Twitch and YouTube are phasing out expensive multimillion-dollar content deals with top live-streaming gamers like Tyler “Ninja” Blevins as the companies move away from their strategy of chasing talent with massive contracts.
At the TwitchCon conference in Las Vegas, Twitch Chief Executive Officer Dan Clancy told Bloomberg News that spending seven and eight figures on contracts with gamers is a strategy that has “created this bidding war, and I don’t think that’s a sustainable business.” YouTube is also ready to move away from offering big money contracts and plans to scale back on payment terms as well as the length of an agreement.
YouTube and Twitch were not available to comment.
YouTube and Twitch have been competing to retain top influencers who keep members coming back to their respective platforms, which drives watch time and ad revenue. The platforms anticipated that exclusive popular live streamers would bring in millions of fans to offset the costs of such massive contracts. However, many influencers, like Blevins, saw a steep decline in viewers after switching from Twitch to YouTube and went back.
In 2022, Twitch stopped requiring exclusivity from its contracted streamers. Clancy said influencers can now post their live streams on multiple platforms, including YouTube, TikTok, and Instagram, according to Bloomberg News.
This casts a wider net to drive up views and lets fans use their preferred streaming apps instead of signing up for multiple platforms to catch all their favorite influencers. It also opens the door for niche streaming services to draw in talents, like Kick, which signed a $100 million deal with Twitch celebrity Felix “xQc” Lengyel.
These mega deals are costly and aren’t bringing in enough viewers to justify their expense. The exclusivity clause harms influencers by restricting them to a single platform. In 2018, Twitch spent $90 million to stream Activision Blizzard’s Overwatch League esports coverage exclusively. After the contract ended, the stream moved to YouTube, where it was met with depleted viewership.
Clancy says Twitch will revamp its contracts, offering only a select few custom deals and adopting standard terms from now on.