Why Musicians Never Joined Twitch
8 min read

Why Musicians Never Joined Twitch

Hello, hello! Correction from last week: I put the wrong link for the reader survey, but this link should now work! Apologies for the mistake there. Otherwise, I want to reiterate that I recently started a new job at a NYC agency, which is really exciting, but the career pivot is definitely slowing down my ability to respond to emails, so please be patient with me. Now, let’s dive into Twitch. 

Money 4 Nothing, America’s favorite podcast examining the intersection of music and capitalism, is on Patreon. Well, the topic is Patreon. I joined Sam to chat about my previous newsletter and go a bit deeper into the limits of direct subscriptions. 

Earlier this month, I covered Patreon and the struggles the company faced in the late 2010s, the brief COVID-19 bump, and how that only delayed lingering business weaknesses. My reason for contrasting with Twitch is that the sales pitch to musicians (connect directly with your audience, bypass the record labels, etc.) was practically the same. However, Twitch due to the success of gaming streamers was able to flash even more dollar signs and exceptions that prove the rule to woo interested musicians who’d like to join this bandwagon. Yet, just like Patreon, most working musicians never rushed toward the platform despite the company’s brief but notable attempt to sway their opinion. 

The relationship between Twitch and the music industry was always a bit odd. Originally called Justin.tv, Twitch found its calling as the main platform to watch people livestream video games and eventually built up its own ecosystem of live streamers reacting to other content or producing their own. The livestream model is intensive for creators because one cannot perform one live stream, find an audience and six figures of income come their way. Discovery is a long-standing issue on the platform, and the methods of monetization via subscriptions and donations aren’t conducive to one-off broadcasts. The need to replicate a television-like schedule isn’t easy, see Netflix’s early days, but it is quite a bit to ask of someone only equipped with a webcam and an internet connection. 

Pre-pandemic Twitch’s musical output appeared centered around providing easy-to-use music of major streamers and perhaps setting up one’s own 24/7 streaming channel like a Monstercat. (I covered Monstercat in a piece that no longer exists online, but my coverage on YouTube channels in 2017 highlighted similar themes.) Certain companies were able to make it work, as the previously mentioned YouTube began to allow livestreams, Twitch’s niche became less obvious. Still, during the pandemic with musicians stuck inside Twitch saw an opportunity to market itself to struggling musicians. 

In early 2020, hints could be found in press releases around nabbing former Spotify employees and pulling them into Twitch, which included Athena Koumis and Tracy Chen. These moves to increase legitimacy were followed by headlines about artists like Mike Shinoda working with Twitch or this one that read: “Logic signs seven-figure exclusive streaming deal with Twitch”. All the ingredients were there: plucking former employees of the major streaming platform, a willingness to spend real cash on big names, and booming user growth! Also, Twitch is owned by Amazon, which already has Amazon Music, a perfect storm for industry commentators to spin up nonexistent synergy strategies. Well, that’s what one might assume. 

Now, let’s take one step back: Twitch is a pretty awful business. (Devin Nash, a former esports executive-turned YouTube/marketer, is a great resource in understanding the years of business struggles attached to Twitch.) It’s extremely expensive to build and run a livestreaming platform, which even if you’re Amazon cannot simply always be taken on the chin. The audience of Twitch though it grew massively during the pandemic was still stuck circling around those interested in video game culture but more importantly those with many hours of free time to watch these content creators. This limited the amount of money that potentially could be made via advertisers. That many Twitch subscriptions are connected with Amazon Prime bundles again makes it hard to know how much of the company was simply being propped up by its corporate owner. Yet that question became a lot easier to answer as the pandemic bubble receded. 

Much like Patreon and other internet platforms, if one looks at publicly available data of Twitch usage it’s really easy to see the platform pre-pandemic wasn’t growing too intensely but the pandemic gave it a year of intense growth that’s now begun to shrink over the last year. That’s even more noticeable within the music category on Twitch. The bubble burst even before musicians were really to take much of a look at the platform. 

Image from TwitchTracker
Image from TwitchTracker

Company spokespeople like Tracy Chen in interviews would stress that using Twitch requires one to abandon the traditional music industry mindset, and replace it with a far more intense Twitch-oriented worldview: “To the extent that you can stick to as regular a schedule as possible… the easier you’ll find it is to drive retention and to help your audience anticipate hanging out with you at certain times of the week.” The amount of work that is required out of a Twitch streamer is incredibly high, it’s thought folks need to stream for multiple hours a day to really build and maintain an audience. That’s an intense level of commitment for a platform asking musicians to “engage” with their fans, whatever that means. Thus unfortunately it cannot be too shocking to see that many of the folks who worked at Twitch and championed it during the pandemic peak, no longer work at the company or were laid off over the last year, on top of reported broader mismanagement. (Additionally, Twitch faced tremendous industry pushback over licensing concerns that must’ve ended up adding further costs to an unprofitable company.) 

All of the reasons stated above may help explain why Twitch struggled to catch on with musicians outside a couple of pandemic-era exceptions. There simply was never a large Twitch audience to support the artists who were even interested in doing this type of media work, since it’s a platform dominated by video games. The promise of direct fan connection rang even hollower, as I mentioned with Patreon, as almost every other media platform began to offer a direct subscription product. If a musician wants to connect with their fans there’s Bandcamp, Instagram, Onlyfans, Tumblr, Snapchat, etc. Nearly all platforms at this point offer some form of direct subscription with Twitch, as noted above, being notorious for taking the most from creators.

My attention this month is on Patreon and Twitch, but my critique of the direct subscription model is intended to be a bit broader. There's a tremendous business reason to love a direct subscription model (easier to forecast revenue, potentially lower overhead cost), but it’s one that places an excessive burden on artists and consumers. There is an expectation to produce to justify one’s subscription, and then as a consumer, you’re now financially bound to this artist. Now there are certainly ways to make this work but with limited time for content and tighter consumer personal budgets, it’s easy to see the subscription ceiling. (The declining engagement numbers of Patreon and Twitch bear this out, along with the implosion of the western Esports industry, another bubble based on overhyping young people's consumption habits.) 

Thus it’s distressing to see certain segments of the music industry so quickly eyeing the most predatory aspects of the video game industry that prays heavily on high spenders (“whales” or maybe “super fans”) and pushes borderline addictive practices (K-Pop and Taylor Swift’s obsession with encouraging purchasing multiple copies of releases). The music industry is quick to champion the billions made by video games but that community has gotten a bit more sober in seeing the practices as hurting the industry they love all in an effort to squeeze ever more money out of a shrinking number of people. Digital subscriptions alone may not immediately signal this shift but further gatekeeping, price hikes, and forcing consumers into merely paying for access to eventual content are leading towards this direction. The stagnation and decline of platforms like Patreon and Twitch should be fair warnings not to over-commit to business practices already proven to be unsustainable. 

Unheard Labor 

This month Amazon announced a number of cuts to their music streaming and Alexa divisions. Obviously, good luck looking for new work, but Alexa is a billion-dollar boondoggle and Amazon Music is basically an Amazon Prime bundle giveaway. 

Government Tunes  

No major news this week, but I am laughing at seeing Binance, the world’s largest crypto exchange, get a $4 billion fine from multiple American agencies and the company’s CEO, Changpeng Zhao being forced to step down only a few weeks after SBF being found guilty in his trail. Still cannot forget when the music industry spun itself into a twist to get behind crypto and Web 3.0. 

A Note of Financialization 

No catalog deals this week. Thank God. In news you can use. Anghami, the Middle Eastern streaming platform that went public via SPAC and has spent the better part of a year filtering with delisting from the Nasdaq, is in talks to be acquired by OSN+, a major video streaming platform in the region. An unprofitable business with an extremely questionable market fit is not where I’d invest $50 million, but capital holders in the region don’t wanna give up on the “Spotify of the Middle East” dream. 

YouTube is clamping down on AI-generated clones of superstars / Welcome to the future: AI-generated vocal clones of superstars now available on YouTube Shorts – thanks to Google’s ‘most advanced music generation model to date’ - Music Business Worldwide 

YouTube is both shutting down AI-generated songs that imitate famous musicians and pushing AI-powered features with the voices of many hitmakers. The sheer desperation radiating from these headlines should be embarrassing for all involved to pretend there’s anything worthwhile in this novel garbage. Yet the music industry, which is increasingly reliant on a few technology firms, cannot see just how weak of an offering this is for the consumer market. However, this is a boon for large copyright holders both eager to sue bad actors and deep-pocketed good-faith ones. 

The Sneaky Sticker Shock of Subscription Culture - The New York Times 

Someone wrote the consumer version of what I’ve been hinting at across my examinations of Patreon and Twitch. Not only are these passive modes of consumption expensive but also hamstring one’s budget away from the flexibility of one-time purchases. Again no wonder certain companies love this business model but also why it’s incredibly hard to sustain without significant scale. 

Warner Music Group Signs up for Deezer’s Artist-Centric Payouts - Music Ally 

UMG’s grip on the future of music industry payouts is ever more solidified.  

Big Tech May Have Met Its Match in Gen Z - Bloomberg  

A little piece about how certain young people are standing up for more technology regulations. Young people's usage of technology is certainly too high, so the idea this is a generational shift feels a bit too hopeful, but props to those fighting for some, any, regulation. 

Confessions of a Middle-Class Founder - New York Magazine 

An exceptionally tedious, though readable, essay by one of Silicon Valley’s lesser-known figures: the moderately successful start-up founder annoyed that they didn’t make more money during the recent boom years. If tech over the last decade produced something more valuable for society than middling go-nowhere apps then perhaps I could feel more for these folks. Still, I appreciate the peek into the mindset. 

The Spectacular Failure of SPACs - The Hustle 

Remember when a cluster of millionaires, billionaires, and celebrities tricked a bunch of people into investing in poorly conceived business ventures? This newsletter highlights that not only were most of those companies bad investments at the moment, but most of them never even made it to the public market. A great usage of capital and resources, everyone. Even though multiple music SPACs similarly fell on their face; Anghami, Deezer, and Reservoir Media did go public and remain well below their $10 listing price. Again great usage of capital and resources, everyone.