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Twitch Imposes Licensing Fees on DJs in Exchange for Access to Major Record Labels' Music

The specific percentage of revenue that will go to the record labels has not been disclosed.

Photo by Feliphe Schiarolli / Unsplash

Twitch has announced that DJs with monetised streams will soon have to pay licensing fees to use songs in their live sets. The move is set to take effect this summer and comes as part of a new partnership between Twitch and major record labels, including Universal Music Group, Warner Music Group, and Sony Music as well as indie-licensing agency Merlin, that would allow DJs to stream sets using a wide array of popular music.

"With a constantly updated, searchable catalog, you can access millions of tracks, including the latest releases, ensuring a comprehensive selection for your streaming needs," Twitch shares.

The specific percentage of revenue that will go to the record labels has not been disclosed, but sources indicate that DJs and Twitch will share these costs equally.

To help DJs adapt to these changes, Twitch will offer a one-year subsidy to select DJs to bridge the gap between their earnings and the licensing fees. However, details on how these subsidies will be awarded or whether they will fully cover the required fees remain unclear. The Amazon-owned live video platform has only stated that the subsidy amounts will decrease over time as the program gains traction.

New restrictions and opportunities

DJs participating in the program will be unable to save VODs, Clips, or Highlights on Twitch due to different rights associated with these formats compared to live streams. But Twitch says it's developing additional promotional and discovery opportunities to enhance the reach and impact of DJ content. DJs who only spin records part-time are encouraged to create separate channels for their DJ activities. Alongside these changes, Twitch will introduce a new DJ category and offer front-page opportunities to help DJs reach new audiences.

"For the first time in Twitch history, we’ll be launching and promoting an official DJ category so Twitch viewers can browse and discover DJs and their communities. Category launches in the next few months!"

Hobbyist DJs who don't monetise their streams won't have to pay out of pocket. While record labels will still earn from these streams through ads on non-partnered channels, Twitch has committed to covering these costs for now. However, it's uncertain how long Twitch will maintain this support.

“This program is only applicable to those who live-stream as DJs, and does not apply to other uses of music. VODs, Clips, and Highlights are not included in this program, because they involve different rights than live-streams,” explained CEO Dan Clancy in a blog post.

Twitch has justified this move by citing the unsustainability of the previous model, which did not compensate labels or artists. The company aims to avoid the pitfalls of DMCA takedown notifications and copyright penalties that have plagued the platform. Until now, DJs were left to navigate these complex legal waters on their own.

"DJs who opt-in will be able to livestream the vast majority of popular music without risk of takedowns, and will qualify for new opportunities on Twitch we haven’t been able to previously offer," Twitch shares in a blog post. "DJs face the challenges of takedowns, muted streams, and bans across many of the major services. To tackle these issues for Twitch DJs, we’ve had ongoing discussions with music companies to develop a solution. After several years, we’ve finally reached an agreement that makes it possible for both DJs to use popular music and musicians to be paid when their music is used in live DJ sets."

While some appreciate the attempt to create a sustainable model, others worry about the financial burden and the fairness of fund distribution by the labels. “This announcement is a huge step forward for DJs who want to share their music online. Twitch helping solve this problem shows how much potential there is, and how important DJs are to the Twitch community,” shares Twitch Steve Aoki's vision in their blog post.

It's worth noting that the agreement is with the record labels, not the individual artists, so it's unclear whether the artists will receive their fair share promptly.