The content creation landscape in Twitch is changing, especially for DJs who make money from their streams. Record labels are now introducing licensing fees for these creators, and Twitch has teamed up with major labels to facilitate this.
Licensing Fees for Twitch DJs
Record labels are set to introduce licensing fees for Twitch DJs, impacting creators with monetized streams from this summer onwards. Twitch has partnered with major record labels in an unprecedented move, mandating DJs who monetize their streams to pay a fee for using songs in their live sets.
While the exact percentage allocated to these labels remains undisclosed and varies based on the chosen monetization approach, it was reported that DJs and Twitch would evenly divide these fees, with Twitch initially covering over 50%, although specific figures were not disclosed.
Twitch plans to provide a one-year subsidy to certain DJs to offset the gap between their earnings and the fees paid to labels. Details on how the subsidies will be distributed or if they will cover all licensing fees remain undisclosed.
However, Twitch mentioned that subsidy amounts will decrease as the program gains traction. With numerous DJs on the platform, clarity on this matter is essential.
This program targets explicitly live-streaming DJs and does not extend to other music uses. DJs must actively agree to a new arrangement that covers all streaming activities on their channel. For those who only DJ part-time on their streams, it is advisable to set up a separate channel dedicated solely to DJ live-streaming.
Twitch logo is seen displayed on a phone screen in this illustration photo taken in Krakow, Poland on April 30, 2021. (Photo : Jakub Porzycki/NurPhoto via Getty Images)
Impact on Twitch DJs
This development presents a silver lining in the situation. It pertains solely to DJs who earn income from their streams, meaning that hobbyist DJs who don't monetize their content won't be impacted financially.
While record labels will still benefit from these streams, Twitch will shoulder the financial burden thanks to advertisements on non-partnered channels. However, Twitch's plan to provide this support for a long time is uncertain, raising questions about its long-term sustainability.
What prompted Twitch to make this change? According to the company, the previous model, which did not compensate labels or artists, was deemed "unsustainable" due to various copyright concerns that differ from one region to another.
By implementing this new system, Twitch aims to avoid DMCA takedown notices and copyright violations. The program will be launched officially this summer, coinciding with the introduction of a new DJ category for streamers.
It is worth noting that the agreement mentioned pertains to record labels, not individual artists. Whether these labels will distribute funds to creators fairly and promptly remains to be seen.
Dan Clancy, CEO of Twitch, provided insight into the upcoming changes, emphasizing the importance of informing DJs beforehand. He said that when the program launches in the summer, DJs can opt-in without an immediate financial impact.
Clancy also cited the introduction of a new DJ Category shortly after the program's launch, encouraging DJs to review the program details to understand better what lies ahead.
