Got Twitch? If You’re A Music Artist Looking To Monetize, This New Data Says You Should – Forbes

After a year-plus of lost touring income, music artists are looking for ways to pay the bills, even as live music begins to resurface. With more than 15 hours average weekly usage by subscribers and a trio of paths to monetization, gaming-centric platform Twitch just may be an artist’s best friend. That is, if the artist is willing to put in the work to bring their loyal fans to the platform and super-serve them once they arrive.

This according to a new data-heavy report from Will Page, former chief economist at Spotify and author of the new book Tarzan Economics, who compiled original numbers as well as input from Twitch, global MRC Data, ChartMetric and Midia Research, and shared his findings with me. The full report can be accessed here.

Twitch Rockonomics focuses on creators on Twitch, a distinction from DJs who spin tunes copyrighted by others. It makes a case for musicians’ ability to activate their truest fans, and in doing so line their pockets compared to Spotify, YouTube, TikTok and other options. And it includes case studies of both established musicians, like Grammy-winning producer RAC and Trivium vocalist/guitarist Matt Heafy, who have migrated to Twitch, and those who’ve come up through the platform, such as gaming composer Laura Shigihara.

Usage Numbers

Those comparing subscriber numbers alone initially might be quick to dismiss Twitch. The platform doesn’t have the subscriber numbers of Spotify, which in February reported 155 million premium subscribers and 345 million monthly active streamers. The report would counter that those naysayers are missing the point. With 9.5 million active streamers in February 2021, according to Twitch Tracker, Twitch offers a long game that isn’t about numbers, but rather usage and engagement.

At an average of 15.8 hours per week, Twitch users spend almost three times as long on the site as do subscribers of YouTube, which clocks in at 5.7 hours/week, according to Midia Research, which provides forecasts, integrated audience insights and global trend analysis. Spotify users spend an average of 6.4 hours per week and TikTok 1.9 hours per week, according to Midia.

Twitch’s channel-based format enables musicians to establish deeper connections with, and directly receive money from, dedicated fans. To boot, the report notes, those who do subscribe tend to engage on desktop screens, a differentiator from the mobile devices consumers tend to use for other services, which tends to lead to shorter engagement.

Money In, Money Out

Optimizing the passion of devoted fans is the key to artists’ ability to monetize, says Page, who points out the payout on most music streaming services is worse than consumers may realize.

“The artist does not see half a cent on a stream. Let’s just be clear here. If it’s half a penny per stream and it’s a 20 percent royalty and there’s four members in a band and a manager to be paid, then one member of that band will see one fifth of one fifth of half a cent per stream,” he says.

Whereas the majority of music streaming platforms offer two revenue streams—subscriptions and/or ads—Twitch incorporates a third option that enables fans to support artist directly on the service. “They remove the ceiling on how much you love your artist. Streaming hasn’t done that since 2002,” says Page.

Twitch isn’t the only game in town enabling fans to directly show their favorite artist some monetary love. Bandsintown, SoundCloud and Instagram are among services that currently enable direct fan tipping.

But its user-centric, artist channel model, which fans can access via one of three monthly tiers—$4.99, $9.99 or $24.99—combined with its Bits tipping program and ability for artists to recoup their money faster is a winning formula, says Page.

How fast? Twitch commits to paying artists within 30 days after the month ends, the report notes, vs. conventional pro rata-based music streaming platforms where lag time can extend to six to eight months. 

“A, you own your money and B, you see that money a lot faster. In terms of distinctions, that’s quite a big one,” he says. “It may not pay your bills, but at least you own it and you see it faster.”

Making It Work

Apparent from the six case studies in the report—Aeseaes, Matt Heafy, mxmtoon, RAC, Sereda and Laura Shigihara—is that each artist will experience a different scenario on Twitch depending on whether they are newly building their fan base or are migrating to the platform as an established name—and how much sweat equity they’re willing to put in.

“It takes time to make it work. You’ve got to grind away, but once you’ve got it up and running, then you’ve got something really quite powerful,” Page says. “It’s not like Spotify or Apple Music where you can make money while you’re asleep. It’s dependent on interaction.”

Twitch’s monetization approach offers scope to creators, according to Rockonomics, which places at 15 cents the average income artists receive from each hour that one fan spends watching their channel. Based on the musician’s supply, and fans’ understanding of how to support their favorite artists, that number can jump to 25 cents for established channels that have had more time to generate traction, with some scaling up to 75 cents, Page reports.