It’s free to watch your favorite Twitch streamers but millions of dollars are donated to content creators every day. Why?
Why do people donate to Twitch streamers?
People donate to Twitch streamers because they appreciate the time and effort required to create entertaining content and because they want recognition and inclusion.
Streamers’ gamification of content and Twitch’s introduction of Bits also encourage users to spend money on their favorite creators. This isn’t unique to Twitch either, you’ll see the same dynamics across new streaming platforms like Twitch as well as at established competitors.
I’ll explore each of these factors in more detail below and also take a look at one slightly more ‘illegal’ reason why people donate to Twitch streamers!
Appreciation
A key reason why people donate to Twitch streamers is simply that they feel like the entertainment is worth paying for.
A 2018 study found this to be a primary reason for donations for many Twitch users who wanted to show their appreciation because it was necessary (to support the continued creation of entertaining content) and because it was worthwhile (“I pay more for cable TV and don’t get near the enjoyment”).
Although it doesn’t cost much money to stream on Twitch (a smartphone is practically all you need), many full-time streamers invest significant sums in their setup and content creation – which does not go unnoticed by viewers.
Viewers who are motivated mostly by the appreciation of time and effort put in and an obligation to support content creation may also be the biggest spenders on Twitch.
It’s not uncommon to see this model in other spaces, for example in the music industry where artists including Radiohead have experimented with pay-what-you-want pricing for their albums.
Recognition
Recognition is another driver of donations on Twitch. In 2019, for example, Twitter rolled out a feature that rewarded donations with exclusive emotes (which can be customized by streamers).
Some streamers also have permanent functions in their streams that are designed to encourage donations by leveraging viewers’ desire for recognition. In this way, the most successful streamers can make donations as reliable a source of income as Twitch ads.
For example, a donation of $10 might trigger an animation and a donation of $50 might trigger a personal shoutout. This way, the donor knows they are certain to receive something for their donation.
Viewers’ desire for recognition can go too far, as was the case with one streamer who donated $3,000 to Amouranth only to then complain that they felt scammed because they had been led to believe she was single.
Asmongold, cofounder of One True King (a media company formed by a group of Twitch streamers based in Texas) and one of the most high-profile content creators on the platform, didn’t pull any punches in his analysis of this event:
Unwanted backseating on Twitch is another example of an activity that I think happens because of a desire for recognition.
Inclusion
Many Twitch viewers donate because, in doing so, they feel they have become part of the ‘community’ of viewers supporting that content creator.
Studies have demonstrated that users donate in return for social interaction and a sense of community, with this paper finding that the social engagement motivation is particularly strong among viewers who prefer watching smaller streams (<500 viewers).
Community creation on Twitch can also have a snowball effect whereby the development of these bonds can also result in viewers imitating the behaviors of others. In other words, when some members of the community donate, it encourages others to do so.
Gamification
In addition to ‘push’ factors (i.e. viewers’ intrinsic motivations that encourage them to donate), there are also ‘pull’ factors employed by content creators and Twitch itself that influence donation decisions.
Streamers, for example, can encourage more people to donate through gimmicks and the gamification of their content.
It’s easy to understand why they do it – after all, donations can make up a significant chunk of income for streamers given the revenue shares offered by Twitch are lower than on competitor platforms.
One common gamification gimmick is the marathon stream, where a streamer will stream for 12 or even 24 hours in a single session.
These types of streams can be promised to viewers once a certain goal is reached (e.g. “I’ll do a marathon stream at 1000 subs!” or “I’ll stream an emulator with your choice of retro game once I’ve received $500 in donations!”) to incentivize them to help the streamer achieve that goal.
Another gamification strategy used by many streamers to encourage donations is competitions. A 2019 study on monetization and gamification methods used by Twitch streamers labeled competitions “highly effective” and highlighted ‘top donor’ events (where viewers compete against one another to give more money to that broadcaster than anyone else during a given time period) as particularly powerful.
There are plenty of people out there with more money than sense and plenty of streamers ready to mine that seam.
Twitch’s platform capture
Another ‘pull’ factor is Twitch’s own work to structure its product in a way that maximizes donations. One good example is its introduction in 2016 of a first-party donations system, Twitch Bits, which made donations significantly more convenient.
This is a form of ‘platform capture’ – Twitch created a first-party version of an existing feature (donations) and gave itself an unfair competitive advantage against other feature providers (driving interest by giving Bits enhanced visibility in the Twitch UI).
Twitch streamers interviewed by researchers from the University of Alberta, Canada, and the University of Oxford reported that donations “overall went up” after Twitch introduced Bits as “it’s definitely a lot easier” than having to use a separate payments service to donate.
While the 30% cut taken by Twitter meant Bits weren’t exactly a slam dunk with creators to begin with, the evidence does suggest that they encourage more people to donate.
Money laundering
As with basically anything that involves financial transactions in this world, there are always unscrupulous individuals and networks doing all they can to scam, cheat, and game the system.
Twitch is no different. In 2022 it was revealed that Turkish authorities had carried out an operation against 44 suspects in connection with alleged money laundering activities on Twitch.
The action was taken following the well-publicized Twitch hack that occurred in the Fall of 2021. While most news sources focused on the big-name streamers whose Twitch earnings had been exposed, some prominent Turkish streamers highlighted the unusually high payouts (thousands of dollars per day) being earned by numerous small Turkish streamers despite them having low viewership.
It is suspected that scammers were using stolen credit cards to donate Bits to streamers, who could redeem these for real money to return to the scammers (minus the streamer’s cut, of course).
Kotaku reported on the news as early as November 2021, including a source that claimed almost $10m had been laundered through 2,400 Turkish streamers in the two years prior.
Why do people donate to Twitch streamers? (Summary)
The main reasons people donate to Twitch streamers are:
- Appreciation
- Recognition
- Inclusion
- Gamification
- Simplicity
