Will Page, the former chief economist at Spotify and PRS for Music, has published a new study of ‘Twitch’s Rockonomics‘ that includes case studies of the earnings and audience growth of six music artists on Amazon’s livestreaming service.

Page left Spotify at the end of 2019 and is now visiting fellow at the London School of Economics, as well as publishing his first book ‘Tarzan Economics‘ earlier this month.

Twitch commissioned the study, which also draws on data from Midia Research – which was recently commissioned by Twitch for another report – MRC Data and Chartmetric. Twitch’s involvement may well influence the reaction to the study of rightsholders who have been attacking the company over licensing in recent times.

However, the data unearthed by Page – particularly the case studies of artists Laura Shigihara, Aeseaes, Sereda, Matt Heafy, mxmtoon and RAC – will be useful for any musician mulling whether to use Twitch.

Its insight into how Twitch’s economy works could also be valuable for those rightsholders and their licensing negotiations with the platform.

Ahead of the study’s publication, Page talked to Music Ally about his findings, explaining that it was an attempt to help Twitch “understand the economics of their own business model”, as well as to give artists and the wider music industry an insight into the platform.

The study begins by setting out how Page believes Twitch is distinct from other digital services, including YouTube, TikTok and on-demand music streaming services.

“It’s live, everything else is on-demand. It’s long [form], everything else is short. It’s first-party and user-created content, not user-generated content. UCC not UGC,” he said, noting also that Twitch’s licensing providers are largely individual creators and collecting societies, rather than other rightsholders.

(Publishers, who have been among Twitch’s most vociferous critics, will have something to say about this, of course. A section of the study does address licensing frameworks, although focusing more on performing rights and sync licences.)

Page also highlights Twitch’s model of payouts to artists: revenue from channel subscriptions, bits and cheers (its tipping economy) and advertisements, suggesting that the service has “almost by coincidence” developed the kind of user-centric payouts model that campaigners have been calling for in the music streaming world.

“If you pay a recurring fee to a creator’s channel, they’ll see that revenue without any of the pooling inherent to the pro-rata model,” as his study puts it.

Page elaborated on that point to Music Ally. “By accident, Twitch offers us a user-centric case study,” he said. “Not like SoundCloud, which has switched from one model [pro-rata] to the other [user-centric], but from birth.”

He also compared Twitch to a very different profession when explaining how artists and other streamers succeed on the platform.

“Twitch is like driving a taxi. If you’re not driving the cab, the meter doesn’t move. On Spotify you can make money while you’re asleep [because people are streaming your music] but Twitch is very different to that. If you don’t grind away on your livestreaming channel, you don’t make money,” he said, before drawing another parallel. “Live [music] works that way as well.”

The ‘rockonomics’ of the study’s title refers to analysing the data to understand Twitch business models for artists. Where we talk about effective ‘per-stream’ rates in streaming music – averaged out globally by Page at around $0.003 for the purposes of his research – on Twitch he offers two new metrics.

First, ‘creator revenue per hours watched’ by their audience, which he suggests is around $0.15 per hour, although for established channels with well-engaged fans that can be more like $0.25 and even go as high as $0.75.

The study compares this to an hour’s listening on a typical music streaming service (a calculation including audio and video services globally) which Page calculated as 17 streams of an artist’s track which “applying a 20% royalty, equates to a creator’s revenue-per-hour listened of just $0.01 – less than a tenth of the $0.15 per-hour-per-user on Twitch”.

The second metric is ‘creator revenue per hours broadcast’ on their channel: an actual hourly rate in terms of the work put in, which Page calculated to average around $100 per hour.

“15 cents per hour per fan is on the demand side, and making $100 per hour is on the supply side,” Page told Music Ally. “Not everybody is making 15 cents. One of the artists [in the case studies] made almost 80 cents, and one made close to zero… But we now have an understanding of supply and demand economics on Twitch, which is fantastic.”

The six case studies fall into two groups: three artists who broke through on Twitch first, before other streaming platforms (Shigihara, Aeseaes and Sereda) and three artists who brought their fanbase from the traditional music industry world to Twitch (Heafy, from metal band Trivium, mxmtoon and RAC).

The data presented varies by artist. The Shigihara and Heafy case studies include graphs plotting their monthly earnings from Twitch and music streaming, complete with dollar amounts on the y axis.

Aeseaes have a donut chart breaking down their overall earnings, showing that in 2019-20 46% of their income came from Twitch subscriptions and bits; 24% from live song requests (charged for using StreamLabs, a tool that sits on top of Twitch); 17% from Patreon and Kickstarter; and 6% from music streaming and Bandcamp, among other sources.

There’s another metric too: ‘attentive hours per month’, of which Aeseaes are generating up to 30,000. “Because they’re driving the cab!” said Page. “On a playlist like ‘Peaceful Piano’ you can get to five million fans, but none of them will know your name, because that’s the purpose of ‘Peaceful Piano’.”

The graph for Sereda compares her active audience on Twitch and on music streaming services – she draws an audience of around 400,000 people on Twitch but has a Spotify following closer to 6,000 – with Page suggesting that her growth on the latter is “a clear sign of Twitch being additive to streaming elsewhere”.

He added that Sereda’s streams include her songwriting and practice sessions. “She’s monetising what she has to do anyway for her music career, and her audience figures are pretty staggering. She’s got an active audience bigger than the population of Edinburgh on a monthly basis!”

the mxmtoon and RAC case studies similarly focus on the growth of their audiences on Twitch and other platforms. Page hopes that the study will be useful for artists who are starting to think about what to do with livestreaming once the live music industry returns, and they are back on the road for concerts and festivals.

“These huge advancements in livestreaming can’t simply vanish when Reading and Leeds [the UK festivals] open their gates to muddy fields,” he said. “It is entirely plausible that you could have five million people with an artist backstage [watching a backstage stream on Twitch] and then 50,000 people in that muddy field watching them on stage.”

Page also noted that Amazon Music and Twitch have been forging closer links, as sister companies, and that “this would raise questions about where Apple, YouTube, Facebook and Spotify need to go next as well” as livestreaming evolves.

Will Twitch’s involvement in the study risk it being ignored by rightsholders? Page hopes not.

“We’ve got to get to grips with the economics,” he said. “If you want to bash Twitch, bash Twitch on the economics. If you want to celebrate it, celebrate it with the economics.”

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Stuart Dredge

Music Ally's Head of Insight

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