Analysis
On Tuesday, Twitch announced new rules and guidelines for branded content on its platform, and creators are not happy. Twitch’s new advertising rules will go into effect on July 1 on the Amazon-owned live-streaming service, prohibiting the size and nature of ads streamers can use. However, Twitch backtracked later on Tuesday, saying they would rewrite the guidelines due to backlash from creators.
On Twitter, creators called the changes “insanity,” “crazy,” “the most anti-creator shit I’ve ever seen,” and said, “These limitations are going to push content creators away.” But what riled everybody up?
What are Twitch’s new advertising rules?
According to the guidelines released, on-stream logos for advertisers can now only take up three percent of the screen. “Burned in” display and audio ads (which according to Twitch are “prerecorded ads or commercials that are embedded directly into the stream”) are completely prohibited—raising concerns that such strict restrictions will make sponsorships much more difficult for creators to handle.
Streamers can still have branded panels on their channel page, and products in their stream background. The initial announcement also said streamers will soon have access to a branded content disclosure tool, which allows streamers to label their streams as ads or sponsored content.
But in probably its most controversial move from the new rules, Twitch also said it was barring “promotions, sponsorships, or other advertisements for third-party sponsors or advertisers in their streams if Twitch offers a comparable ad format.”
The language and nature of this part of the post are confusing, with Twitch seemingly barring other companies (later clarified as ad networks) from setting up branded deals for content creators. It’s even unclear how Twitch would know which ads are from a “third party” and which ones are from the streamers by themselves.
Advertising creators away
The news was so confusing that Twitch Ambassadors, a group of streamers selected by the company to represent streamers’ needs, had an emergency meeting with Twitch. According to streamer Study Time, the goal of this change was “to prevent third-party providers from showing random ads.”
But that’s not how everyone else sees it. On Twitter, creators called the changes “insanity,” with one calling it “the most anti-creator shit I’ve ever seen.”
“Twitch is focused on shutting down any advertisements that conflict with their own ad units, even if that is at the expense of the creators,” head of esports organization Luminosity Alex Gonzalez tweeted.
“All streamers should be looking to leave Twitch if this goes through, continuing to hurt the bottom line of all streamers,” Twitch streamer Matthew “Mizkif” Rinaudo tweeted.
Many streamers threatened to leave Twitch altogether. Tips Out, the co-founder of streamer organization OTK, tweeted that his organization “will be leaving Twitch.” “This is a direct attack on our business, staff, and all of the hard work we have put into our organization,” he said.
OTK member and 3.4 million follower streamer Asmongold said on stream that he will move to a different platform “if this goes through.” He added that “this is fucking everyone over in a way that doesn’t need to happen.” OTK released its own statement parroting these thoughts.
These new rules also hurt large events being shown on stream. Award shows, esports tournaments, and charity streams often have sponsors’ logos and run their advertisements during the broadcast. Streamer QTCinderella, who puts together The Streamer Awards, tweeted that she isn’t sure how her award shows are “going to be able to exist.”
“Many creators, events, and leagues count on brand partnership money to produce content,” Brandon Freytag, chief of creator monetization at Loaded, a streamer talent agency firm, told Passionfruit. “If there are dramatic limits on how they can promote, they will need to find new ways and/or platforms to provide exposure to their brand partners.”
Twitch made an oopsie
In response to the backlash, Twitch released a statement on Twitter. It said the “branded content policy update was overly broad” and that it will “notify the community once we have updated the language.”
“We wanted to clarify our existing ads policy that was intended to prohibit third-party ad networks from selling burned in video and display ads on Twitch,” the statement read.
Over the past two years, Twitch shifted how advertising works on the platform to convince streamers to play more of them. In early 2022, it launched the Ad Incentive Program for partners which paid a set amount of money if they agreed to run ads every hour.
According to StreamLabs, if you streamed 40 hours a month and played four minutes of ads every hour, you’d get a $500 incentive. But outside of that set fee, it’s unclear how much money you’d make off of ads. Plus, creators risk alienating audiences with too much-branded nonsense getting in the way of content.
Twitch already faced criticism in April 2023 due to various “sponsorship experiments” it made in an attempt to take a cut of some of the deals done on its platform.
In addition, Twitch’s new advertising rules also come one week after the implementation of a change in how top streamers earn subscription revenue.
For most of Twitch’s existence, the platform signed special contracts with top streamers that gave them 70 percent of net sub revenue. But in a September 2022 blog post, Twitch’s president Dan Clancy announced these special contracts are no longer being created. As of June 1, 2023, the favorable split will now only work up to the first $100,000 earned through subscriptions, then falling back down to 50.
Stealthy changes
There are a few other changes that went largely unnoticed until Tuesday to simulcasting and affiliates. Added on May 30, according to the Wayback Machine, anyone who streams on Twitch “may not simultaneously live stream” on any other “web-based platform” that isn’t “mobile first.” Twitch Partners originally were the only ones required to follow this simulcast rule (which debuted in September 2022) but now it seems like it applies to everyone.
Twitch updated its monetized streamer agreement last on May 31. In it, there is a clause saying Twitch can charge streamers $25 if they cancel an affiliate or partnership. The clause also went viral on Twitter on Tuesday, receiving backlash.
Streamer LowCo tweeted about this clause, saying it was added on Tuesday (though it’s unclear when the change actually took place). She said she “feels like things are about to get even worse.”
In another viral controversy, the platform also allegedly sent out notifications to Twitch Partners. It said there is a new contract related to the updated terms they need to sign or else they will get demoted into Affiliates.
Is an exodus on its way?
Twitch’s new advertising rules fundamentally make streaming worse for everyone. Currently, streamers use talent agencies to help streamers get set up with brands, who can pay to put “rotating banners, specific video advertisements, floating logos, and custom graphics” onto streams.
Freytag said, “These promotion formats are threatened by the new rules.” The move also gives streamers less real estate to advertise on, which “would simply make it harder for creators to realize maximum value for their sponsorships.”
Streamers either have to find sponsorships themselves, run more ads, push subs even harder, or shill their merchandise in unique ways to make as much money—all of which have the chance to ruin the viewing experience and make viewers dip.
It’s more likely that these creators will flee to other platforms like YouTube or even the controversial Kick, rather than deal with Twitch’s ever-evolving changes. Though YouTube does have similar rules for video ads, it doesn’t show mid-roll ads multiple times an hour. It is also testing a new hub for ad-supported TV channels giving viewers more choices.
Twitch is nothing without its creators, and moves like these push them farther away. Eventually, the top streaming site will lose its spot as king of the hill if it keeps making streaming a less enjoyable experience for all.
Update, June 8, 9:50am CT: Just one day after announcing these changes, Twitch said it is completely removing the new branded content guidelines due to backlash from creators. Still, the controversial policy around simulcasting remains.
