Let’s Take A Minute To Talk About Twitch’s New Branded Content Guidelines.
Hi all! My name is Noah Downs, aka MyLawyerFriend! I am a licensed attorney with a focus on business, and intellectual property issues in the content creation and videogame industries.
Today, Twitch released new Branded Content Guidelines (“Guidelines”) for on-platform sponsorships. There is a lot of confusion and uproar about what these Guidelines mean both for current and future sponsorships and paid content on Twitch, as well as what the Guidelines mean for Twitch content creators. Let’s take a few minutes to answer some of the common questions I’m seeing out here about these Guidelines.
Basic Definitions
First, let’s get some terms out of the way.
Branded Content
As identified by Twitch, Branded Content is “any content produced by streamers featuring products or services based on an exchange of value, such as being paid or receiving goods or services. Sometimes these types of deals are referred to as paid product placements, endorsements or sponsorships.”
Burned-In Ads
Burned-In Ads are ads that are pre-generated and inserted directly into the stream, using an asset capture tool like OBS. These can be video ads (including trailers and pre-recorded commercials), display and banner ads (including both static, nonmoving assets and dynamic, moving assets), and prerecorded audio messages (such as a call to action from a sponsor’s CEO or celebrity endorser).
So what’s happening?
Note, on June 7, 2023, Twitch walked these Branded Content Guidelines back, and has removed the referenced restrictions as a result of community pushback. However, they didn’t change their Terms of Service — they just removed the guidelines.
Twitch released new Guidelines for Branded Content that put some unprecedented and unexpected restrictions on how Branded Content can be used and displayed on Twitch. These include:
1. Requiring use of Twitch’s Branded Content Disclosure tool (found in the creator dashboard, under “Stream Info”).
2. Ensuring that the Branded Content meets Twitch’s formatting requirements (more on this in a moment).
3. Ensure that the Branded Content is permitted on Twitch (i.e., no illegal or gambling products, or hateful products or services).
Topics one and three (using the Branded Content Disclosure Tool and ensuring the content is permitted on Twitch) are not news — Twitch has been working on the Disclosure Tool as a way to help creators with FTC Disclosure Requirements for quite a while, and the limitations on specific product promotion have been in place for a while. The main concern is with topic two — formatting.
Historically, Twitch has not really enforced any sort of formatting policy with regard to content creator sponsorships and endorsements. While there was a general guideline in the terms of service against playing baked-in commercials, it was sporadically enforced because of 1) the difficulty of policing the violations, and 2) the vagueness with which baked-in commercials were defined. Nobody really knew what exactly a violation would be, and so Twitch didn’t seem to mind.
With the new Guidelines, Twitch has taken an active step toward dramatically restricting how Branded Content can be displayed. These include restrictions like:
- Limiting the size of on-screen logos to 3% of the screen size; and
- Prohibiting Burned-In Ads almost entirely.
These Guidelines both restrict content creators in unprecedented ways and also likely have unintended and far-reaching consequences for Twitch, content creators, and sponsors alike, most notably:
Harming the Creator Economy. In 2023, many sponsors withdrew investment in marketing efforts (including on Twitch) due to concerns over the economy at large. Many creators suddenly found that sponsorship dollars they relied on to supplement on-Twitch income had dried up, meaning in some cases that streaming was no longer a viable career. While sponsors have slowly been re-entering the space, these sponsors have been offering (and sometimes requiring) more and unique methods of promotion. Ads for affiliate-marketing monoliths such as HelloFresh and RAID: Shadow Legends have required on-screen banners, and there have been new opportunities for co-streaming live events (such as Warhammer’s SKULLS 2023 event, or a Sony, Xbox, or other console direct event). Removing the ability for creators to offer Burned-In Ads dramatically limits on-screen advertising that content creators and sponsors have built into the creator economy.
Restricting On-Twitch Charity Tools. Many charities offer a brand kit to content creators, including graphics packages and polished commercials that help content creators advocate for the charities and encourage donations. In addition, platforms like Tiltify provide on-screen banner and overlay tools to show charity campaign progression. Because many charities offer incentives for fundraising (swag boxes, t-shirts, or even the chance to earn rewards) these charity campaigns are considered Branded Content — some charities have even gone so far as to provide FTC disclosure guidance in certain cases for their annual events. The new Guidelines expressly prohibits content creators making use of these tools (commercials, banners, and graphics) and restricts the on-screen logos that content creators can utilize.
Questions & Answers
Q: Who does this affect?/Why should I care?
A: The Guidelines affect content creators, sponsors, charities, and viewers alike. Branded Content is key to the creator ecosystem — and the Guidelines are a disruption that will turn Twitch from a reliable content outlet into a risky content platform at best, with potentially diminishing returns.
Q: I’m a content creator — how can I work with sponsors under the new Guidelines?
A: I cannot give specific advice on how to work within these Guidelines — but I can supply you with information to help make your decision. Here’s a breakdown of the important points:
— Sponsors and advertisers are going to be restricted in how they can work with content creators on Twitch, meaning that creative sponsorships with multimedia aspects are going to be few and far between. While there are permitted methods of promotion, these sponsors and advertisers have no guarantee that Twitch won’t further restrict their options.
— If Sponsors and advertisers are restricted like this, they may seek to invest in content creator promotion on other platforms like YouTube and TikTok. While YouTube also prohibited Burned-In Ads that are video content (where YouTube has a comparable ad format) content creators with diversified content outlets will still have the opportunity to promote certain Burned-In Ads (and normal logo promotions without formatting restrictions) on these outlets, so sponsors may begin to reduce investment in Twitch and shift advertising elsewhere.
Q: Wait, I have existing sponsor and partnerships that would violate the Guidelines. Does this effect me, or is it only for new sponsorships?
A: Twitch has stated that they will begin enforcement of the Guidelines on July 1, 2023 — and that content creators will need to update their streams and work with their sponsors to change their obligations accordingly.
Q: Why is Twitch doing this?
A: This is a guess, but it’s likely that Twitch is trying to encourage brands to work directly with Twitch. In order to do this, they need to demonstrate to sponsors and advertisers that Twitch has tools and options that content creators do not individually have — hence why the Guidelines take away options that content creators had before. The Guidelines take a cornerstone of the content creator economy on Twitch and forces sponsors to work with Twitch, at the content creator’s expense.
Q: Why not just continue doing what I used to do with Burned-In Ads and formatting?
A: Unfortunately, Twitch is claiming they will begin enforcement on July 1, 2023. That said, I do believe that there are potential legal pitfalls to Twitch’s enforcement of these Guidelines. For example, if Twitch is able to enforce these Guidelines, they demonstrate that they have the ability to police their platform for infringing content. This can harm them in their defenses to DMCA Safe Harbor violation and copyright infringement claims.
Q: So if I’m in a long-term sponsorship or have sponsorships lined up that would violate the Guidelines, I have to change what I’m doing almost immediately?
A: Correct, that’s what Twitch is saying.
Q: And if I don’t, I am at risk of getting penalties from Twitch?
A: Yep.
Q: That sucks…
A: Yep!
Q: Wait, does this mean I can’t co-stream events?
A: It appears so. Co-streaming content would inevitably include Burned-In Ads (like game trailers, commercial interviews, and other sponsored calls to action). It’s worth noting that this likely wouldn’t violate YouTube’s prohibition on Burned-In Ads that contain video content, because YouTube does not provide a comparable co-streaming ad format.
Q: There has got to be something else we can do.
A: Agreed. Give Twitch immediate feedback, and also make plans to diversify your content. If your sponsorships would conflict with this, you can try to rework them in the coming weeks.
Q: What if I have more questions that weren’t answered here?
A: There is likely an answer somewhere! Hit me up on Twitter (@MyLawyerFriend), check out anything from Zach Bussey, or dive into any Discord server where they’re chatting about this. Use these resources to answer any questions you have.
In Conclusion
This is a complex issue that is still unfolding. However, the main things you need to know are:
— The Guidelines go into effect and will be enforced beginning July 1, 2023.
— The Guidelines apply to all Branded Content on Twitch. If you’re a content creator relying on Branded Content for your revenue stream, you need to adjust quickly or move off-Twitch with those sponsorships.
— Twitch is a cool platform that supports an incredible creator ecosystem. However, Twitch is corporation, and corporations are not your friends. If these Guidelines are not amended or revoked, then it will probably be the beginning of the end for the golden age of content creation on Twitch.
Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Premack Rogers PC or Noah Downs individually, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction. This post is not intended to create an attorney-client relationship in any way. Any particular outcome is based on the facts and circumstances of each particular case and the applicable laws of your jurisdiction.
