How Much Money Could Twitch's New Feature Bring In

TNL Take: In June of 2016, Twitch introduced bits and cheering and provided another means of monetization for streamers outside of subscriptions. In the simplest terms, viewers purchase bits (the lowest price is $1.40 for 100 bits) and then give them to streamers in the form of cheering.

 Twitch Bits (Photo: Twitch)

Twitch Bits (Photo: Twitch)

I thought the feature was amazing however it lacked 1 key element: Brands. My idea was this:

  • Custom Bits for Brands
  • Let Streamers/Brands give them away to their audience for Free
  • Audience donates the Brand Bits in the exact same manner and the streamer gets paid on the same revenue share of $0.01 cent per Bit — but charge a 0% Fee — as Twitch will already monetize on the Ad side

While that wasn't implemented, you can watch a Video Ad to earn bits instead of paying - more on that later.  

Last week, Twitch unveiled a new integration for viewers to use Bits and Cheers to support their favorite teams in Overwatch League.

 Overwatch Hero Emotes (Photo: Twitch)

Overwatch Hero Emotes (Photo: Twitch)

Here's the interesting part: the revenue generated won't be shared with the teams but goes directly to Twitch and Overwatch League.

How did Week 1 fare?

 Total Overwatch League Cheers (Photo: Twitch)

Total Overwatch League Cheers (Photo: Twitch)

Over 21M+ Cheers were contributed by the community which also has an overall goal total to unlock more goodies for Overwatch fans. With a few assumptions, here's how much was generated:

  • At the cheapest conversation rate of 100 bits for $1.40, the total haul would be ~$300,000
  • Lower the weekly run rate to $250,000 to be conservative
  • $1M potential revenue each month

While that maybe a drop in the bucket; all the drops will be necessary to recoup the estimated $90M that Twitch paid for media rights.

I still believe that Brands can be integrated into this ecosystem outside of Watch-to-Earn videos and hopefully will be coming soon.

Further, Twitch continues to evolve from merely lean-back, passive viewing to more engaging and community driven features.