What Twitch streamer can learn from Revlo going away

By 29 May, 2017 No Comments

The news hit a day or so ago that was closing it’s service. For a lot of people the news came out of nowhere. I’m not trying to say that I had some insider information or that I predicted it to happen… however I’ve, plenty of times, in the past talked about business models and sustainability for everything from passion projects to these larger projects.

Whenever you have something for free that’s something that’s too good to be true. Yes it might be a passion project from someone and that’s awesome. But passion don’t pay the rent or put food on the table.

The Downside of “Free”

When we look at the amount of abandoned Twitch tech ideas and projects it’s staggering. You can find a plugin for almost anything BUT often the plugin haven’t been updated for a months or, in some cases, years. The reason is simple: They’re not sustainable. The same goes the moment you start to scale it up. Revlo had offices in San Francisco  and they had, I think, a venture capital that they pulled from.

The problem with any of these are always that when there’s no sustainability is that there’s a great risk of them going away. At times they do it properly and give you an option to get the data back. However in some other cases they just stop to never return.

Why does all of this happen? It’s Twitch… well not the Twitch company. I’m talking about the culture that surrounds Twitch streaming in general. It’s difficult for any, of any size, Twitch tech company to find a business model that works for them. Things are expected to be free and that creates a weird situation for a company.

What Can Be Done?

Even if they do what, outside of the Twitch sphare, would work and on paper looks like it should work. It just doesn’t work as soon as it’s applied on Twitch. This puts actual companies that want to create Twitch tech into a strange position.

At this time the only thing that seems to be working it to tie yourself into the culture of Twitch. To understand what that means we need to look at the core of it and that’s Twitch itself.

The income for a streamer tends to come from four basic areas: Subscriptions, donations, ads and bits. Beyond that we also have merchandise with companies like DesignByHumans or TeeSpring. We can can see that all of these, even the merchandise, have one thing in common. They all split the money with the streamer. This is it. There you have it.

Twitch Economy

It’s not as simple as a transaction between two people. We see it in Twitch panels, during streams and how streamers speak about everything from merchandise, subscriptions to donations. It’s “thanks for the support” extended with “it’s not necessary but thank you if you do”. None of the four basic areas are a promise or transaction in that you get one thing and the user gets something (unless you have a VOD paywall). Instead it all comes down to supporting the streamer and doing in whatever way to thank them for giving them entertainment, education or so on.

This a community supported economy. It’s understood that not all of the money goes directly to the streamer. Subscriptions are split, bits are split, ads are split and PayPal takes a transaction fee. All of these things are already a part of how the economy system works already.

What To Do?

The one thing that viewers want is to help support their favorite streamer. As mentioned, it is the narrative that’s constantly being pushed by streamers. If you can figure out a service that will both benefit the streamer and their viewers you can start to monetize through that.

There’s already several services that tries to do this is different aspects. I’m far from the first person that have made the connection. It comes down to the context of Twitch and often it’s not possible to go into Twitch with, what’s outside is, a solid business plans and expect those to work flawlessly.

This of course isn’t always as simple as saying “do this an you’ll support the streamer”. We all need to understand that there’s a lot of underlying things there as well. For instance if the service comes off as the streamer selling out you’re all of a sudden in a dangerous area.

It comes down to the value that it brings to the entire Twitch channel that they run. If it’s something that in the past or has a free alternative or that a larger streamer has it built. You might start to run into the issue “but it’s free over here”. It’s very much something that you need to take into as we try to figure out the right business model for a Twitch tech.

I do however firmly believe that it’s possible to monetize most, if not all, the current tech out there if it’s done right.

I know this article might not be for everyone but I thought it was interesting to put forward the idea. It’s something that I think we will see start happening more and more. Revlo isn’t the first to go away but rather part of the trend and it’s a trend that we should need to have.

If you’re looking for advice on this type of stuff you can always reach me through my contact form. It has a special business tab that you can use to get a response faster. 



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