Amazon is beefing up Twitch with a new VIP-like feature for creators and a paid tier for viewers. At the same time, it has found a way to boost Prime members.
Amazon’s Twitch adds creator subscriptions
The Amazon-owned company is coming out with a new feature that is exactly as the name suggests. Any Twitch Affiliated or Partnered streamer can choose to broadcast exclusively to moderators, VIPs, and channel subscribers. The feature comes at no additional cost to the streamer above and beyond the $5-a-month fee they’re already paying to be part of the Partner or Affiliate program.
A viewer that is not subscribed to a channel will be able to see a preview of the broadcast but will then be asked to subscribe.
The subscription option marks the first time that partners and affiliates have been able to restrict broadcasts to subscribers-only. Before, subscribers would only get certain privileges, such as ad-free viewing.
There is one caveat; creators must be well behaved. In other words, creators can’t have any violations on their channel for more than 90 days to be eligible. For example Dr Disrespect was suspended for two weeks for broadcasting from a public bathroom. He will not be eligible for another 90 days. Twitch’s blog stresses that a Subscriber Stream must fall under the terms and conditions set by Twitch and that these streams are not private.
Subscriber Streams aren’t that different than regular streams. Twitch will promote them a little more, and they will have a star icon next to them. It is mostly left up to the creator to find a way to make these streams more ‘premium.’
Of the $5 per month users pay for the subscription, half goes to Amazon, and the rest goes to the streamer. Certainly, affiliates will be happy with a new way to make money (Ninja is set to make millions this year from it). Others will be satisfied and encouraged that they won’t have to depend on unreliable ad revenue. While this may give the top streamers a bump to their bank account, it won’t be a game-changing money maker for Amazon. A rough estimate of the revenue generated by the top 100 streamers wouldn’t give Amazon more than $1 million/month.
With so little revenue at stake, why is Amazon bothering to do this at all?
Amazon finds another way to boost Prime membership
Amazon is dedicated to expanding Twitch into a more premium service. It has made Twitch Prime a priority at the company. Twitch Prime allows users to access content they usually would not be able to. They also get a free subscription to a channel every month, use exclusive chat privileges, and get access to game content. To get Twitch Prime, a user must sign up for Amazon Prime membership for $119 per year. This is the only way to get it.
One key feature that members receive with Twitch Prime is one channel subscription. Data from the top 100 channels show this feature is being used heavily. Each streamer typically has as many or more ‘Prime subs’ as they do ‘paid subs.’ For instance, top streamer CriticalRole has 47,440 subscribers, 35,823 of which are subscribed through Amazon Prime and 9,897 paying separately for the subscription. With so many Twitch users also Prime Members, there might be a sneaky reason for this new feature.
Most Twitch users are young. The average user age is 21, with a high percentage younger than that. Amazon Prime members can share their account with one adult and teenage or younger children. In other words, most Twitch users don’t qualify to share their parent’s Prime account. The only way they can get access is if the Prime account owner shares their password.
Data from an in-depth piece published by IBM in 2016 shows that Prime account owners are mostly unwilling to share passwords with their children.[i] According to the paper, only 38% of Amazon Prime members said they were willing to share passwords with family members. In other words, most Twitch users will need to purchase a Prime membership to enjoy Twitch Prime benefits.
The boost in Prime membership from Twitch Prime could be worth a lot to Amazon. For example, if top twitch streamer Ninja has his subscribers purchase a Prime account, that would produce $4 million/year. Amazon has long sought to solve the problem of getting users off their parent’s accounts, including giving huge discounts to students. Twitch Prime seems to be another step in that direction.
Amazon gets users to pay
Getting users to pay for content they have traditionally consumed for free is hard. YouTube tried and failed with its premium offering. Facebook has not even attempted to do so. The only company in the social video landscape that allows users to pay for a subscription from a creator is Patreon.
Amazon has managed to get users to pay for social content they previously received for free. It has done it without adding any substantial new features and has found a way to increase Prime members at the same time.
For those in the social video market or anyone with a stake in an internet company, I’d be nervously taking notes.
[i] IBM Clearleap, Everybody wants to rule the streaming world, Clearleap, Q1 2016, page 3