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Twitch Is About to Give a Portion of DJs’ Revenue to Music Labels. Backstabbing or Virtue?

“You guys are making money on twitch? Lol."

Photo by Kadyn Pierce / Unsplash

During an interview with TweakMusicClips, Twitch CEO Dan Clancy revealed plans for revenue sharing from DJ sets held on the platform with record companies. It’s yet unclear when exactly this measure will be fully fledged, though, but Clancy says it will be "soon."

According to Clancy, the platform is developing methods to track the music played on the platform and will cover part of the costs for musicians. This is how it’s going to work: streamer DJs will have to inform the service about their earnings from broadcasts if they use copyrighted music in their sets. After receiving information about earnings, Twitch will send a portion of the funds to music labels and rightsholders. But to sweeten the move a bit, Twitch intends to share the financial burden with streamers.

The new measures are designed to protect the platform from requests to remove content that violates copyright. Twitch also plans to achieve fair revenue distribution between the platform, rightsholders, and streamers, Clancy noted. Currently, Twitch pays labels for the use of copyrighted materials. However, as Dan Clancy notes, such a model is not sustainable in the long run and labels reportedly agree with the current state of affairs only because Twitch is developing more transparent, understandable, and beneficial ways to distribute revenues for all parties.

Twitch's role in the music industry — how big is it?

Pretty big but might be exaggerated. It all started during the pandemic when live shows were cancelled all over the world and all social activities migrated to Instagram, YouTube, and then Twitch. And that’s no surprising, considering that Twitch, even if initially designed for the gaming community, has all possibilities for live sets, fan interaction in real-time, community building, and even monetising shows with donations. In 2020, average weekly concurrent viewership in Twitch’s Music category went up over 4x, as Water and Music reports.

But when the pandemic was over, the interest towards Twitch didn’t diminish. On the contrary, Twitch's signed an agreement with the National Music Publishers' Association which presumably makes its efforts to collaborate with the music industry and address issues related to music rights even more tangible. Strategic partnership with Warner Music Group was another sign that it’s just the beginning.

Monetisation on Twitch is one of the primary incentives that made DJs, EDM producers, and musicians migrate to the platform, and now, in light of the news, this incentive is impacted the most. Spotify’s former executive, Will Page, once released a report which revealed that some artists were making significantly more money from Twitch live sets than from other streaming platforms. The report features several case studies, including Laura Shigihara, the composer and sound designer who works in the gaming industry and has earned about $8,000 a month through her Twitch livestreams, which was at that time over ten times more than she made with more conventional music streaming platforms. Such cases were numerous.

Some other examples of successful music campaigns are Kenny Beats, HANA, knxwledge, and Illmind, who have engaged consistently on the platform, streaming at least three to four times a week on average and offering full-on variety shows that extend beyond just music streams. Some artists, like Logic for instance, have signed exclusive deals with Twitch. Many of these artists and DJs were famous before Twitch, though. Data on how much artists make on Twitch shared by Water and Music also reveals that the picture might be incomplete due to additional sources of income, such as donations outside Twitch.

“In an aggressive bid to build up their music catalog, Twitch will also pay select artists as much as $250/hour in additional incentives on top of tips, subs and ads in exchange for streaming regularly on the platform. These incentive-driven deals are obviously negotiated behind closed doors, and are not factored into the leaked earnings info — which is presumably why artists like Logic can sign “seven-figure” deals but not actually make seven figures in direct platform earnings in a year,” Water and Music shares in their article.

The Wall Street Journal reported that more than half of Twitch's direct platform revenue is controlled by the top 1% of highest-paid streamers and only 5% of all streamers have managed to earn over $1,000 from direct platform earnings in 2021.

This music and live sets monetisation potential (not very huge, though) is shadowed by some complications. When streaming, artists may face DMCA takedowns and copyright issues, thanks to a strict policy on copyrighted music.

Twitch follows the Digital Millennium Copyright Act (DMCA) and similar laws worldwide, and copyright infringement can result in strikes on a channel. Once a creator receives three strikes, Twitch may limit their access or delete their account. The platform automatically detects audio and can identify if copyrighted content is being used on their platform, which can cause a creator's video to be flagged and muted.

The new move Twitch is about to make throws a bigger spanner in the works. Opinions among Twitch users and musicians on the announced plans are divided. Some have noted that revenue sharing seems fair, considering that DJs on the platform use other people's works without paying royalties or purchasing rights to use other artists' works in their creations. Another part reacted unfavourably to the decision, noting that it would be easier for musicians to find another platform for online performances than to lose income.

“If they get licensening like Mixcloud so I can play music with out takedowns and copyright strikes then im all for it. But if it's just another jab from Bezos so he can buy Mars then fuck him and Amazon. There are plenty of streaming options and djs dont make shit on twitch anyways (except for a couple who were already famous before twitch),” says a DJ on Reddit.

Twitch doesn’t elaborate on this move and doesn’t share if other members of the streaming community might follow DJs in revenue sharing.

But will DJs even notice it? That’s the question for another story.

“You guys are making money on twitch? Lol."