How Musicians Are Using the Live Streaming Platform to Make Money & Engage Fans

This article originally appeared in the January/February 2020 issue of Canadian Musician magazine.

By Michael Raine

Are you familiar with Twitch? I’ll admit I wasn’t until Karen Allen reached out to Canadian Musician. I had a vague idea that it was a live streaming platform popular with video gamers. That is pretty much the beginning and end of what I knew. Then Allen, a tech start-up consultant who worked for I.R.S. Records and the RIAA during the Napster lawsuit days, got in touch about a new book she wrote on how musicians can utilize Twitch.

Her email read: “I wrote this not as a marketer/educator looking for the next book idea, but because I’ve been working in digital music for 20 years and have never seen anything so effective for artists.” That piqued my interest…

“Look, I don’t need to be writing a book. I am a consultant and I do fine. I just came across this and thought artists should know about it and, through the process of me putting a channel together, realized how completely complicated it was and thought it would be too much of a wall for artists to leap over,” Allen, whose book is aptly titled Twitch for Musicians, later said over the phone. “But once they figure it out, it’s pretty easy. But there’s just nothing that tells you what to do unless you want to watch 100 YouTube videos. So, that’s why I try to make this easy for people.”

Twitch is a live video streaming platform with about 15 million daily active users, about 90 per cent of which are gamers. It launched in 2011 as a spin-off of the general-interest streaming platform Justin.tv. Because it’s so well set up as an online community hub, gamers flocked to it and by 2014, it was the fourth-largest source of peak internet traffic in the U.S. according to the Wall Street Journal, behind only Netflix, Google, and Apple. That year, Amazon bought it for USD $970 million.

The basics: there’s a live video feed of the person doing their thing – playing games or performing music – and alongside the live video window is a chat window. In the chat, people talk to each other and to the streamer and react in real-time to what’s happening. The streamer can chat back and respond to requests.

“So, you end up with this really interesting community formed around the content, whereas with most other social content platforms, what it really is, is socially-driven content distribution. It is sort of the opposite of live streaming. Live streaming is really all about slowing down and hanging out and being in a community with other people who like the same thing and the creator is sort of directing what’s happening,” says Allen. “A really big creative arts community on Twitch has been evolving over the last three years … that includes things like cosplay, art, cooking, coding, but music has emerged as the biggest of these creative arts segments.”

The musicians on Twitch – which vary across many genres, with singer-songwriters generally being the most successful on the platform – are playing music while interacting with viewers in between songs. Part of its appeal is that it feels very intimate, kind of like a living room concert. “These sort of fan friendships are formed and these deep fan relationships with the artists are formed because you’re having a direct relationship with them. They are actually sitting down and playing music for you and you’re making requests and the artists are playing those requests. It’s the most intimate fan-artist relationship I’ve seen digitally so far, and I’ve seen a lot of ideas come and go at least two or three times,” says Allen.

That sounds great and pretty straightforward, but for the creators on Twitch to do it properly, it is a little convoluted. In terms of hardware – mics, basic digital mixing board, webcam, decent computer, and internet connection – it’s not too costly, and most dedicated musicians will already have most of what they need. But there is a higher barrier to entry in terms of learning the platform because it involves a number of third-party applications and software specific to the live streaming world.

That’s why Allen wrote her book, which is a clear and detailed step-by-step guide to being a musician on Twitch. For instance, for taking song requests, a third-party application called StreamerSonglist is used. Importantly, to monetize Twitch sessions, other applications like Streamlabs and StreamElements process monetary donations from fans.

On that note, musicians are actually making money on Twitch.

“Twitch has its own monetization systems that you need to qualify for before you can start using them. The qualifications are things like minimum number of followers, minimum number of active concurrent viewers, minimum number of hours streamed – it’s pretty basic. If you’re a consistent streamer, honestly, it’s not too hard to hit,” Allen says. “Basically, when you qualify for the monetization, you can start charging a subscription fee. It’s completely voluntary for the viewer. The viewer can always watch for free and they can always chat for free, but when they subscribe, there are a bunch of benefits you can offer people. The biggest benefit is these emotes” – essentially custom emojis that viewers use to react to the streamer.

The channel subscription fees are pre-set amounts of $5, $10, or $25 per month, with the split being 50/50 between the creator and Twitch. Amazon Prime members get one free channel subscription per month and the creator still gets their 50 per cent.

Another form of monetization is through Twitch’s virtual currency, called Bits. “So, you can buy Bits and then spend them on things called Cheermotes, which are basically animated gifs that pop up on the screen whenever you buy them for the artist or creator. So, you can buy 500 Bits, which is about $5, and you can choose what kind of animated gif you want to pop up on the screen and choose what kind message you want,” Allen explains. With Bits, the streamer gets about 70 per cent of the revenue and Twitch the remaining 30 per cent.

As mentioned, it’s common for fans on Twitch to tip actual dollars to the musicians and other streamers. The applications Streamlabs and StreamElements are used to process PayPal or credit card transactions. “When the payment is taken, a little alert pop ups on the screen. So, you can use that to take donations for song requests, which is really popular. People also just make song requests for free, but people often donate $5, $10, or I’ve even seen $20 or $50 for song requests,” says Allen. “So, you can imagine, if you’re doing seven to 10 songs per hour and you’re on for three to four hours, which is pretty common, and you’re on three to five days a week, depending on a lot of things, that can really add up between your subs, your Cheermotes, and your donations.”

That raises the question: how much of a time commitment is this if an artist really wants to build a fanbase on Twitch?

“If you have an audience that will follow you to Twitch, you think you can get 100 or so concurrent viewers over two or three hours, if you’re that established, then you can probably get away with doing this once or twice a week and still make money and still have it be really effective for you. I’ve brought artists on and their managers have called me and said, ‘We’ve turned casual fans into super fans and that is worth it,’ and this artist goes on once a week because they’re a working indie artist and that’s all they have time for. But, that is a very valuable thing for them,” Allen explains. “If you are a younger, newer artist and don’t really have that much of a fanbase and don’t really have many touring commitments and so forth, then if you really want to build on Twitch, I’d say you have to do it four or five days a week for two to three hours per session. That is how you build; you build by showing up.”

Obviously, live streaming for two or three hours multiple times a week and engaging with fans isn’t for everyone. For those musicians who are finding the most success on Twitch, Allen says it’s a real combination of talent and personality.

“It’s a creator platform, so for some people, personality definitely wins out over talent. The people who have a great personality and a lot of talent, they do really well. But it’s not like Spotify where the music stands on its own; you’re hanging out with somebody,” she explains. “It’s not a formal concert. You’re encouraged to chat with fans for three or four minutes, go back through the chats and read the posts and respond to questions and just hang out with people. Then, you play a song, then chat, and then play a song. So, it’s not like you’re on stage and on the spot, or like YouTube where you’ve got to be entertaining for every second, which is why the editing is so crazy on YouTube. I keep saying that live streaming is the ‘slow food movement’ of music; it takes the pressure off and, you know what? It’s just really fun.”

For our full, in-depth conversation about Twitch with Karen Allen, listen to the Jan. 22, 2020 episode of the Canadian Musician Podcast.