Live streaming has been one of the internet’s most popular things for several years.
The leading platform for live streaming is Twitch, which has been running for years, giving people a platform to stream and watch.
They have a massive market size and hundreds and thousands of people logging in every day.
Since they are quite popular and they are a massive platform, you might wonder how well they pay their streamers and if the company is profitable.
If you are thinking of becoming a streamer on Twitch, profitability is one of the leading factors because you’ll be spending a lot of time and maybe even money.
This article will take a look at Twitch’s profitability, whether Amazon owns Twitch and how they make their money, and how much they pay their streamers.
How Much Do Twitch Streamers Make?
The income of Twitch streamers depends on how popular they are, their fanbase, and the average viewership they have.
As Twitch’s payment program is slightly different than most other streaming platforms like YouTube, the payment procedures and the systems are also different.
Most Twitch streamers rely on external income sources such as sponsorships, affiliates, merch sales, and many others.
On average, a successful Twitch streamer earns between $3,000 to $5,000 on a monthly basis from only subscriptions and ad streaming.
Most streamers make way more than that, hitting $10,000 or more through the external sources we mentioned before. However, not everyone is the same, as this is just an average number.
Small streamers can make three digits, or some can’t even hit the withdrawal threshold of $100.
On the other end, the most successful streamers earn tens of millions of dollars each year through both Twitch itself and the deals they make with brands.
It all depends on the number of your viewership and whether you can hit that average viewer number most of the time.
How Do You Make Money on Twitch?
As a streamer on Twitch, you might think that you will get paid directly by Twitch without any extra work.
That is not entirely true because the only money you will get through Twitch without extra work is ads. And ads pay extremely low, most of the time not even helping you hit the threshold if you are a small streamer.
The biggest payment option Twitch offers is through subscriptions, and people need to subscribe to you for that. All other means are based on your brand as a streamer.
These other streams of income generally pay much more than subscriptions. Here are some of the ways that streamers on Twitch make money:
Advertisements
This is generally the norm for YouTube because YouTube’s main way of paying their content creators is this.
However, with Twitch, this is a little different because you have to show ads in the middle of your stream. Most streamers don’t choose this option.
But, there are some who choose to do it. The payment for showing ads varies between one cent to one dollar per view per ad.
Subscriptions
Subscriptions are the biggest source of revenue both for Twitch streamers and for Twitch itself because they get their commission from it.
Subscribing to a streamer and following them are two different things because you have to pay to subscribe.
This is generally to help them financially and get access to exclusive content and other perks.
The price of a subscription varies between $5 to $25 per month. This money is split evenly between the streamer and Twitch itself.
So a streamer earns between $2.5 to $12.50 per subscription and per month.
Curious about how Twitch’s subscription system operates and the cut Twitch takes from subscriber payments? Our article How Much Does Twitch Take From Subs takes a deep dive into Twitch’s subscription revenue model, explaining the revenue share between Twitch and streamers, the impact of different subscription tiers, and any additional costs associated with subscriptions.
Donations
One of the other most frequent methods is through donations. This is purely a viewer of the streamer wanting to help the streamer financially and sending a literal donation.
The donation is a monetary one, and the streamer gets the full amount except for some commissions of the payment systems.
Merchandise sales
After the streamer gains a following and creates a brand around their name, they can utilize this brand in various ways.
One of the ways to utilize this is through merchandise sales. There are unlimited options as to what this merchandise generally is, but it could be anything from a mug to a t-shirt.
Sponsorships
As the amount of viewers increases, brands realize this and come to the streamer to use their products in their streams.
They send the streamers their products or pay them a certain amount to talk about the product or the service on their streams. This is also one of the methods that pay the most to the streamers.
What Are Twitch’s Expenses?
We broke down a lot of information to determine Twitch’s expenses.
- Total Stream Hours: 432,000,000 Hours
- Total Data Per Hour: 4.175GB Ingest | 2.64GB Origination
- Total Hours Watched: 11,000,000,000 Hours
- Live Origination Rate: $0.05/GB
- Live Ingest Rate: $0.03/GB
(Stream Hours (432M) x 4.175GB) x $0.03 Ingest Rate = $54,108,000.
(Total Hours Watched (11B) x 2.64GB) x $0.05 Origination Rate = $1,452,000,000.
So after this calculation, the total comes down to $1,506,108,000. However, this is at a price that anyone can access via Media Package. Twitch gets it for a reduced price, most likely, so after deducting 20%, the total comes down to $1,204,886,400.
Content Storage (VODs)
The storage and streaming of video content add greatly to the cost, but by using an Amazon AWS Pricing Calculator, we can come up with the cost easily.
So for 432,000,000 hours streamed, at 4.175GB of total video footage, we get 1.8B GB of data.
Based on this, we get $45,000,000. That’s the cost of storage for Twitch.
Rent, Staff, etc.
Twitch will have approximately 2100 employees as of 2023, after the layoffs of 400 employees out of 2500. Let us now multiply the average salary of tech employees ($135,000). So Twitch’s total expenses on Staff come to $283,500,000.
Twitch signed a 10-year lease back in 2016 for a 185,000 Square Feet office at 350 Bush Street for $62/sq foot (excluding tax, maintenance, insurance, etc.). Rounding this up, the rent cost comes down to $15,000,000 approximately.
Now there are additional associated costs such as travel, healthcare, etc. And since there is no way to find an actual number for this data, let’s round up the previous number to $100,000,000.
Twitch, in recent years, has signed a lot of exclusive contracts with different streamers, so we are just going to add an additional $100,000,000 on top of that.
So the grand total of Twitch’s expenses comes down to an estimated $1,900,000,000.
What is Twitch’s Revenue?
Here’s the revenue of Twitch over the years:
Twitch annual revenue From 2016 t0 2022 ($mm)
| Year | Revenue ($mm) |
|---|---|
| 2016 | 275 |
| 2017 | 300 |
| 2018 | 880 |
| 2019 | 1230 |
| 2020 | 1890 |
| 2021 | 2675 |
| 2022 | 2800 |
Is Twitch Profitable As A Company?
No, Twitch has never been profitable, not even since its Justin.tv days. The platform’s costs are too high, and some creators believe that the current payments they receive are already excessive.
Did Twitch ever generate any profits? No, Twitch has not reported any profits despite its revenue growth. While the platform generates revenue through various sources, it has not demonstrated profitability.
You might be wondering how Twitch is paying all that money to their streamers and if there is a danger of them going bankrupt.
The last revenue numbers show that there is no such risk for now because Twitch had a $2.8 billion revenue in 2022.
The numbers have been increasing steadily for the last eight years, increasing from $275 million in 2016 to $2.8 billion in 2022.
This shows that Twitch is on steady growth and just keeps on increasing its revenue, which means more money to the streamers.
The last report shows that they had 2.8 million concurrent viewers in 2022, which saw a 6% decrease from 2.78 million in 2021. However, this didn’t affect their revenue numbers.
Overall, Twitch is doing well on its numbers, and it shows no sign of slowing down.
This gives a confident view to the streamers, and there might even be increases in ad and subscription revenues for streamers.
Is Twitch Profitable For Amazon?
Amazon acquired Twitch in 2014 for $970 million. Ever since, the revenue of Twitch has been increasing positively, which you can check from one of the tables shared below.
Last year in 2022, Twitch made a revenue of $2800 million which is way past Amazon’s acquisition cost.
Not to mention Twitch receives millions of view hours, its most recent being 22.4 billion hours of streaming in 2022.
Twitch, as such, generates a lot of money for Amazon from ads, partnerships, etc., and the company has high hopes for Twitch in the future.
Tips to Maximize Your Twitch Income
You might be a Twitch streamer or want to become a Twitch streamer, and even though the normal efforts can pay well, you can always maximize your efforts.
This way, you can increase both your external and internal revenue from Twitch. Here are some of the tips you can utilize:
- Use your community: Your viewers are also your community. Set up social media accounts, share things, and utilize your community as much as you can. This will increase your visibility and the amount of deals you are getting.
- Do as much as you can on different platforms: Most of your money will come from sponsorships or affiliate partnerships. To get the maximum amount possible from these deals, you need to use different platforms to be able to do different types of content.
- Offer exclusive content: Offer special content to those who subscribe or make a certain amount of donations. This could be a special stream, extra video, or anything else. The idea is to make people curious about what you are doing and either donate or subscribe.
Who owns Twitch?
Currently, Amazon owns Twitch, and they bought the company in August 2014 after winning over an agreement with Google and Yahoo.
However, the company was first an independent company founded by Justin Kan and Emmet Shear.
Twitch initially started as Justin. Tv with several different contents live streaming categories, but their gaming category took off substantially.
So the company decided to spin off TwitchTV for gaming, and later, they shut off Justin. Tv and changed Twitch to Twitch Interactive in 2014. The same year, Amazon bought the company for $970 million.
Twitch Key Statistics
Twitch Users Statistics
There were 2.58 million concurrent viewers on Twitch in 2022, showing a 6% decrease from 2021.
Here are the annual average concurrent viewers of Twitch between 2015-2020
| Year | Concurrent viewers (mm) |
|---|---|
| 2015 | 0.53 |
| 2016 | 0.61 |
| 2017 | 0.74 |
| 2018 | 1.07 |
| 2019 | 1.26 |
| 2020 | 2.12 |
| 2021 | 2.78 |
| 2022 | 2.58 |
Twitch streamers Statistics
In 2022, 7.6 million Twitch accounts streamed once a month.
| Year | Streamers (mm) |
|---|---|
| 2015 | 1.7 |
| 2016 | 1.8 |
| 2017 | 2 |
| 2018 | 3.3 |
| 2019 | 3.6 |
| 2020 | 6.9 |
| 2021 | 9 |
| 2022 | 7.6 |
Twitch hours watched Statistics.
In 2022, Twitch users streamed for 22.4 billion hours.
| Year | Hours watched (bn) |
|---|---|
| 2012 | 0.2 |
| 2013 | 1.7 |
| 2014 | 2.9 |
| 2015 | 4.7 |
| 2016 | 5.2 |
| 2017 | 6.5 |
| 2018 | 9.3 |
| 2019 | 11 |
| 2020 | 18.6 |
| 2021 | 22.8 |
| 2022 | 22.4 |
Twitch age demographics
See that two third of Twitch users are under 35 years of age, and only 3% of users are aged 55 or above.
| Age | Percentage of users |
|---|---|
| 16-24 | 41 |
| 25-34 | 32 |
| 35-44 | 17 |
| 45-54 | 7 |
| 55+ | 3 |
Twitch Gender Demographics
There are more male audiences on Twitch, but the gap between female and male audiences has reduced over the years:
| Gender | Percentage of users |
|---|---|
| Female | 35 |
| Male | 65 |
What Are The Most Followed Channels on Twitch?
Here’s a list of the most followed channels on Twitch in 2022:
| Account | Followers (mm) |
|---|---|
| Ninja | 18.2 |
| auronplay | 12.8 |
| Rubius | 11.9 |
| Tfue | 11 |
| xQc | 10.8 |
| ibai | 10.3 |
| shroud | 10 |
| TheGrefg | 9.9 |
| pokimane | 9.1 |
| sodapoppin | 8.7 |
Which Are the Most Viewed Games on Twitch?
Here’s a list of the most viewed games on Twitch:
| Game | Views (bn) |
|---|---|
| League of Legends | 51.3 |
| Fortnite | 29.1 |
| Grand Theft Auto V | 25.7 |
| Counter Strike: Global Offensive | 23 |
| DoTA 2 | 20 |
| Hearthstone | 13.8 |
| Minecraft | 11.8 |
| World of Warcraft | 11.7 |
| Overwatch | 8.2 |
| Tom Clancy’s Rainbow Six Siege | 4.4 |
Conclusion
Twitch is one of the biggest live stream platforms in the world, and it’s probably the biggest in the gaming world.
Even though it started as a gaming platform, now the platform adheres to many live-streaming categories.
It is possible to make good money on Twitch as a streamer. An average streamer makes about $3,000 to $5,000 monthly with only subscription and ad revenues.
It opens doors for many other income streams for streamers, such as affiliates, sponsorships, merchandise, and others.
Many elite Twitch streamers now make millions of dollars every year from all their income sources combined.
The company is also doing good financially, hitting $2.8 billion in revenues in 2022, and the forecasts only show that it will keep increasing.
FAQ
Is it possible to lose money with Twitch?
With Twitch, you don’t need to make upfront financial investments. It’s better if you invest in some graphical work and stuff on your live stream, but it’s not necessary.
You might fail as a streamer and not have any viewership, and in that case, you don’t lose anything but your time.
Can Twitch go bankrupt?
Twitch can go bankrupt just like any other business, but their financials show that they are doing a good job, and that is not likely.
In case Twitch goes bankrupt, you will likely not get your payout and lose the money you didn’t withdraw yet.
However, all other external income sources will stay as is as it’s not directly connected to Twitch.
How certain is it to make money from Twitch?
It depends on you as the streamer. How well can you attract people, and what are your viewership numbers?
However, the odds are not very high, as many who start streaming stop without making any actual money.
What is Twitch's worth?
Twitch is no longer listed on the stock market as it is included under Amazon’s stock, so there is no way to confirm the net worth of Twitch. However, as of June 2023, Amazon is worth $1.24 Trillion.
Sources
https://brave.com/learn/how-much-money-do-twitch-streamers-earn/
https://en.wikipedia.org/wiki/Twitch_(service)
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.