lot of creators build their businesses based on adsense or the money that they get from the platform. I just think it's a, it's a scary thing to do because anything can happen, Anything can change. I also think there's trade offs to every platform. This may cause a lot of people to leave twitch and start streaming on youtube. But if you listen to again to Ludwig talk to Susan Wojcicki, the ceo of Youtube about streaming on Youtube, it's not perfect yet. Right. He brings up the fact that, you know, consumer behavior on youtube is to watch shorter videos and the competition is right there on youtube. It's not as uh, you know,

on twitch twitch mainly does one thing, like it's really good at streaming. So audiences show up ready to sit for six hours on youtube, you're fighting against short form content now, you're fighting against 10 minute video essays, right? Like there's a, there's a draw to attention that you don't have on twitch. So again, it's not perfect, but as a creator you kind of have to weigh like what's the best option for me. So let's talk about options for these streamers. So my perspective on this is like a streamer right now is one of the most influential genres of creator, right? Streamers are one of the most influential genres of creators out there because audiences are spending six hours with them unedited and that level of intimacy is so powerful and that's why you're seeing that subscribers like a subscriber supported business, It can only exist if you have an extremely tight knit audience Ludwig's podcast Wanna bring this up is the podcast that he runs called the yard on Patreon makes almost $200,000 a month.

That only happens in a world where audience, the audience is so intimately connected to the creator that they're willing to take out their credit card and pay and that subscriber supported business. I think that if I'm twitch like the reality is you can probably move those subscribers somewhere else. I mean we see it on that, that example right there, that's like that's Patreon, I mean like even said, you don't grow on twitch, you grow on other platforms and then bring them to twitch, but you bring them to twitch because the livestream, you know, software is better essentially like your live streaming is a better experience on twitch, A lot of creators have said that the culture is better, the culture is better. And because of the subscriber model, essentially the network effect of subscribers meaning my credit card information is already in twitch.

It's very easy for me to subscribe to Ludwig and then go subscribe to X. Q. C and then subscribe to Hassan and then subscribe to carina, cough because my credit card information is already there and I can discover other creators on the same platform layer on top of that twitch prime subscriptions where if you have an amazon prime subscription, they allot you for 99 a month basically as a gift out of your twitter out of your amazon prime subscription to become a subscriber of a twitch channel every month. Right? So that's like, I think Ludwig called it like free money subsidizing which creators, youtube doesn't have a version of that. No Youtube doesn't have like five google dollars to spend with us, right, google books, google bucks, google bucks. Yeah, we'll go with google google box.

Um, so that's, that's a really substantial reason why people are going to twitch, but I think again as twitch is a platform, you have to recognize these creators have built this intimate relationship with their audience that if they do decide, hey, you know what the top creators, I'm done here. I'm gonna go over to Youtube or I'm gonna go over to Patreon and do my live streams, they're like, yes, it hurts their discover ability, but if you've already built an audience at this point, you can take your business elsewhere. But according to a lot of twitch streamers, there's already not great discover ability on twitch.

Right? So what's really the difference, what's the incentive of being on twitch right now? Just a culture of twitch, you know, like what, what is it? Because it feels like right now with this move, youtube has a better revenue share. A lot of like twitch streamers are making their money on subs if you have an audience that will wait for you to go to the bathroom and continue watching? Most likely if you tell them, hey, I'm gonna be on Youtube now instead of twitch, they'll go or do do some of these streamers come together and build their own site, I don't know, you know,

even even like a pay walled site, there's tons of live streaming software out there now, you know, do they build a paywall site where it's paid 10 bucks a month and get this bundle or you know, can Ludwig actually just start his own thing or does youtube pick up for him in a, in a much more substantial way. That to me feels a little unlikely just because it's such a massive technical undertaking and a lot of these, top creators are getting exclusivity deals. Yeah. You know, that's true creators that make, I guess I'll call them normal videos just V. O. D videos on Youtube. They're not necessarily getting exclusivity deals to just post videos on Youtube. That's true.

Probably because youtube is not worried that they're gonna go to vimeo or twitter, There's nowhere else to really go. Yeah. What is streaming? Like streaming is like radio stations, like it's being a radio host. Streamers are getting deals which also are gamers, podcasts are getting deals right to the exclusive. It's all people who, who have intimacy because of extremely long format content, right? Like the people who are, who, who could be in subscriber based businesses are, I guess people like us, people have talk shows where like if you look at the top Patreon pages,

they're all podcasts typically and it's because of the intimacy you developed with the audience. So that, that's all to say that I think like twitch first of all, I think the timing is insane. Why would you go from having a huge win with banning gambling basically the order of events goes twitch has a huge win. They banned gambling. Their creators are happy twitch. Listen to us, we have a say in this platform the next day Youtube announces shorts monetization creators have mixed reviews, you know, Okay, I think that's pretty good. There's a bit of a communication thing. I don't know, you know, whatever,

it's kind of like neutral. I would say happy positive, a little bit of neutrality, then twitch comes extremely negative news. Why would they do that the next day? Why wouldn't they wait a week, two weeks? Why wouldn't they think about how they wanted to? Maybe they just have so much pressure. I mean, I don't know, I think it's it's just a communication mistake, but how do you message that again? Like it's gonna be bad news whenever it comes out. I think platforms need to work on how they communicate specifically to their creators. I find that a lot of platforms are communicating in this in broad strokes,

in the same way that they would communicate to the press and that's fine for the press, but it's not fine for creators. I think you need to host like a town hall because the reality is platform and creative relationships are almost like they're like small governments where us as creators are essentially paying tax right in some way to choose to be on the platform, we're able to make a living, but we're also paying some level of attacks and these people at the top are creating policy. So how do you now build that when both parties need each other and there's policies that are gonna really impact how the nation is able to make their living. How do you avoid blindsiding your community? I think it's like, I guess, I think there's some level of like a town hall type of thing where they can like if twitch can come forward and be like, here's our problem, you know? But I guess that's just opening up for chaos, but it's not a democracy. It's not a democracy. That's,

that's the thing to remember. It's like you join one of these platforms and start making money. You're not in a democracy, you're, you are fully renting from a landlord who can make any decision they want can continually change the lease. Yeah. And in in the example of twitch, they're owned by amazon and amazon may be looking at their twitch prime subscriptions and going, I don't think we want to subsidize this anymore. So get yourself to a place where we don't need to subsidize your twitch streamers, right? There's so many things that play, that's a big deal. So how does this move forward? Like where do, where,

what should creators, what should the twitch creators do? And then what should all creators learn from this? I think that's the important thing to talk first. I want to acknowledge that I am not a streamer. I have not, not, not, not, but we do have 502 followers on twitch Colin yes, Colin explicitly asked me not to say that, but I'm gonna say it just in case I don't want to give advice to twitch streamers necessarily about how to run their business or where to go, right, because like I don't have experience with that, that's what I'm witnessing is creators moving to Youtube and a lot of that is because they're getting exclusive deals to switch over. But what I am happy to see is that a lot of these twitch streamers formerly twitch streamers who are now on Youtube are very open and honest about the problems that youtube has as a streaming platform,

also honest about what they like about it. And I think that open communication, even Susan Wojcicki going on Ludwig, Ludwig show Ludwig's channel like and him being able to air his grievances, he gets to be a now public ambassador for what needs to be fixed and it does not seem like twitch has any culture, it's a good point. I mean, again, we spent spent last week at the Youtube creator summit with Youtube executives, they are very present in the lives of creators. Like you know what Susan Wojcicki, like how she speaks, she shows up on creator channels, she speaks to creators, there's a creator summit where you come together and maybe twitch has something similar, but like it doesn't seem like,

you know, Emmett shear came out and talked about this or even the President of twitch came out and talked about this or even look at adam mystery from instagram, right, who got slammed when he was coming out, making videos about how instagram is, you know entirely real now and photographers were angry that their photos weren't getting shown. He was not coming out having a real time discussion with someone who has a business based off instagram and was angry, right? He's just putting out a message like a politician. I think the right move from the platform is to actually be with creators and try to have the most honest actual conversation, not something that's scripted, totally agree with that. I think, um, when I look at the prospect of youtube for creators, I think the reality that it is multi format and moving in a direction where you look at a channel and you see shorts that are,

you know, 60 seconds, you can see a 10 minute video and a three hour live stream and they can all live on one channel. I think, yes, does that, you know, create this incredible amount of choice that create an audience member has to make. But also, I think there's different audiences for each of those. Like I'm personally not someone who would sit and watch a live stream, but I like watching Ludwig's clips. I also, some creators, I like watching their shorts. Right?

So like there's specific audience members for each of those formats. The fact that they can live in one place, I think is huge. And I do think we're gonna see a lot of these creators who already, all their clips already exist on Youtube. They have, I mean hasan piker and Ludwig and X you see and and all these people, they have massive audiences on youtube, you know, granted Ludwig is with youtube. But the creators who aren't they very much exist on youtube. I think the opportunity is to be on youtube and I think, you know, you shouldn't really, as you get to a certain level of a creator, you shouldn't really be just on one platform because of this when you start.

I do think you need to kind of go all in on one platform, but as you grow as you have more money as you can like hire more team. I think this exact thing is the reason why you need to be spread out across different platforms, you know, and I think you should make, I'm very pro Youtube, but I think you should make Youtube your central hub because they've been the most stable, you know, out of all of them, they're the best at communication, the best at creator empathy and right now they're the best at hosting multiple different formats on a single channel. I agree with that. I do think it's to be determined if everything can live in one home, can you actually be the best at everything just because even as Ludwig brought up again to Susan, like One of his concerns about streaming on YouTube is that viewer behavior on YouTube is to watch shorter videos, even if those videos are 20 minutes,

15 minutes, whatever it is like again twitch had that culture of sitting for three hours and it'll be interesting as shorts become a bigger part of YouTube. Can you really have a place where viewer behavior can be 15 seconds. It can be five minutes, 20 minutes or four hours. Yeah, I don't know what would you do in this situation? Like let's say you're in the twitch board room or I guess the, not the boardroom but the executive room, you're sitting in twitch. What do you do now? Like now creators are mad. You've already made this announcement. What do you do now? It feels to me like what happened was like what happens in the N. B.

A. When a team has a bunch of old players and the season doesn't go well. And so they let them all go and they bet on the future. I wonder if that's what's going to happen for twitch and that's the strategy they're gonna take like, OK, we're losing some of these top streamers. Youtube is going to take them. But what about what if we were to invest in the younger streamers right now and give them exclusivity deals, who know, nothing else but the 5050 deal that they were given and are like, yeah, I'm okay with that. I would say you have to catch twitch prime subs, you have to, you get rid of twitch prime subs and all of a sudden the culture is gone of like that's free money for these creators essentially. Yeah,

You, you cannot go back on your, what you just did. Like, they cannot go back and say, okay, are bad. We see. So I think that's really interesting. I hadn't thought about that of like a sports team where you're clearing out the veterans and saying we just gotta, we gotta rebuild now. You gotta rebuild on the young, like is their assumption that there's, there's such a big crop of aspiring creators that even if the top creators leave, they'll be okay. That's so interesting.

Maybe they're saying all right, we're gonna bet on gen z and what's next. Like we've like, it's all good, we've gotten what we, you know, what all we could get from, you know, these big streamers. Um, and the reality is if they leave it's okay. That's interesting. I hadn't thought about that. I think if I'm twitch and like I'm confident in this decision, I'd probably do a call or some type of in person with some of the top streamers as well as some up and coming ones and explain the perspective with more nuance that you can only do in a closed door scenario. I think closed door scenarios where you're bringing creators in with executive are incredibly important to the future of,

of, of all of these platforms because you want their voice heard and my experience with all the platforms is that anyone who's running a platform, let's say, youtube twitch instagram, they have little to no experience or understanding of what it's like to be a creator none right does which have a creator liaison, like Youtube, I don't know, but that person should probably be on phone calls and in the room with a bunch of twitch creators to learn and to explain to them the business problem that twitch is facing that made them do this. It's like the head of player relations for the sports league. You need that we, this is like, let's keep going on the sports thing because I do think this is kind of like, this is like an NFL situation where there's like an NFL players association, you've got your top players, top players who are part of that. Remember when we were younger,

it was Derek fisher, Derek fisher from the Lakers was like the rock for the players and he did all the negotiations for the players and maybe were pushing in the direction of like a union, like a players union, is there a creator's union that binds together? I think one of the biggest problems that happened was that twitch showed all the creators in the beginning of the week that they had a say over the platform, they wanted gambling, banned it, got banned and then they followed up by saying you have, you actually have no say remember where the platform, we're actually gonna hurt you, where it hurts the most we're gonna reduce your, your cut here. Um so they just did this thing where like the storytelling was really off, it was like, you have no say in what happens on this platform, but right before that you had to say.

So I think that was their, that was their problem. And I do think probably each platform should have a creator liaison or a creator association where the creators can meet and come forth to the platform and say this is, this is what we want as creators, we'll see the verdict is out. But I'm, I'm interested to see what happens. The thing I love about twitch creators is how vocal they are. Like, I feel like whenever something happens with twitch, I know so much about it because you, you can hear the whole story across all the creators their lives so often that they're the least filtered, least filtered, like Ludwig, even at the creator summit, like when he was on stage,

he's the most open honest, transparent, least filtered guy and I love that about him. Um I will say that, I think creators should really explore off platform revenue is something we're looking at. Two, right? Like what? How are you, when you get to a certain point, how are you able to build a business that exists outside of the bounds of the money that's made on the platform? That might mean an apparel business, Right? Can you, do you have a merchandise business that can, can actually spread and be successful beyond um you know,

the content, you have, something we're talking about and thinking about is of course business where people can take the courses and you know, yes, it's promoted through Youtube, but the money is transacted somewhere else. Like I do think the opportunity and the important thing to safeguard yourself against how platforms are gonna change is building businesses that are diversified and outside of the bounds of what the platform can, you know, control, you don't have control over the platform and that's not to say you need to build the next chamberlain coffee or Mr beast burger or anything. It's just with the current audience that you have are their products, services that are valuable to them even Patreon, right? Is it like to just head your bets across multiple different revenue streams and platforms? So don't just be a fully 100% ad supported business. Don't just be a sub supported business.

Don't just be in apparel business, like figure out a way to be across a few things as your audience grows. That's like the biggest piece of advice we'll see is this the mass exodus of twitch, we'll find out. I'd be curious to hear other thoughts again, Colin and I are not on twitch. So people who are streaming on twitch. What are you guys thinking about? Let us know, put it on reddit and uh,