Twitch Rolls Ad Guideline Updates
In a surprising turnaround, Twitch, the popular live-streaming platform, has decided to rescind changes it had recently announced to its branded content guidelines. The reversal came only a day after the new rules had been revealed, following a vociferous backlash from the streaming community.
Last Tuesday, Twitch unveiled a set of updates to its branded content guidelines – the rules that govern how streamers can display sponsorships, endorsements, and other paid promotions. The changes were met with immediate criticism, leading to a swift retraction by the company on Wednesday afternoon.
A company statement read: “Yesterday, we released new Branded Content Guidelines that impacted your ability to work with sponsors to increase your income from streaming. These guidelines are bad for you and bad for Twitch, and we are removing them immediately”.
The proposed changes would have imposed strict limits on in-channel sponsorships, which many Twitch streamers heavily depend on for income. These restrictions were targeted at numerous ad formats popularly embedded in live streams, threatening to significantly impact the financial health of streamers.
The timing of these changes, set to go into effect on July 1, less than a month from the announcement, would have disrupted existing sponsorship deals for many top streamers. The abrupt shift in policy led to a rapid and widespread backlash. Large channels and smaller streamers alike expressed their dissatisfaction, pointing out the potentially damaging impact on their ability to monetize their platforms.
Critics also accused Twitch of trying to insert itself further between streamers and their sponsors. The streaming platform, owned by Amazon, takes a 50% cut of creator earnings through its standard revenue-sharing agreement. It has no stake in the profitable deals streamers negotiate directly with sponsors and advertisers. The proposed changes were seen by many as a move to fill this monetization gap, given the challenging economics of streaming that force most serious streamers to rely on ads and sponsors.
Among the now-retracted changes, streamers would have been prohibited from displaying “burned-in” ads, which are advertisements integrated directly into streams via display banners, video commercials, or audio. The only exception would have been small display ads taking up less than 3% of the screen. This stipulation caused widespread confusion, with some streamers pointing out that even Twitch’s own example of a “good” ad exceeded this limit.
The roll-back of the branded content rule changes comes after another controversial decision last year. Twitch had announced plans to phase out the 70/30 revenue split that allowed top streamers to retain more of their earnings. While the streaming community had long called for a more favorable ratio, the company had outlined a vision that would have everyone on a less lucrative 50/50 split.
With these recent upheavals, it remains to be seen how Twitch will navigate the demands of its community while maintaining its commercial objectives.
