Twitch has unveiled an ambitious new program called Local Subscription Pricing, which will see the price of a Twitch subscription adjusted to the cost of living in various areas around the world.
As of right now, all Twitch subs cost $4.99 USD, or the equivalent value in your nation’s currency. However, this means that a sub can be more or less affordable depending on the typical income and living costs of where you live. To combat this, Twitch will be setting individual prices for subs in certain geographical areas to make it more affordable to subscribe to your favourite Twitch streamer.
According to Twitch’s data, “the percentage of active users in Europe or Asia who support creators with a subscription is roughly 50% lower relative to North America. In Latin America, it’s nearly 80% lower.” Twitch says in its announcement post that its aim is to make all users, regardless of where they live, “more comfortable” supporting creators with a sub.
This project will see a gradual rollout, and begins later this week on May 20 with Mexico and Turkey being used as test subjects. The adjustments being made for these countries is considerable when compared to the base $4.99 cost of a Tier 1 sub in the United States.
When the Local Subscription Pricing program begins, a Tier 1 sub in Mexico will now cost 48 pesos (equivalent to $2.40 at the time of writing), while the price in Turkey will be set at 9.90 lira (equivalent to $1.19 at the time of writing).
With an enormous list of participating countries, expect sub prices to drop in dozens – potentially, hundreds – of nations around the world.
Notable exceptions to the list of countries include the USA, Canada, Japan, Israel, and Switzerland.
We’re rolling out one of the biggest changes in Twitch history, which will help creators build larger, more global communities: Local Subs Pricing.
The price of a sub in most countries will be lowered, starting with Mexico and Turkey.
— Twitch (@Twitch) May 17, 2021
While this is great news for users in nations where the cost of living and typical wage make subs less affordable, it could be a cause for concern for streamers. While this will encourage more people to support streamers with Twitch subs in the long term, slicing the cost of a sub could seriously harm a streamer’s income in the short term.
To combat this, Twitch has a complicated-sounding revenue protection scheme. Firstly, Twitch will calculate your “baseline revenue” from Twitch subscriptions, which is done by taking an average of your earnings from subs from the last three months.
In the three months after the Local Subscription Pricing program goes live, streamers are guaranteed 100% of this baseline revenue, so long as they stream for a similar amount of time as they usually do. This means that if you typically earned $1,000 a month from subs, but following the price drops you are now only earning $800, Twitch will give you the missing $200.
From then on, the percentage that Twitch will protect decreases by 25% every three months, meaning that after one year (12 months), revenue protection will end.
What if they added 50 countries in month 10.. and that’s the only time your income was impacted by 20%?
Well, they would only cover 25% of that loss.
A timeline of releases would be helpful to share with the community.
— Zach Bussey (@zachbussey) May 17, 2021
If streamers stream less than expected in a given month, or outperform their baseline revenue, then Twitch will not payout.
The full explanation of the scheme can be found here.
While Twitch appears to have contingency plans for the loss of revenue, many are worried that streamers will still be left out of pocket further down the line.
Others are also worried that by using fresh accounts and VPNs to change your location, users will take advantage of the cheaper sub costs in other countries.
After reaching out for comment, Twitch has confirmed to The Loadout that it has thought about these kind of exploits and says there are “multiple requirements” to meet in order to get the adjusted prices in a certain region.
Twitch has also confirmed to us that the adjustment of prices will only result in discounts, and no country will see subscription prices rise any higher than they are now.
While Turkey and Mexico are up for a trial run later this month, Twitch anticipates that “most countries in Asia, Latin America, the Middle East, Africa, and Europe” will see the program rolled out in “Q3 of 2021”.