In 2022, Twitch made a decision that spawned the biggest competitor the service has ever come up against, and yet, by most accounts, it was the right decision. Read on to discover why this is the case and what it means for the future of streaming.
On September 20th, 2022, Twitch decided to ban the most egregious forms of gambling off of their site after an incident where a streamer scammed his audience for $200,000. This began a spiral of events culminating in the departure of Twitch’s biggest streamers for an eight-month-old upstart, Kick.
During early- to mid-2022, gambling had become a primary trend for big streamers, a new method for them to entertain and interact with their chats. Gambling streams were bringing in millions of viewers and only growing with time, but it was only a matter of time before the first major incident occurred.
Abraham Mohammed, who went by “Sliker”, was a Twitch streamer who amassed 400,000 subscribers from gambling-based content. As gambling content like his on Twitch continued to gain traction, Mohammed came out and admitted that he had conned viewers and friends alike for $300,000 in the midst of pressure from various sides. He stated his gambling problems started with betting on matches and opening cases on CS:GO.
As a result, this moral dilemma was thrust into the limelight to a degree that Twitch was unable to ignore. Its decision? To ban content including “slots, roulette, or dice games that aren’t licensed either in the U.S. or other jurisdictions that provide sufficient consumer protection,” per the company’s public statement.
Twitch also reinforced its stance on prohibiting the dispersal of sharing links or referral codes to different gambling sites. The companies who took the biggest hit when this decision was made were online gambling companies like Stake.com, Rollbit.com, Duelbits.com, and Roobet.com, an impact to keep in mind for later.
Kick’s Origins
Banning popular forms of gambling would cause major streamers to lose out on thousands of dollars in revenue a month, enraging these gambling communities. One streamer who was especially affected by these changes was Trainwreckstv.
He quickly began to champion the campaign against what he considered unfair targeting of gambling content creators in general, seeing the community as separate from what scammers such as Mohammed did with similar content.
It didn’t take long for Trainwrecks to decide to move his community to the newly founded streaming platform Kick, which was funded by his long-term sponsor, Stake.com.
After relocating, Trainwrecks advised Kick on how to start taking market share away from Twitch. At Trainwrecks’ advice, Kick decided to go with a 95-5% split in revenue between streamers and the platform. This directly opposed Twitch, who has been focused on splitting the profits strictly 50-50 with its streamers.
Reception to the 95-5% split has been tremendous, giving non-gambling Twitch streamers good reason to make the jump as well. Plenty of supporters have switched for this reason, although recent criticisms about this financial structure’s longevity have emerged.
In a sense, though, it doesn’t matter how financially self-supportive Kick is. Stake reported $2.6 billion in gross revenue in 2022, so for now, Stake can simply view Kick as an advertising cost. If Kick grows exponentially, the possibility exists that Stake will adjust their revenue splits to keep up with growing interest and costs and view Kick as another revenue stream, but that’s not a necessity. Of course, every new platform or service launches with an amazing offer, but few can or will maintain that same offer years down the line.
Guidelines and Restrictions
The community guidelines on Kick are extremely flexible when compared to both Twitch and YouTube, their largest two competitors in the space. Kick streamers have flexibility on a wide spectrum of topics that would normally be too risky for Twitch or YouTube to include in their Terms of Service.
For some creators, this is an extremely attractive prospect, while to others it could seem to breed hostility and an unsafe environment for a younger audience. Ultimately, every creator/streamer should stream to whatever platform best fits their personal brand and content strategy. With this in mind, Kick is securing a surprisingly wide target audience of streamers who fall somewhere between between Onlyfans and Twitch in terms of the type of content they put out and their willingness to push the envelope for their viewers.
Because of these loose guidelines, creators large and smaller have migrated en masse to Kick. However, even getting a handle on their current stars has proved to be challenging. In a recent example, XQC was signed to Kick in a historic $100 million two-year, non-exclusive deal. Soon after, he streamed the movie The Dark Knight directly to his audience, a strict violation of DMCA laws. He was quickly told by Kick moderators to stop the stream and delete the VOD, but the damage was done once one of the top streamers on the platform had attempted to take advantage of a new platform.
XQC got a slap on the wrist because of his name and importance to the platform, but a smaller streamer would likely have received a much harsher punishment. Adin Ross similarly used Kick to stream the entirety of the Super Bowl to 110,000 viewers against the wishes of the NFL. If creators keep taking advantage of the platform, there will be legal ramifications for the company or users very similar to those Twitch and its users have encountered.
The Kick Terms of Service state that “Company takes no responsibility and assumes no liability for any User Content that you or any other User or third-party posts, sends, or otherwise makes available over the Service. You shall be solely responsible for your User Content and the consequences of posting, publishing it, sharing it, or otherwise making it available on the Service, and you agree that we are only acting as a passive conduit for your online distribution and publication of your User Content.”
This means that by using the platform, you are taking on almost all legal liability for your content that could potentially breach DMCA laws. Before streaming on Kick, it is highly recommended to read the Terms of Service, especially Section 2.2 on Intellectual Property Rights. The current culture on Kick shows signs of streamers getting quick paydays and bouncing under DMCA pressure, a potential long-term issue if not dealt with in the near future.
Cracks in the System
Besides legal issues, there are monetary issues at play. Twitch made $2.8 billion in revenue in 2022 but is still not considered profitable and hasn’t been since the Justintv days. The costs on the platform are only increasing over time.
Recently, Twitch made the decision to institute 70/30 revenue splits to creators who meet the stipulations of 351 subscribers (not including Amazon Prime or gifted subscribers). This split is only available until a creator reaches the $100,000 mark, at which point the split will return to 50/50. More specifics on these decisions from Twitch can be found via this article from Forbes, which we highly recommend.
If Kick grows as exponentially as it is predicted to in the next year, the costs of running the platform will skyrocket. Stake made approximately $2.6 Billion in net revenue in 2022, so if Kick were to grow to even a quarter of Twitch’s size, their cost to run the platform could realistically equal approximately half of Stake’s earnings last year. The most telling signs of longevity will be when we receive earnings reports from Twitch, Stake, and Kick respectively for 2023.
The Harrowing Truth
As economic times remain uncertain, companies throughout the world will naturally look to cut costs and make as much profit from their products as possible. Twitch has already laid off hundreds of employees in the last year alone. Both Twitch and Kick are almost guaranteed to lose money on their products because they both are nearly identical in business model and user interface.
The main hope Stake has for Kick is that it will lead to more conversion revenue on gambling. The irony is that considering how much money they are spending to make Kick successful, the entire operation is still a huge gamble in itself.
As a creator, it is important to weigh the pros and cons of each streaming situation and follow what you believe is best for your stream community, personal values, and long-term goals.
With that end in mind, here is a simple summary of each of the main three platforms you have to choose from. YouTube is the best discovery ecosystem due to the integrated video side the platform is famous for. Twitch has the longest-standing community and most polished features for streamers. Kick has the highest earnings potential for streamers, and it’s not particularly close. Choose wisely… or don’t, and choose all three. It’s never good to have all your eggs in one basket, as Mixer users can attest to.
At Creatorcology we understand that it is difficult to scale your content with your growth whether you are a streamer, YouTuber, or social media influencer. No matter what platform you use on social media, our business focuses on providing solutions to the technical problems of being a creator. This means you can spend your time developing unique content and interacting in and around your own communities. If you are interested in our services, you can contact us through any of our social media platforms or via the contact information on our website.
