How Twitch Is Shaking Up The Music Industry

One recent Thursday on the livestreaming platform Twitch, roughly 1,000 people tuned in to the official channel of Mike Shinoda, the singer, songwriter and multi-instrumentalist of Linkin Park and Fort Minor fame. Shinoda, appearing from his home, was creating a song in real time based on a fan’s rather specific request: “Write a dance-pop-rock song in the style of Linkin Park’s ‘New Divide’ and ‘Burn It Down.’”

“That was a good beat,” one user typed in the video’s Twitch Chat box as Shinoda worked, while another suggested, “Maybe add choir.”

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For the past few months, Shinoda has been using this process to create a new album with input from his biggest fans and has racked up 64,000 Twitch followers in the process. Users earn “Shinodabucks” for watching his streams, which they can exchange for the ability to suggest a song style or vote on an outcome (like, “What instrument should I use next?”). He released the first part of the experiment, Dropped Frames Vol. 1, on July 10, and says he already has enough material for two more volumes.

“All that said, it’s not about making albums,” says Shinoda. “It’s about building community and having a fun and positive place for my fans to go.”

There are plenty more of those places cropping up on Twitch, with many midtier artists earning around $2,000 per month from the platform, while some prominent DJs can make upwards of five figures in that time frame. Diplo and Sofi Tukker are among those performing sets multiple times a week on the platform; producer Kenny Beats, who has worked with Vince Staples, Ski Mask the Slump God and Denzel Curry, hosts near-daily “beat battles” to help others in his field get their work heard by artists like Charlie Puth; and independent artist mxmtoon streams herself painting and playing The Sims. Twitch is now signing exclusive deals for artists, starting with rapper Logic, who signed a reported seven-figure deal to stream both music and gaming content for a set number of hours per week, including a livestream premiere of his new album, No Pressure, on July 23.

Shinoda isn’t the only artist using Twitch to make music in real time, either: In 2019, electronic artist/producer HANA livestreamed the entire creation of her album HANADRIEL, and more recently, pop singer Sereda shared the process of making her I Plead the Fifth EP on Twitch. (The recording entered Billboard’s Top Current Album Sales chart at No. 69 in June.) Meanwhile, Twitch’s music vertical logged 17 million hours watched in April — a massive 385% jump year over year — according to a recent report by software developer StreamElements and analytics company Arsenal.

Twitch, which is owned by Amazon, has traditionally served as a gaming-focused platform, where button mashers stream themselves playing titles like Fortnite and League of Legends for the growing esports community. But gaming and music have always shared fans: According to Nielsen’s 2020 Games 360 report, 75% of music fans are also gamers who play on consoles, and 56% of music fans watch some form of online video-gaming content such as that found on Twitch. At a time when the pandemic has eliminated touring as what has traditionally been artists’ largest source of income, Shinoda is among a growing group of musicians who are taking advantage of that overlap of gaming and music fans by using Twitch to connect with them in new, interactive ways — and to monetize their music. This is great news for Twitch, which has courted musicians for years — but behind the scenes, the company’s lack of music licensing agreements, including with the big three label groups, has created tension on both sides. Will the relationship survive?

‘That’s Something You Can’t Do In A Venue’
Music’s mass migration to Twitch makes sense to Will Morris, founder/CEO of Red Light Management subsidiary HIT COMMAND, which he launched in January to focus on music and gaming partnerships. The two industries don’t just share fans, he says — many musicians are gamers, and even for those who aren’t, their respective passions have a lot in common.

“[Gamers] are behind their tech and hardware, doing what they love, and that’s similar to someone who is in the [recording] studio 10 hours a day,” says Morris, who adds that Twitch “is creating a space for these guys to have a social component, a place to hang out, and the user behavior is very similar.”

Morris cites one of his company’s success stories as evidence of the platform’s influence. When HIT COMMAND launched a channel for DJ/dubstep producer Subtronics on March 21, 11,500 viewers were watching at one time — “concurrents” in livestreaming terminology — and by the end of the day, the artist had accumulated 14,000 followers and over 400 subscribers.

Musicians don’t necessarily have to limit their channels to music, though: Mxmtoon prefers using the platform to show off her other hobbies and recently did a live reading of her childhood art journals. “So much of my life revolves around music,” says the artist born Maia, who keeps her last name private. “So if I’m having these three-hour periods where I can get to know my audience and the similarities that we have, it’s these really funny moments that you don’t get to have otherwise.”

Twitch has baked in a number of features that facilitate community-building. During livestreams, fans can communicate with each other and the streamer through Twitch Chat, where channels often develop their own inside jokes and “emote” languages — Twitch-speak for emoticons. “For some reason, we have so much fun on my stream with polls,” says HANA, aka Hana Pestle. “We’ll have a poll to decide if we should have a poll.” She adds that Twitch Chat allows her to communicate with fans while performing in ways that would never work during a live show, like “having the chat decide what song I’m going to do next, or [asking], ‘Do you have any questions about that song?’ That’s something you can’t do in a venue,” she says. “Or you could, but it’d be weird.”

Twitch also offers more monetization tools for creators than the average video platform. Creating an account is free, but streamers who pass a certain threshold of followers and hours streamed can earn “affiliate” or “partner” status and tap into monetization tools like ads; paid subscriptions from fans ($4.99 to $24.99 per month) that unlock things like exclusive videos, badges and emotes; and a share of the revenue from Bits, which fans can purchase and exchange for the ability to “cheer” (mark a chat message with animated emotes) during a stream. Affiliates split subscription income 50/50 with Twitch, while partners sign individual deals, with top-tier streamers reportedly earning around 70% of subscription income. Both classes of creators also earn 1 cent per Bit used to cheer for them. Finally, many streamers earn extra cash through brand sponsorships, and fans can also donate directly to artists or purchase merchandise via links posted on their channels.

“It can definitely be another revenue stream” for artists, says Maia, who monetizes her channel through ads and subscriptions. Pestle says that in a typical month, her channel generates anywhere from $1,000 to $2,500.

And because supporting creators monetarily is already embedded in the Twitch user culture, artists avoid the potential awkwardness of asking for money.

“If you look at any other platform, the difference between those and Twitch is that you have an audience that is used to some type of transaction,” adds Morris. “They’re endemic to subscribing to a channel, paying some money to get Bits and donating. It’s a different model than other platforms, where it’s more about pressing the heart button.”

Mad Decent label founder Diplo and president Jasper Goggins saw this potential early on and developed a focused Twitch strategy for their roster, which includes Dillon Francis and Aluna of AlunaGeorge. Some time before the pandemic, the label rented space downstairs from its Los Angeles office that it transformed into a “Twitch room” with the proper equipment to “have gamers and DJs working together, doing tutorials, playing games,” says Goggins. “We had been waiting to pull the trigger on these plans, and once COVID-19 hit, it put us into overdrive. We started livestreaming like crazy.” Instead of giving each artist an individual channel, Mad Decent’s label channel acts as a hub for the roster: “It’s a power-in-numbers thing,” adds Goggins. His artists also exchange viewers through Twitch’s “raid” feature, which allows streamers to automatically send everyone watching to another channel at the end of a stream.

Goggins estimates that getting one artist set up with a high-quality DJ streaming rig — including a CDJ digital music player, microphone, audio interface, webcam, broadcasting PC, green screen and reliable internet — costs between $1,000 and $5,000, though streaming through a laptop or phone is also possible. But the label’s Twitch room has quickly paid for itself, in part through merch marketing. “Just wearing certain stuff on the stream can boost sales,” says Goggins. “We have ways of creating a chatbot that pushes [merch]: ‘Do you like the shirt Diplo is wearing? You can get it here.’ There are intersectional ways to drive revenue.”

Laying Groundwork For The ‘New Normal’ In Live Music
Twitch has been striving to get music artists’ attention for years, and executives say music will be a big part of their company’s future — so long as music licensing issues don’t get in the way.

In the past six months, Twitch has hired two former Spotify staffers — Athena Koumis to head music partnerships and Tracy Chan to lead music product and engineering — and is continuing to expand its music team, including recent job postings for a music curation manager and senior product analyst. “There’s definitely more to come” on the hiring side, says Twitch senior vp/head of music Mike Olson, who previously developed Pandora’s Artist Marketing Platform before joining Twitch in 2018. “As the music industry is working through how we’re going to consume content and where, we’re forming partnerships and laying the groundwork for what a ‘new normal’ in live music looks like.”

The company has also launched a Creator Camp page for artists with tips for using the platform effectively; placed a Music Directory on the homepage; and partnered with music industry players like SoundCloud and Bandsintown to accelerate the path to moneymaking status for indie artists. “This is especially important during a time when artists are losing revenue from canceled live performances and tours,” says Olson.

Partly as a result of Olson’s work, non-gaming content on the service has quadrupled over the last three years. The platform has few major competitors: Microsoft announced plans in June to shut down livestreaming platform Mixer, which until then was Twitch’s main rival; and similar platforms like Steam have yet to attract the music industry in a significant way. However, mobile-first streaming platform Caffeine has recently entered the fray, signing artists like Drake and Offset to content deals.

Twitch vp original content Justin Dellario says that Twitch also helps artists amplify the impact of their projects on other platforms. On April 23, Travis Scott drew 12.3 million concurrent players in the video game Fortnite to the premiere of “Astronomical,” his pretaped in-game performance as an avatar. A simultaneous stream of the event on Twitch helped it reach millions of people outside of the game, too — Nielsen SuperData estimates that the event’s official Twitch stream reached a peak average-minute audience of 2.3 million viewers. (Twitch doesn’t release viewership statistics.)

“Creators help to bring more eyeballs to these events, not only by livestreaming their participation but adding commentary and sharing the experience in real time with their community,” says Dellario. “As a result, there are parallel conversations happening within the game, and among the viewers watching on Twitch, offering more, differentiated experiences with the same overall event and attracting wider audiences.”

Twitch is also hiring a principal music partnerships and licensing manager — a needed position at the company. Like YouTube, TikTok, Instagram and other platforms, Twitch has been operating under the “safe harbor” provision of the 1998 Digital Millennium Copyright Act, which shields content-hosting platforms from liability for copyright violations due to user-uploaded content, so long as they promptly respond to takedown requests from rights holders.

But as artists (particularly DJs, who play other artists’ material) migrate to Twitch — and as the recording industry fights in Congress to amend the DMCA itself — Twitch users whose copyright infringement was largely overlooked are increasingly receiving takedown requests.

In June, a flurry of those notices from the RIAA revealed that Twitch does not have licensing deals with Universal Music Group, Sony Music or Warner Music Group or their publishing entities. Industry sources say Twitch is in talks with global performing rights organizations — which collect and distribute public performance royalties — regarding noninteractive audiovisual licenses and already has deals with ASCAP, SESAC and BMI. Meanwhile, Twitch tweeted that it is “working on solutions” for helping users navigate the DMCA takedown process.

“As our streamers find new and creative ways to express themselves on Twitch, we are continually looking at what we can do to support our community,” says Olson in a statement to Billboard regarding licensing. “For example, while Twitch is a DMCA-compliant service, Twitch has voluntarily engaged with global PROs regarding licenses for Twitch.”

“We do require that creators adhere to our community guidelines, which state how we value the work of all songwriters, musicians and other creative artists,” continues Olson. “And as a company committed to supporting creators, we respect — and ask our users to respect — the intellectual property of those who make music and those who own or control music rights.”

‘Twitch Turns A Blind Eye’
Some in the music industry remain skeptical that the platform is interested in achieving harmony with the label groups and other rights holders.

“Twitch turns a blind eye until someone issues them with a takedown, and then they deal with it within their DMCAs,” says Seven20 management company founder/CEO and longtime deadmau5 manager Dean Wilson. “They’re clever with what they do, because within every single one of their contracts, you [as a streamer] are completely responsible, which is crazy when you think Amazon owns Twitch. Amazon has Amazon Music — why wouldn’t they just replicate their [music licensing] deals with Twitch?”

Some artists are not concerned about licensing issues: “I try to keep the music on my channel a little bit more obscure,” says Pestle. “If you try not to have really popular music on there, you probably won’t have a problem.”

Either way, Twitch — like many other businesses experiencing a bump during the lockdown — will need to prove its staying power. Can the platform remain relevant to artists post-pandemic, when touring eventually resumes?

Shinoda says yes: “I have tons of fun challenging myself and inventing new things to do.” Maia adds that the next time she’s on tour, she’ll look forward to streaming from the road.

“There’s such a desire for people to be able to see their favorite artists, regardless of where they are in the world, and not having to wait for them to come play a live show,” she says. “I think that Twitch streams are still going to be something that happens.”