Twitch Entices Video Creators With More Revenue Sharing

By Sarah E. Needleman Features Dow Jones Newswires

Amazon.com Inc.'s Twitch is allowing more broadcasters to make money on its platform, a move that could help the live-streaming business seize on challenges facing bigger rivals YouTube and Facebook Inc.

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On Friday, Twitch said it will open up its revenue-sharing program next week for more broadcasters to receive "bits" -- custom, animated emoticons that act as an online currency for viewers to tip them. Twitch says bits are a way for those in the broadcasters' channels to cheer them on.

Twitch will add more money-making opportunities to its new "affiliate program" in the future, the company said. Currently, only the top 1% of the 2.2 million people who stream on Twitch at least once a month -- members of its so-called "partner program" -- can generate revenue on the platform.

With the new initiative, Twitch aims to "encourage more people to broadcast and more fans to watch," said Ethan Evans, senior vice president of commerce and developer success.

Twitch's push to help line more broadcasters' pockets comes at a time when its bigger competitors are struggling.

YouTube, part of Google-parent Alphabet Inc., has lost potentially hundreds of millions of dollars in advertising this year, which its content creators get a cut of, as brands boycotted the site for placing its ads next to inappropriate videos. Its biggest star creator, 27 year-old Felix Kjellberg, who goes by PewDiePie, recently started a weekly show on Twitch, his first outside of YouTube. (Mr. Kjellberg isn't currently part of Twitch's partner program, which would allow him to earn money, the company said.)

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Meanwhile, many publishers have struggled to generate revenue from Facebook video ads. Last year, the social network paid tens of millions of dollars to internet stars and media companies to use its live-video feature, which has been overshadowed by violent incidents, such as when a Cleveland man posted a video of a murder on the site last week.

Amazon bought Twitch in 2014 for $970 million. Among the top 500 most visited sites in the U.S. in March, Twitch ranked No. 7 by average time spent per visitor, up from No. 18 a year earlier, according to comScore. Facebook in March ranked at No. 2. ComScore said all websites from Alphabet rank collectively at No. 3. If it were to break out YouTube by itself, the video site would rank at No. 5, it said.

On Facebook and YouTube, broadcasters mainly make money through advertising. Twitch also has an advertising program, and its top broadcasters have access to a variety of other moneymaking tools, including a portion of subscription sales to their channels. Last month, Twitch began selling digitally delivered computer videogames, a move that gives its top broadcasters another way to generate revenue.

Twitch said its top earners in the partner program, who are its most popular broadcasters, make more than $100,000 a year. Under the new affiliate program, creators with fewer fans must meet certain criteria to demonstrate their commitment to streaming, such as a minimum number of hours spent on the air, to earn revenue. The amount of money the platform shares with its broadcasters varies depending on how it is earned.

Twitch sells bits to viewers in bundles ranging from $1.40 for 100 to $308 for 25,000. Broadcasters then earn one cent every time a viewer uses one.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

(END) Dow Jones Newswires

April 21, 2017 12:34 ET (16:34 GMT)