Twitch announces a big change in subscription prices. Most of the countries outside the U.S.. will get lower prices to be localized in your specific country, starting with Turkey and Mexico on May 20. Those lower prices will mean less money for broadcasters or streamers, but Twitch believes they will translate into more subscribers and higher long-term earnings.
At this time, the most affordable Twitch subscription costs $ 4.99, a price that is currently translated into local currencies around the world. However, that translated price can be prohibitively expensive for some Twitch users, Mike Minton, vice president of monetization at Twitch, told The Verge in an interview this week. This change that excludes the US is due to the fact that the percentage of active users in Europe or Asia, who support creators with a subscription, is approximately 50% lower than in North America. In Latin America it is almost 80% lower.
This change is intended to make subscriptions more affordable for the global audience from Twitch. And the first tests of localized prices in Brazil were promising, since broadcaster revenue and total subscriber count “more than doubled”, as stated the Twitch blog post.
NEW: Local subscription prices
Here is a basic description of how the incentive will work according to Twitch: First, they will cover 100% of the referral channel and the secondary income of Prime (if necessary) for three months, including the month of the price change. After that, they will slowly decrease the incentive payments by 25% every three months for the next 9 months, totaling a 12-month period to provide income adjustment incentives. You can read the full details about the incentive here.
Launch begins first with Turkey and Mexico, where the prices of a subscription will be reduced to 9.90 Turkish liras (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 starting in the third quarter of 2021.. Localized prices will carry over to the two most expensive subscription tiers and also to gift subscriptions. And prices will not go up anywhere, they will only go down.
What does this drop mean for streamers?
Twitch is also preparing for a potential scenario where streamers could see their revenue drop as a result of price changes, because streamers will need more subscribers, potentially many more, just to match their current earnings. If a streamer’s revenue falls below its usual baseline (which Twitch calculates for each streamer) after localized pricing is implemented, Twitch will pay that streamer an “income adjustment incentive” to help make up the difference.
While Twitch isn’t announcing any new monetization features, lowered subscription prices could lead to more people paying streamers directly to prevent Twitch from taking a higher commission for a lower price. Of course, In Spain at least, content creators who work on Twitch do not earn their salary through first-level subscriptions or Amazon Prime, but through donations, collaborations and the constant support of the followers, since it takes a huge number of subscribers to earn a lot of money. In fact, the highest numbers of subscribers on Twitch are around 10,000 / 15,000 per month, this in large channels; However, people can live on Twitch with about 800 subscribers a month, something that will change with the price drop.
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