Twitch revert branded content changes after backlash

Image credits: Bryce Durbin/TechCrunch

A day after Twitch announced sweeping changes to how streamers are allowed to advertise, the company is backing away.

On Tuesday, Twitch announced updates for Branded content guidelines The set of rules that dictate how live stream creators can offer sponsorships, endorsements, and other paid promotions. Twitch noticed the growing criticism at the time, but it took until Wednesday afternoon for the company to reverse course.

“Yesterday, we released new guidelines for branded content that impacted your ability to work with sponsors to increase your income from streaming,” the company wrote. “These guidelines are harmful to you and bad for Twitch, and we are removing them immediately.”

The changes would have severely restricted the in-channel sponsorships that many Twitch users rely on for the lion’s share of their income, preventing many of the popular forms of advertising that streamers typically incorporate into live streams.

To top it all off, the massive changes, which would have upended the existing sponsorship deals of several top players, were due to take effect in less than a month – on July 1.

The reaction was loud and fast. Big channels and smaller streamers alike quickly criticized Twitch for the sudden shift in branded content rules, highlighting how the changes will affect their ability to make money on the platform.

Many creators viewed Twitch’s sudden changes to branded content guidelines as a way for the company, which is owned by Amazon, to insert itself among streamers and their sponsors. Twitch takes 50 percent of the creator’s profits through its standard revenue sharing agreement, but is unable to get a cut of the lucrative deals that streamers negotiate with sponsors and advertisers. Since the economics of streaming are not actually favorable to content creators, most streamers rely on advertising and sponsors to bridge this monetization gap.

Banners regularly display “burn in” ads – ads displayed directly on streams, whether through display banners or video or audio ads. The changes announced Tuesday would have blocked all of these ads, except for relatively small display ads that take up less than three percent of the screen.

Confusion reigned Around the three percent limit, with some banners stating that even a typical “good” Twitch ad took up more screen space than is now allowed.

Branded content rule changes aren’t the only hornet’s nest the streaming giant has released recently. Last year, Twitch ignited a nearby firestorm when it announced plans to phase out the 70/30 revenue split that allowed some top players to keep more of their earnings. While the Twitch community has long called for the company to move all streamers into that more favorable ratio, the company instead outlined a vision that would bring everyone into a less lucrative 50/50 split.