Twitch is lowering subscription prices — but says streamers will earn more money

Twitch is announcing a big change to subscription prices — but not for users in the US. Most countries outside of the US will be getting lower prices that will be localized to their specific country, starting with Turkey and Mexico on May 20th. Those lower prices will mean less money for streamers, but Twitch believes they’ll translate to more subscribers and higher earnings in the long run.

Right now, the most affordable Twitch subscription, which lets fans pay streamers and get perks like custom emotes, currently costs $4.99, a price that is currently translated into local currencies around the world. That translated price can be prohibitively expensive to some Twitch users, however, Mike Minton, Twitch’s VP of monetization, told The Verge in an interview this week.

The upcoming change is intended to make subscriptions more affordable for Twitch’s global audience. And early tests from Twitch seem promising: the company tested localized pricing in Brazil and saw that streamer revenue and total subscriber count “more than doubled,” according to a blog post.

But Twitch is also preparing for a potential scenario where streamers could see their revenue fall as a result of the price changes, because streamers will need more subscribers — potentially a lot more — just to match their current earnings. If a streamer’s revenue falls below their usual baseline (which Twitch calculates for every streamer) after the localized prices roll out, Twitch will pay that streamer a “revenue adjustment incentive” to help make up the difference.

Here is a basic description of how the incentive will work, according to Twitch:

Twitch will cover 100% of baseline channel and Prime sub revenue (if needed) for three calendar months, including the month of the price change. After that, we will slowly decrease incentive payments by 25% every three months over the following 9 months, totaling a 12-month period of providing revenue adjustment incentives.

You can read the full details about the incentive here.

The rollout starts first with Turkey and Mexico, where prices for a subscription will be lowered to 9.90 Turkish lira (the equivalent of $1.20) and 48 pesos (the equivalent of $2.41). Twitch plans to bring localized pricing to “most countries in Asia, Latin America, the Middle East, Africa, and Europe starting in Q3 2021,” according to Twitch’s blog. Localized pricing will carry over to the two more expensive tiers of subscriptions and for gift subscriptions as well. And prices won’t be raised anywhere, just lowered.

The changes come as many platforms are looking to give their creators better ways to monetize their followings. Twitter is testing a new Tip Jar feature and will begin rolling out ticketed social audio rooms in the coming months, and Clubhouse now lets people pay creators directly (though not everyone can receive payments yet). While Twitch isn’t announcing any new monetization features today, the lowered subscription prices could lead to more people paying streamers directly.