Released yesterday, Twitch TV’s Turbo gives viewers the ability to watch every stream hosted on Twitch TV, ad free. For $8.99/month you can watch anyone’s stream without being plagued by ads. Sounds like a good deal right? But lets look deeper into the figures…
In my opinion, Twitch’s idea to release Turbo is a step in the right direction, but there is still room for improvement.
Currently, the majority of streamers who use Twitch TV as a source of income are solely relying on subscriptions. Viewers pay $5/month of which 50% goes to Twitch and 50% goes to the content creator. To these major streamers, advert impressions are almost irrelevant. So how does Turbo affect these guys? Well, pretty badly. These guys are relying on their dedicated and loyal viewers to subscribe to their channel for $5/month. With Turbo being priced at 4 extra dollars, it’s clear that Turbo is aimed at viewers who are subscribed to 2 or more people. It’s a lot more appealing for viewers to pay $9/month and be ad-free from all streams, than paying $5/month per stream, and having no ads on only those streams.
So whats the issue here?
When viewers subscribe to a channel, $2.50 goes to the streamer. If people are cancelling their subscriptions and getting Turbo, the content creator loses out on that money and instead has to reply more on ad revenue. As a result, the streamer must play more adverts during their stream potentially causing a drop in viewers. By losing viewers, they’ll need to play more ads, and so on in an infinite loop until either Twitch step their game up, or a new streaming service comes available.
So who wins?
Twitch TV are the biggest winners here. Viewers have the ability to use ad block for free and achieve a similar result to Turbo. This means that the only people who are buying Turbo are people who want to support twitch. By doing this, you are indirectly hurting both the streamers, and Twitch TV themselves. Because of the knock-on effects, people are likely to leave twitch as a streaming service, thus, damaging their reputation even more.
Can we fix it?
Yes we can! Well, actually, no we can’t… But Twitch can! Charge more for the Turbo service, nearer to $20 in my opinion, give more streamers the ability to apply for a subscription button, and give streamers more than 50% of the subscription fee. Right now, you need more than 500 concurrent viewers per stream to apply for a subscription button. By dropping that number to somewhere around 100-200, Twitch will generate more income from people subscribing, with minimal impact on their servers. How do these ideas help?
- Viewers that watch more than 4 streams will be more inclined to get Turbo.
- Smaller channels can start using Twitch TV as a genuine source of income.
- Twitch still get money from subscribers + Turbo users.
Currently Turbo has the potential to make Twitch a lot of money in a very short period of time. The long term scenario however, could be watching their reputation getting destroyed and all their dedicated users leaving the service entirely.