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"if Twitch can boost income in more imaginative, creative and bolder ways, there is no need to squeeze creators."

Twitch,2022, a live streaming platform with more than 30 million online users a day, has had a tough year. In late March, Twitch announced that it would cut 9000 jobs after its parent company, Amazon. The company is being hit hard, and more unrest is likely to come.

In September last year, a Twitch anchor admitted that he had used the trust of fans and peers to borrow money everywhere to satisfy his gambling addiction. Many people are angry about this. Twitch has always had a gambling live zone, and many anchors will spend a lot of money online in casinos and broadcast the process live to attract viewers. Under the pressure of public opinion, Twitch finally launched a long-awaited measure aimed at restricting gambling. Not long after, a detailed investigative article pointed out that Twitch failed to eradicate the induction, harm and sexual exploitation of children on its platform. Twitch also announced that it would take more percentage of the subscription revenue of the head VJ, further intensifying the contradiction between the platform and the VJ.

Twitch is going through an eventful period.

Previously, Twitch's cut for head creators was 30%, but now this proportion only applies to the first $100000 earned by VJs. In most cases, the cut has risen to 50%. In mid-March, Emmett Hill, a longtime chief executive, announced his departure. Just a few days later, Dan Clancy, the new CEO, confirmed that the company would lay off 400 of its about 2500 employees.

Twitch has to pay a huge cost to provide real-time video content to millions of users around the clock. With the continuous development of the company, operating costs are becoming higher and higher. However, Twitch's excessive pursuit of profits has confused and disturbed anchors, users and employees. "Twitch is trying to achieve growth and profitability." "so companies are trying to recruit people with similar backgrounds on their resumes," said one employee, who spoke on condition of anonymity. "the problem is that some of the practices that work in other companies may not apply to Twitch."

In 2022, Twitch also did some commendable things. For example, the live video of the Buffalo supermarket shooting that killed 10 people was quickly deleted, new measures to protect children were introduced, and anchors were provided with tools to block Internet sprinklers and hate speech. But in the eyes of many users and anchors, the live streaming platform, which surged in the early stages of the epidemic, seems to be at a low ebb.

Through conversations with former Twitch employees and current employees, we can see that most of the respondents criticized Twitch management and the direction they planned for the company.

Whether it's the content promoted by the platform or the income distribution policy, Twitch anchors are not satisfied with the performance of their predecessor CEO. "when was the last time you saw Twitch introduce something that would revolutionize the online content community, creator ecology, or content economy?" Zakary Diaz, former director of emerging content at Twitch, pointed out bluntly, "I don't deny that Twitch has developed a large number of high-quality products and is one of the largest content distribution platforms in the world, but little attention has been paid to the infrastructure of the platform."

Twitch declined to comment on the specific views of its employees or on the broad challenges facing the platform.

The Twitch bet on creators does what most companies can't imagine: getting many users who are usually reluctant to pay for content to subscribe to their favorite anchor channels. Users can subscribe to support anchors, which in turn supports Twitch-- over time, which has gradually become part of the Twitch culture.

"subscription service is one of the best business models on the Internet and an important part of Twitch's profit strategy, which can be seen as the company's DNA," said a former Twitch employee. "

In 2019, two Twitch star anchors, Ninja and Shroud, signed an exclusive agreement with Microsoft's live streaming platform Mixer, and Twitch traffic remained stable after they left. In 2020, the number of Twitch views soared to an all-time high.

The Mixer was shut down in 2020 and the two men then returned to Twitch. Hill and other executives decided to change their strategy and stop spending a lot of money to sign up for top anchors and offer them relatively cheap contracts, according to several former and current employees. "this is a gamble against content creators." A former employee said.

According to some respondents, Twitch executives began to see the departure of star anchors as an opportunity. "to be honest, Twitch wasn't too depressed when the head anchor left. Once the popularity of content creators reaches their peak, they either leave or they don't broadcast as often as they used to. This gives other creators a chance to be at the forefront." Another former employee said, "as Ninja left, we saw five or six new stars coming to the fore."

Kai Cenat is the hottest new star in 2022, attracting more than 300,000 paying subscribers, a figure that breaks Twitch's historical record. However, a working employee revealed that the company did not invest much in him. "We didn't provide him with a special agreement, and it was crazy that he became the anchor with the largest number of subscribers on the platform just a year later."

With his unique musical style and appearance, Kai Cenat quickly became popular on the social platform. One former employee said that his team had tried to persuade Kai Cenat to move to Twitch, but he still felt that his team was going against the trend and could not get full support. Twitch recruited Kai Cenat just to bring some female and colored anchors to the platform. He believes that if Twitch is willing to invest more in this area, it will be even more successful. "if Twitch had worked harder to expand the market to attract a wider range of users, they would already have 10 anchors like this."

Executives who are out of touch with reality are, in a sense, too large for Twitch to take good care of all its co-creators. In the view of many people, the problem of the direction of the company is more serious.

According to several former and current employees, the company has hired a large number of new executives in the past few years, but their new rules and management style have led to a growing number of anchors, users and employees dissatisfied with Twitch.

In the interview, several interviewees mentioned Constance Knight, a former vice president of global creators. She has worked on several well-known social platforms and joined Twitch in July 2021, where her main responsibility is to maintain relationships with creators who work with Twitch, including star anchors on the platform.

Some former employees said they felt Knight didn't care about the anchors' needs at all. "the only direction she told us was to cut costs, cut costs, cut costs."

During the leadership of Nate, the team lost its way. In January 2022, Knight wrote in an email to team members that anchors should not fail to fulfill their contractual obligations on the grounds of burnout. If Twitch employees waive fines for anchors who fail to fully fulfill their contractual obligations, it will cost the company more than $1 million a year, she said. Knight made it clear that Twitch employees must no longer be lenient to anchors who reduce the frequency of live broadcasts because of energy exhaustion.

Former employee Mark Kendra bluntly said that Knight made it difficult for him and other colleagues to work properly. "in the seven months she worked with her, she never gave a team-based strategy. in addition, she doesn't want to allocate the company's budget to anyone on the team." Kendra worked for Twitch for eight years as head of the Twitch student team before resigning in July 2022.

In August last year, a Twitch employee wrote to senior executives that Knight's management style led many employees to complain to the HR department and caused a massive brain drain. In just six months, a total of 12 employees complained about Knight, and five others left on the grounds of Knight, and one employee who reported directly to Knight even asked the company to transfer the entire team from her.

In fact, the employee who reported the "leapfrog" had been dissatisfied with Knight's management methods, and he was fired shortly after the email was sent. According to statistics, in 2021, more than 300 employees left Twitch;2022 in the first three months of the year, and more than 60 employees left. In September 2022, Knight himself left.

Mr Knight is not the only executive out of touch with reality within the company. "it's a deep-rooted problem. In recent years, so many bad leaders have left Twitch that no one has put in a good word for them."

Out of protest against Knight's management style and decision-making, Kendra decided to resign. "Why advertise on Twitch?" Advertising is generally unpopular on any Internet platform, and Twitch anchors are particularly disgusted with ads, fearing that if viewers see ads when they enter a new channel, they are likely to leave immediately. In addition, advertisements often interrupt the highlights of the live broadcast.

But in 2022, Twitch launched a new advertising incentive program that compensates anchors each month based on live time and ad duration. In this way, the company puts pressure on anchors to insert ads more frequently. Twitch later revised its plan to make it more flexible, but it also brought more variables to anchors' income.

Twitch lags behind its competitors in advertising services. "A lot of people think that your phone will monitor you with a microphone." "it's not true, but it's possible to do a scarier thing based on your behavior, profile picture and what you're interested in-predicting what you're talking about," says Theo Brownie, a former Twitch software engineer. "

According to Brownie, both YouTube and Facebook can do this, relying on the privacy information obtained to provide users with advertising content that they are more interested in, but Twitch does not have this ability, which leads the platform to often provide viewers with ads they do not like at all.

Devon Nash, the boss of advertising agency Novo, says YouTube allows advertisers to display ads to specific groups of people with great precision. But on Twitch, advertisers can only target all users. To make matters worse, they have to spend a lot of time and labor costs communicating with Twitch employees, rather than using automated systems like other platforms.

"the user base of these video platforms has a high degree of overlap, and YouTube allows ads to reach the target audience more accurately and cheaper." "in that case, why do people advertise on Twitch? according to our observation, many brands are not interested in the Twitch platform because there are so many better options in the market," Nash said. "

Twitch has launched a basic targeted advertising function, but it is not perfect at the beginning of its launch, and may even infuriate some brand representatives last week, shortly after the parent company Amazon announced a new round of layoffs, Twitch confirmed that it would lay off 400 employees. In a brief announcement, the new CEO Clancy attributed the company's decision to cut jobs to the current macroeconomic environment and the lack of expected user and revenue growth.

Last October, Mike Minton, Twitch's chief revenue officer, said the company would adjust its existing advertising strategy to help anchors insert ads at a more appropriate time and to ensure that anchors' recommendation mechanisms are not affected by ads. For both anchors and advertisers, he wants to simplify the process of providing ads to users. "self-service is clearly the trend of the future, and we will allow advertisers to display ads more accurately and widely to target users based on everyone's interests, rather than having to deal with our employees every time."

Several former Twitch employees in maintenance mode said in an interview that different teams are used to fighting on their own, trying to keep a firm grip on ownership of the project at hand. They believe that this may not be conducive to broader communication and cooperation. At the same time, because the position of Twitch in Amazon's long-term plan is not clear, its position within the group is quite awkward, and many features are abandoned after a period of development, never finding an audience.

"when Amazon first saw Twitch, the idea was probably: it will be the future of content and games, and it's worth investing in." "Amazon changed its mind and thought it could use Twitch to explore the future of online live streaming, but it didn't seem to be as skyrocketing as expected," said Diaz, a former director of emerging content at Twitch. "so the question now is, what should Amazon do to realize the true potential of Twitch?"

In interviews, many former and current employees of Twitch mentioned the status quo of "Clips" and "Drops" functions. Both features are very popular with users, the former allowing anchors and viewers to quickly share highlights of the live broadcast, while the latter allows developers to provide in-game rewards to players who watch specific anchors play games. However, according to several respondents, they have entered "maintenance mode" at different times in the past few years.

Tom Virelli, chief product officer of Twitch, said during the 2022 TwitchCon event that the development of the above features had indeed been shelved, but the slicing function had returned to the development cycle. In January, Verilli and Minton mentioned in an official blog post that Twitch is developing new tools to make it easier for anchors to edit video clips for short video platforms such as TikTok. In addition, the article said that Twitch is also developing a mobile exposure mechanism that allows potential viewers to scroll through the anchor's live streams and clips.

Duobao, a feature that wins in-game rewards by watching live broadcasts, is popular with viewers. Several former and current Twitch employees pointed out that they were surprised that it took them so long to end the "maintenance mode" of slicing. At the same time, Guest Star, the multiplayer live broadcast mode, was supposed to be a new feature launched last year, but it is still in the testing stage and has not made much waves among the anchors. "at the height of the epidemic, everyone was asking, 'can we have a multi-person phone chat in the studio?'" "it's hard to imagine that it took Twitch two years to do that," said a former Twitch employee. "

Last October, Verilli said of Twitch's process of developing new features: "We are often criticized and questioned whether some products have met their goals." Whenever a product fails, we always encounter this kind of problem.' Is this failure because of your bad ideas, or is it because of your lack of execution? Or, your ideas and execution are good, but the time is not yet ripe?' As a product manager, this is a challenge I have to face every day. "

Today's Twitch relies more on anchors to generate revenue than ever before, and too much caution or poor development of new features has become a big problem. One Twitch employee pointed out that when Amazon launched the fantasy online game New World in 2021, Twitch's treasure drop feature provided a huge boost to the company. " Dianbao is too powerful, why on earth should it be put into maintenance mode? You know, our parent company has seen the value of this product. "

"Twitch needs to proactively expand more diverse content, attract more diverse creators, and find ways to enrich business models, such as through short videos or e-commerce, to drive revenue growth. If Twitch can increase revenue through more imaginative, creative and bolder ways, then there is no need to squeeze creators."

Minton stressed that Twitch will actively try new ways to cash in. "We are considering all possible options and focus on making the cake bigger to ensure that anchors can make more money. The more money the anchors make, our income will increase."

But some Twitch employees feel that Twitch itself has entered "maintenance mode" because of the lack of profitability of the platform in a weak economy. "I think the company's focus now should be on improving operational efficiency, reducing costs and weathering the recession, rather than layoffs."

Now, with a new round of layoffs, change seems to be coming.

"as a company focused on building a community with users, this layoff is very difficult for us and a well-thought-out decision." "We take this responsibility very seriously, but sometimes we have to make extremely difficult decisions to protect our business and ensure the long-term survival of Twitch," Clancy wrote in an article announcing the layoffs. "

This article was compiled from: https://www.washingtonpost.com/ video-games / 2023-03-23 / twitch-subs-ads-layoffs-kai-cenat/

Original title: "How Twitch lost its way"

Original author: Nathan Grayson

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