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Monetization: How Twitch, YouTube and Patreon work for creators revenue

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Know everything about being paid going in

YouTube

YouTube has a mission: help make their creators money — but not exclusively through ads.

At VidCon last week, the company announced a number of new alternative monetization updates rolling out over the next few months that will help creators get paid for their content. The strategies, which included helping creators to sell merchandise, channel memberships and providing subscribers with exclusive content, were instantly compared to Patreon and Twitch. Patreon allows its users to charge a subscription fee to members for exclusive content. Twitch sells memberships for $4.99 (the same price as YouTube’s new channel memberships) and provide subscribers with exclusive emotes or badges (something that Youtube will now do with channel memberships).

YouTube’s Rohit Dhawan, senior director of product management at YouTube, didn’t acknowledge the similarities between the two membership programs in an interview with Polygon. Dhawan said channel memberships were instituted after talking to creators, and hearing about what services they wanted on the platform. Dhawan also didn’t acknowledge the similarities to Patreon, which Wyatt Jenkins, Patreon’s vice president of product, did later on.

“We’re super excited that YouTube is focusing on membership, this is something that we’ve been doing for a while,” Jenkins told Polygon at VidCon.

Three services offering very similar subscription programs means more monetization lanes for online creators than ever before, but understanding which company pays creators the most or charges the least administrative fees is new, fuzzy ground. This little guide should help clear up any confusion.

YouTube demonetization illustration Ross Miller / Polygon

YouTube

Channel memberships are different from standard AdSense monetization, which changes on a regular basis for many creators. Part of the reason channel memberships were introduced to creators was to help build a more stable monetization structure.

Currently, YouTube’s guidelines state that the company takes 30 percent of creators’ channel membership revenue. This gives creators 70 percent of the $4.99 price tag. Creators must have 100,000 subscribers before they can institute channel memberships.

“Creators receive 70% of sponsorships revenue after local sales tax is deducted,” according to YouTube’s website. “All transaction costs (including credit card fees) are currently covered by YouTube.”

YouTube covering transaction costs is a big deal for people who are used to basing their revenue on Patreon, which operates a little differently. We’ll get to that below.

Creators who belong to multi-channel networks, however, like Maker Studios, should consult with their agency, YouTube’s guidelines state. The monetization breakdown could differ depending on multi-channel network policies.

“Some MCNs may take an additional revenue share, meaning your revenue from sponsorships may be lower than 70 percent if you’re part of an MCN,” YouTube’s guidelines state. “You and your MCN (as applicable) are responsible for complying with all tax laws applicable to your sponsorships revenue.”

YouTube’s guidelines don’t state how much a creator needs before they can payout (but it’s safe to assume it’s $100, like YouTube currently does with AdSense).

Twitch Twitch

Twitch

Twitch currently operates on an approximate 50/50 split for streamers, according to multiple reports and streamers’ testimony. That means for every $4.99 subscription, the creator receives approximately $2.50. There are different subscription tiers, though. People can choose to charge $4.99, $9.99 and $24.99.

There are two different programs for streamers to earn monetization revenue through subscriptions: affiliates and partners.

Affiliates are streamers who are not quite followers but have “at least 50 followers and over the last 30 days have have at least 500 total minutes broadcast, 7 unique broadcast days, and an average of 3 or more concurrent viewers,” according to Twitch’s site. Twitch Partners don’t have any quantitative criteria attached to their applications. Instead, Twitch’s site states the team is looking for “broadcasters that have large viewership and have built up a strong sub-community of their own.”

“Our ideal Partner candidates engage their audience, produce amazing content, and find ways to stand out from the crowd,” the site states.

The two main differences between affiliates and partners are the payout procedure and the ability to run ads. Affiliates can soon run ads on their channels, according to Twitch’s site, but that isn’t available yet. Partners can run ads, and their payout expenses are covered by Twitch. Affiliates will have to pay for that transaction themselves.

This means partners won’t be charged every time they to cash out their earnings. Twitch’s FAQ page does state that this stipulation does not include “fees if you wish to convert your payout to your local currency.”

Patreon Patreon

Patreon

Patreon currently takes five percent of processed payments. That means users take 95 percent of revenue they make from subscriptions.

The biggest difference between Patreon and Twitch/YouTube is the payout process. Payout fees and payment processing fees are charged.

Payment processing fees are described as “the cost of moving funds from your patrons to your creator balance.”

“Payment processing fees represent the amount that our payment processors (e.g., Stripe and PayPal) charge each time they process a payment,” Patreon’s site states. “Payment processors typically charge a percentage of each pledge plus a fixed number of cents.”

This means that payment processing fees will change for creators depending on the number of subscribers they have each month.

Payout fees are described as “the charge for moving funds from your creator balance to your bank or PayPal account.”

“This is taken once you transfer funds out of your Patreon account and toward Paypal, Payoneer or Stripe,” the site states.

These charges are typically 25 cents per payout for American Patreon users and $3 for international users.

What’s important to remember about all three platforms — YouTube, Twitch and Patreon — is that they’re often used in conjunction with one another. You don’t have to just use one platform. Many YouTubers will stream on Twitch or use Patreon for exclusive content. This breakdown should just help you prepare for understanding how much revenue you can expect — and charges you’ll have to pay — based on each service used.