Understanding The Twitch Branded Content Fiasco

The recent Twitch branded content rules update ruffled feathers among some affiliates and partners. After the company sent an email out to users, many streamers took to Twitter to express confusion or outright dismay at some of the terms. 

However, Twitch quickly issues an apology and correction on Twitter regarding the new terms, calling them vague and overly broad before repealing them entirely. So what exactly was all the fuss about?

Understanding Revenue On Twitch

Twitch is one of the premier places to earn money as a livestreamer. While the average money earned per streamer on the platform is likely very low, it's not unreasonable for mid-tier streamers to earn a living wage exclusively from livestreams. And then there are the top-tier streamers who generate millions in revenue every month. 

Once you reach certain viewership milestones on Twitch (usually achievable within a month or two), you qualify to earn money directly from the platform. This comes from a handful of different sources, with the primary ones being subscription revenue from viewers, "bits" from viewers (like digital tips), and ad revenue from Twitch's ad share program. 

However, there are also a lot of opportunities to earn revenue from third party platforms while you stream. These includes directly accepting tips via platforms like PayPal, selling your own merchandise, or doing sponsorship and brand deals on your streams.

And that last one — sponsored streams and brand deals — is where the concern cropped up.

What Was In The Twitch Branded Content Terms Update

Twitch's new branded content terms included limitations on things like how big logos can be on your screen and prohibiting "burned in" ads. Streamers weren't allowed to make logos larger than 3 percent of the screen or run their own ads (video or audio) in their stream. 

The policy fairly plainly stated, "We recognize that streamers want to collaborate with brands, but as outlined in the Terms of Service, we maintain the exclusive right to sell, serve, and display advertisements on the Twitch Services." 

Most of the things a streamer is familiar with when it comes to branded content was still fine according to the new terms. These include:

• sponsored "panels" on your channel page (which appear below a stream)
• unboxing, reviewing, showcasing products on your stream
• placing products in the background of streams
• including links to outside pages and products in your chat etc.
• playing sponsored games

However, Twitch also made new rules on what you can't do as a streamer. These limitations seemed to be aimed at preventing streamers from allowing brands to work around Twitch's own advertising mechanisms. They include:

• brand logos must be 3 percent or less of the screen size
• streamers can't insert their own video ad recordings into a stream (via things like OBS)
• streamers can't insert their own audio ad recordings into a stream
• streamers aren't allowed to place ad banners on their stream

How Twitch Responded To The Backlash

In the hours following Twitch's announcement, a lot of streamers did what a lot of streamers do quite well — took to Twitter to complain. While complaining about Twitch has become somewhat of a streamer pastime, plenty of users brought up great points about how these guidelines had potentially far-reaching implications. One of these includes charity streams, which often rely on strong, burnt-in branding to make users aware of what they're supporting. 

A few hours after the branded content terms went out, Twitch responded with a tweet thread apologizing for language it deemed as "overly broad." 

"Today’s branded content policy update was overly broad," the company tweeted. "This created confusion and frustration, and we apologize for that. We do not intend to limit streamers’ ability to enter into direct relationships with sponsors, and we understand that this is an important part of how streamers earn revenue. We wanted to clarify our existing ads policy that was intended to prohibit third party ad networks from selling burned in video and display ads on Twitch, which is consistent with other services. We missed the mark with the policy language and will rewrite the guidelines to be clearer. Thank you for sharing your concerns, and we appreciate the feedback. We’ll notify the community once we have updated the language."

Not long after this, Twitch announced it was removing the terms entirely.

So Should Streamers Worry? 

The short answer is, no, most streamers should not worry about the Twitch branded content guidelines since, well, they don't exist anymore. That said, whether Twitch would've chosen to enforce these terms against individual streamers like many on Twitter feared is up for discussion. Most companies publish these types of Terms of Service updates to make sure they're protecting their assets — whether or not they would realistically choose to enforce this against, say, somebody trying to run one of those streams sponsored by Hello Fresh to 20 concurrent viewers, is an entirely different reality.

As Twitch states, these terms are fairly consistent with other services and mostly meant to keep other ad companies from circumventing Twitch's own opportunity to earn ad revenue. But that doesn't mean it's not concerning that the company would put out this kind of language without thinking about the ways streamers would immediately associate it with their own streaming practices. 

The misstep hasn't stopped other platforms (like Kick) from capitalizing on the backlash, at least in the social media space. And it certainly hasn't helped repair some of the relationships between Twitch and disaffected streamers.