Twitch Adjusts Subscription Prices to Match Earnings in Different Countries
Twitch subscription price differentiation is gaining momentum. After tests in Mexico and Turkey, the changes gradually extend to other countries.
Twitch is trying to encourage its users to support creators and buy paid subscriptions. The current rate of $4.99 per month is quite high and may discourage people from supporting their favorite channels. To change this, in May the service launched a price adjustment project. After several months of testing in Mexico and Turkey, the project is gradually being extended to other regions.
In recent days we got to know the rates for countries in Latin America, Africa and Asia. The quotas for Europe (including Poland) should appear soon - Twitch plans to introduce new price lists still in August. The only countries where the cost of subscription will not change are the United States, Canada, Switzerland, Israel and Japan. The price will depend on the country of residence of the viewer, not the streamer. This means that on a single channel, viewers will be able to subscribe at different values.
As Twitch writes, there are currently very large differences in the number of supporters between regions:
"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."
The new prices are quite diverse, Twitch, however, does not provide the exact algorithm by which it calculated them. The lowest price, only 1.49 dollars, is paid in Azerbaijan, Vietnam, Egypt or Madagascar. The reduction was thus up to 70%, although in wealthier countries the prices have fallen much less - in South Korea by about 25%, and in Australia by about 12%..
Supporting creators on Twitch - not just subscriptions
Subscription is the basic form of support for the channel. It is a monthly fee, so far at $4.99. (Tier 1), $9.99. (Tier 2) or $24.99. (Tier 3). It enables the user to watch ad-free broadcasts, be recognized in the chat with a special badge and get access to the channel's emotes. More expensive subscription levels unlock more emotes and more prestigious badges displayed before the nickname.
It is also possible to cheer - support the channel with tips. This is done by using special points (bits) bought with real money. After reaching a sufficiently high amount of tips on the channel a user can also unlock badges and emotes.
Due to the commission charged by Twitch from each subscription and tips many streamers encourage viewers to support them directly outside of the platform. There are now at least a few large services that enable us to easily donate directly to the creator's account.
Payments for streamers
Lowering subscription prices can increase revenue for both creators and the platform itself in the long run. However, it may take some time to attract new people for whom the previous prices were too high. That's why Twitch has come up with a rather complicated system of subsidies and profit equalization so that creators are not harmed by the changes. The whole program is supposed to last 12 months, offering lower support every quarter, compensated by increasing (assumed) revenue from more and more subscriptions.
To be eligible for compensation, at least 20% of revenue must come from countries covered by the new price list. Further requirements are based on statistics of both hours and profits over the past three months. Twitch requires streaming time to be no less than 85% of the average time from the base period. This could be a potential hurdle for channels that have been very active recently and have run popular 24-hour or "extended" coverage (sometimes exceeding 100 hours, depending on the level of viewer support).
Twitch has an ambitious goal of activating local markets. Lowering subscription prices may help, but lower profitability outside the US is not only due to wealth differences, but also to cultural ones as well. Streams are still a novelty for many and are associated primarily with esports events or broadcasts from inflatable pools. On Twitch, however, there are many small channels created not for profit, but out of passion, around which small communities are formed. Lower subscription prices are supposed to help them grow and attract new viewers. Whether this will happen - time will tell.
