Why DrLupo and TimTheTatman left Twitch

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When top streamer Ben “DrLupo” Lupo said goodbye to Twitch last week, it came as a shock. When Tim “TimTheTatman” Betar, an even bigger name, followed him to YouTube just a few days later, the streaming world reacted on its head. However, the fact that Twitch is letting two of its stars go doesn’t mean the company is losing its stranglehold on the live streaming industry. Instead, departures from the platform are the result of intentional changes in the company’s approach to exclusive deals with major streamers.

According to several former Twitch employees who are familiar with the company’s strategy, Twitch has started offering big streamers less money for similar amounts of work, or in some cases no longer offering contracts at all. Several former Twitch employees and members of the streaming industry with knowledge of Twitch’s contract offers say that Lupo, in particular, was “lowballed” by Twitch, making YouTube’s offer more enticing. The industry members and former Twitch employees spoke to The Post on condition of anonymity as they were not authorized to speak publicly about these deals. Lupo, Twitch and YouTube declined to comment on contract details.

The allegedly lower offer was in reference to Lupo’s previous contract, which was negotiated two years ago, around the time that several major streamers – including mainstream darling Tyler “Ninja” Blevins and first-person shooter mastermind Michael “Shroud” Grzesiek – were signing up – Left Twitch. Some went to YouTube Gaming and others to Facebook Gaming, while Blevins and Grzesiek struck deals with Microsoft’s now-defunct live streaming platform Mixer. This exodus motivated Twitch to retain its remaining stars with more attractive contracts.

But now the game has changed. When Blevins and Grzesiek switched to Mixer, their audience was significantly reduced. Mixer dropped out last year, and both Blevins and Grzesiek eventually returned to Twitch. Where it once seemed like the live streaming industry was on the verge of a sea change, Mixer’s bold salvo only reinforced the status quo. Not only that, it has shown that when many viewers in the Twitch ecosystem are robbed of their favorite big streamers, they will simply find other Twitch streamers to take their place.

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By the end of 2020, Twitch accounted for over 65 percent of total live streaming hours viewed — compared to YouTube Gaming’s 23 percent and Facebook Gaming’s 11 percent — and remained the leader by a wide margin. This is a particularly impressive feat considering that YouTube and Facebook are far larger than Twitch in terms of sheer user counts. The former two sites have a user base of nearly 3 billion and 2 billion respectively, while Twitch is visited by approximately 140 million unique users per month. (Twitch is owned by Amazon, whose founder Jeff Bezos owns the Washington Post.)

Now Twitch operates from a place of trust. This makes it possible to re-evaluate previous deals made when streamers had more influence.

The change has a lot to do with how Twitch is structured. Streamers have several ways to make money: paid subscriptions and donations from viewers; dealings with brands; and advertisements that function similarly to those played before and during YouTube videos. Twitch, like most modern platforms, gets its best business from ads. However, streamers don’t play ads because they pause their broadcasts, increasing the likelihood that viewers will abandon the site or miss a big moment. Partly due to this misalignment of goals, Twitch tends to sign major streamers to polish its brand — not to directly generate revenue.

“The public has a very uninformed view of the economy of Twitch,” said a former Twitch employee. “Any time [a streamer’s] been paid a ton, it was much more about brand than [the company’s return on investment]. E-commerce on major channels tends to grind to a halt at some point and streamers don’t want to run ads – if that’s the big upside of Twitch.”

Twitch structures contracts to accommodate this somewhat. Rather than paying a lump sum when streamers sign up, many contracts also include guarantees that streamers will pay extra money as they approach a set minimum broadcast and ad serving time. However, this has not reliably ensured that streamers actually meet their minimum requirements. In cases like Lupo’s, people familiar with Twitch contracts said, Twitch is now trying to reduce the amount streamers get paid for honoring their contracts. And then it offers that kind of exclusive deals in the first place.

Ryan Morrison, an attorney who runs Evolved, a talent agency that represents Twitch streamers like Félix “xQc” Lengyel, confirmed that Twitch is offering fewer exclusive contracts worth less money. “And outside of [North America], it’s next to none – at least in my experience,” he added. “That’s not to say there aren’t some very lucrative and amazing deals still out there, but it’s not where it used to be.”

Star streamers like World of Warcraft and Final Fantasy XIV kingpin Asmongold (who hasn’t released his real name) have also recently spoken out about how Twitch has declined to offer contracts.

“My understanding,” Asmongold said of his own missing contract during a stream last week, “twitch didn’t like that I was really tough on them last year in terms of the ads, especially forced mid-roll ads.”

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An industry member said that in their experience, some Twitch employees specifically cite the previous round of streamer departures in their current decision-making. “The streaming wars are over,” they claimed, a Twitch staffer told them. “We won.” However, they also noted that Twitch is a company with many different teams that don’t always agree, and others disagree with this stance.

Lupo’s situation is a case study in all of this. A dedicated charity streamer who regularly volunteers for various causes, he was an ideal extension of the Twitch brand. But as he previously told the Washington Post, he also wants to spend more time with his family after years of enduring a grueling streaming schedule.

Twitch’s new terms put Lupo in a difficult position: he should have streamed a similar amount as before, but for less money. YouTube, on the other hand, made him an offer that he said would allow him to stream less while ensuring it was “safe for life.” That’s the offer he finally accepted.

Last week, the other outgoing Twitch star, Betar, told Business Insider that similar priorities were factored into his decision to make the switch to YouTube. “The reality is,” he said, “now that I have my wife and son, I’m having a hard time streaming as much as I used to.”

Devin Nash, chief marketing officer at content creator-focused talent agency Novo, pointed out that YouTube’s contracts start at 100 hours of streaming time per month, while Twitch’s start at 200.

“It gives you a reason why people might consider something like this,” Nash said, noting that he’s particularly interested in how other older, salaried streamers are changing their own careers following the Lupo and Betar YouTube deals could.

Ryan Wyatt, head of YouTube Gaming, said that giving streamers a better work-life balance is a big priority for him.

“I think stream grind is a real thing,” he said. “I think stream burnout is a real thing. I’m not trying to get people here to stream 150-200 hours a month. I don’t think that’s healthy. It’s not what we’re trying to create on YouTube.”

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