Why is Twitch losing streamers?

Are Twitch’s competitors really making a dent in its market share? And does it have itself to blame?

Twitch’s rollercoaster start to the 2020s

Yes, Twitch is losing streamers. During January 2023, there were an average of just over 91,000 channels live at any given time: that’s 13% down on the same month last year, (which itself was 12% down on the 2021 figure). 

Twitch is losing viewers, too. The average number of concurrent live viewers for January 2023 was down almost 15% down year-on-year, having remained almost exactly level from 2021 to 2022. 

So, does this spell curtains for the market-leading interactive live-streaming service? 

Well, not really. You shouldn’t always trust data when it’s delivered to you without sufficient context. 

The figures I presented above (sourced from TwitchTracker) paint a very different picture when you go back one more year to January 2020. 

A global force majeure

Readers will recall a certain extraordinary factor that influenced behavior patterns on a global scale starting around springtime in 2020: the COVID-19 pandemic. 

It’s no surprise that Twitch experienced hockey-stick growth as sweeping restrictions prohibiting in-person interactions were imposed on most of the world’s internet-connected population. 

The whole cluster built around live streaming – including services that help you find which games to stream on Twitch and shops selling video overlays – achieved similar growth. 

It is, after all, a product that mostly relies on content created and consumed by people sitting indoors in isolation from one another.

For some, live streaming on Twitch at this time was a chance to replace income lost from pandemic-affected jobs; for others, it provided an escape from the (often quite scary and depressing) daily reality. 

The number of both viewers and content creators on Twitch more than doubled in the 12 months after COVID-19 was first characterized as a pandemic by the World Health Organization on 11 March 2020

It’s also no surprise that this peak of streamers hasn’t been maintained since the world reopened and folk were allowed out of their bedrooms on a more regular basis. 

But Twitch can’t just point to this Force Majeure to explain why thousands fewer people create content on its platform now as compared to 12 or 24 months ago. 

There are a few other plausible explanations, too. 

For example, Twitch’s perceived slow response to a string of controversies during 2022 (including misogynistic hate raids on high-profile streamers, the proliferation of gambling streams, and the alleged offers of huge piles of Saudi Arabian sponsorship cash to some of the platform’s biggest names) all bruised the brand in 2022. 

But one of the most significant wounds suffered by Twitch – at least from the streamers’ perspective – was entirely self-inflicted.

Stepping on revenue share rakes

In September 2022 Twitch announced a major overhaul of the subscription revenue model that would affect a small but significant selection of Twitch’s most successful content creators. 

A lengthy blog post penned by company president Dan Clancy reassured streamers that they “are and always will be the foundation of [Twitch’s] global community” before letting the select few creators on custom deals know that their share of revenue above $100,000 will be slashed from 70% to 50%. 

Before you go searching for the world’s smallest violin to play for content creators generating six-figure revenues (not including other income like donations on Twitch), it’s worth explaining that it’s more about the message this sends than the direct impact it has on that small group of streamers. 

As Ash Parrish put it for The Verge, Twitch is losing its soul. Once known as the creator-first platform, it is now – for some – no more than another Amazon streaming service where profit extraction is not just a priority, but rather the singular focus. 

Zachary Diaz, a former director of emerging content and US head for creator management at Twitch, went in even harder and called out Clancy specifically for being “the embodiment of ‘Creator sentiment is secondary to everything’.” 

Clancy’s apparent claim in the blog post that Twitch pays roughly the same as everyone else for AWS (when describing how much it costs to host major streams) was also met with a healthy dose of skepticism, given that Twitch owns Amazon.  

Snapping at the heels

This all means that brighter chinks of light are streaming through the live streaming industry door as Twitch’s competitors scramble to shove a foot in.

Chief among those competitors is YouTube. 

Long the dominant player in online video sharing, YouTube has found it difficult to make a dent in Twitch’s video game live streaming market share. 

That’s despite breaking the bank to entice a range of the biggest names in the streaming world – including some who have been banned from Twitch. 

The main reason for YouTube’s struggles is discoverability – it still sucks on YouTube.

Sticking to the YouTube ecosystem does have its advantages, though. For example, having videos, shorts, and live streaming all in one place makes it much easier to build an audience than when this content is split across several platforms. 

Streamers on YouTube also benefit from better revenue share terms than on Twitch: It’s 70/30 on Youtube in favor of the content creator (and that goes for everyone, not just the big dogs on custom deals). 

It’s not just YouTube either. 

TikTok has made a big push into gaming over the last 18 months and there are new streaming platforms such as Kick, which is offering an unprecedented 95/5 revenue split.

Paying the bills

Dan Clancy’s explanation of Twitch’s increased costs may not have been entirely transparent, but you can’t argue with the general point that most things are a lot more expensive than they were a year ago.

It doesn’t cost a dime to stream on Twitch provided you have at least an internet connection and a smartphone, but most successful streamers invest in more high-quality equipment. 

The problem is that energy prices have gone through the roof across most of the world which means the cost of running resource-hungry gaming PCs, lighting rigs, camera setups, and more is also through the roof.

For small streamers struggling to earn their first subs and bits, the threshold to profitability is much higher now, and that’s pretty demotivating. 

It’s going to take a lot to topple Twitch from top spot in the video game live-streaming space, but competitors are investing heavily in their own platforms and will be eagerly awaiting any further slipups from Clancy and co. 

That’s if there’s anyone left who can afford to stream, of course.

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