Twitch is admitting the equivalent subscription models of it’s main competitors, YouTube & Facebook, are just better. New regional subscription pricing one of the biggest changes is Twitch’ monetization history, and it’s going to roll out gradually during Q2/Q3 of 2021.
The current price model is aimed at around $4.99 for a tier 1 subscription. However, some countries like Canada, Australia and even New Zealand, pay upwards of $7.50 for the same exact tier 1 subscription. This is likely due to regulations, as well as certain local sales taxes that might apply.
Details behind the decision
Twitch in it’s latest blog post:
The percentage of active users in Europe or Asia who support creators with a subscription is roughly 50% lower relative to North America. In Latin America, it’s nearly 80% lower.
We conducted several price tests and saw that lower sub prices boosted overall monthly subs and sub revenue for creators. In one recent test in Brazil, lower sub prices more than doubled creator revenue and total subscriber count.
From May 20, 2021, Mexico and Turkey will be the first countries to get discounted Tier 1 subscriptions; at $2.41 (MXN 48) and $1.19 (TRY 9.90) respectively. This is a drastic switch, but not unseen, as YouTube and Facebook have similar pricing e.g. in South-east Asian countries.
Partial compensation of potential losses to streamers
The interesting part is that Twitch will be covering 100% of potentially lost revenue due to the changes for the first three months, and partially cover it for up to 9 months after that. BUT, only if the creator live streams at least 85% of their average monthly hours. Twitch will also calculate the “baseline” average revenue over the last 3 months, and only cover up to that amount per month.
We are yet to see whether this change will be welcomed by creators and viewers alike, as Twitch is still not changing the massive 50% cut out of most creators subscriptions. The competition is at a much lower percentage, which is still one of the main reasons why so many Twitch creators are switching to other platforms. However, the free Twitch/Amazon Prime subs make up for a portion of that, and it’s what is keeping Twitch slightly ahead of others.