Twitch is announcing a major change in subscription pricing, but not for US users. Most countries outside of the US will get lower prices that will localize to their specific country, starting with Turkey and Mexico on May 20. Those lower prices mean less money for streamers, but Twitch believes they will translate to more subscribers and higher revenue in the long run.
Right now, the most affordable Twitch subscription, which allows fans to pay for streamers and get perks like custom emotes, currently costs $ 4.99, a price currently translated into local currencies around the world. That translated price may be prohibitively expensive for some Twitch users, said Mike Minton, Twitch’s vice president of monetization. The edge in an interview this week.
The upcoming change is to make subscriptions more affordable to Twitch’s global audience. And Twitch’s early tests look promising: The company tested localized pricing in Brazil and saw streamer revenue and total subscriber counts “more than doubled.” according to a blog post.
But Twitch is also preparing for a possible scenario where streamers could see their earnings drop due to price changes, as streamers need more subscribers – potentially a lot more – just to match their current earnings. If a streamer’s earnings fall below their usual baseline (which Twitch calculates for each streamer) after the localized prices are rolled out, Twitch will pay that streamer a “earnings adjustment incentive” to help make up for the difference.
Here’s a basic description of how the incentive will work, according to Twitch:
Twitch will cover 100% of the base channel and Prime sub earnings (if needed) for three calendar months, including the month of the price change. Thereafter, we will slowly decrease stimulus payments by 25% every three months for the next 9 months, in total a 12-month period during which we provide income adjustment incentives.
You can read the full details about the incentive here.
The rollout will begin first with Turkey and Mexico, where subscription prices will be reduced to 9.90 Turkish lira (the equivalent of $ 1.20) and 48 pesos (the equivalent of $ 2.41). Twitch plans to bring localized pricing to “most countries in Asia, Latin America, the Middle East, Africa and Europe from the third quarter of 2021,” according to Twitch’s blog. Localized prices carry over to the two more expensive plans and also to gift plans. And prices are not increased anywhere, only reduced.
The changes come as many platforms want to provide their creators with better ways to monetize their followers. Twitter is testing a new Tip Jar feature and will begin rolling out ticketed social audio rooms in the coming months, and Clubhouse is now letting people pay creators directly (although not everyone can receive payments yet). While Twitch isn’t announcing any new monetization features today, the reduced subscription prices could lead to more people paying streamers directly.