Twitch Launches Cheering With 29% Fee — And A No Fee Idea For Brands | THE NEXT LEVEL 018

Manny Anekal
Jun 29, 2016 · 5 min read
(Source: Twitch)

Your Wed June 29 eSports News


My Take: Two weeks ago in ESPORTS WEEKLY #10 I covered “The War on Twitch” and was intrigued by the non-advertising monetization options that Twitch wasn’t capturing. TwitchAlerts had the donation side and a new startup Revlo had an interesting offering:

(Source: eSports Weekly #10)

This week Twitch launched Cheering (I so badly wanted to use this picture ) to capture some of this market. Cheering is basically another form of donation as the announcement said — I’ll let you debate the definition of “donation” and “support”. Here’s how it works:

(Source: Twitch)
  • You Buy Bits from Twitch
  • You “give” these Bits to the streamer you’re watching via Twitch chat

Before we get to the monetization part, from a pure integration perspective and look; Cheering and Bits is pretty cool. Super easy to use — although I haven’t tested how easy it is to reload once you’ve run out. A lot of people underestimate the engagement vehicle that Twitch provides and in particular; Twitch chat where you have a direct connection with your audience (Isn’t that what every brand wants? Hint. Hint.)

Now for the money. At the lowest purchase price without a discount, Twitch is charging a 29% Fee for Cheering to streamers:

(Source: eSports Daily)

But you need to consider this from the Streamer’s POV. There was a great analysis done last year on how Twitch streamers make money but it basically boils down to this:

  • A large share of money is made via subscriptions — where Twitch takes a fee
  • Ad revenue is not the main driver and Twitch takes a fee — I’d also wager that overall video CPM’s will drop due to market inventory and Facebook/Google taking over the Digital Media universe
  • TwitchAlerts provides the Donation functionality to streamers already — which is completely Free

So introducing a third fee-charging feature while more tightly integrated into core Twitch functionality is still significantly higher than 0%. There was a pretty heated discussion on Reddit which was enough to warrant a follow-up from Twitch. Let’s see how this looks after a full roll out.

However — I think I have another option that could be FREE to Streamers and FUN for the audience:

  • Launch Custom Bits for Brands
  • Let Streamers/Brands give them away to their audience for Free
  • Audience donates the Brand Bits in the exact same manner and the streamer get’s paid on the same revenue share of $0.01 cent per Bit — but charge 0% Fee — as Twitch will already monetize on the Ad side

Fans Win. Streamers Win. Brands Win. Twitch Wins

You’re Welcome.

[I haven’t run the numbers nor do I have access to Twitch’s internal revenue estimates on Cheering but more than likely Brands can’t fully support this — but I’d experiment]


(Photo: FC Schalke 04)

My Take: Last month, FC Schalke 04 joined numerous other European Sports teams in entering the eSports space. They’ve moved even more quickly by announcing their second stake with FIFA and former pro for SK Gaming Joshua Begehr leading the new venture.

The speed at which European teams have moved into eSports has been very fascinating to watch. An astute reader — who shall remain nameless — pointed out that Sampdoria in Italy’s Serie A had also signed a very popular Italian FIFA pro last month. Here’s how Europe is looking:

(Source: eSports Daily)

Without debating who the “top” leagues are, the only two that haven’t taken a plunge are France’s League 1 and the Dutch Eredivisie. Prediction: A French team is next.


(Photo: SuperSport)

My Take: South African Satellite Channel SuperSport announced last month that it would be broadcasting Turner’s E LEAGUE. That’s not new but what’s interesting is this recent interview with SuperSport’s Clinton van der Berg on eSports:

Have you experienced any noticeable push back from your regular viewers who do not agree with you showing video games as a “sport”?

“None whatsoever.” — Clinton van der Berg

Seems like the opinions of at least South African eSports viewers are a little more progressive.



My Take: I love Red Bull. It was love at first sight. I still remember my first one in 1997 in Berlin. I’ve always hated coffee and tea never gave me that kick. I’ve calculated how much I’ve spent on Red Bull over the last almost twenty years and it’s ridiculous.

This sponsorship is great for so many reasons. Red Bull understands Gaming and eSports marketing better than any other brand. Period. I won’t even get into the myriad ways they’ve been involved in the scene. The amazing part is that not only does EVO get something cool for the fans — and I love the fighting genre — it’s one of the first and soon to be many partnerships with Casinos. Watch this space. How much Red Bull Vodka will be sold that night?

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Manny Anekal

Written by

esports. Founder and CEO: The Next Level (Media), Versus Sports (Team), and Versus Consulting. Podcast →

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