A new change to Twitch's subscription system is set to benefit people living outside the United States. Starting on May 20th, Twitch will be lowering the prices for streamer subscriptions in certain countries to "better align with their local cost of living."
As explained in an official Twitch blog entry, they've heard from fans around the world that the usual $5 price (or the equivalent in said countries) for a Tier 1 Sub is particularly expensive in some countries. According to the blog, compared to active North American users, 50% less users buy subs in Europe and Asia, and that percentage rises to 80% in Latin America. Because of this, Twitch is introducing local subscription pricing, starting with Mexico and Turkey on May 20th and proceeding with a variety of other countries in Q3 2021.
For context, in America, the federal minimum wage is $7.25, which is $1160 a month if you have four weeks of five eight-hour days. A $5 sub per month would be 0.0043% of that monthly wage. Meanwhile $5 is currently almost 100 Mexican pesos, according to currency conversion site Xe, and their minimum wage is about 17.71 pesos per hour. Going with the same calculations for monthly minimum wage, that's 2,834 pesos, and a 100 peso subscription is 0.03% of the minimum monthly wage. A pretty big step up compared to the American price, which is what Twitch is hoping to rectify.
While this change will help creators by making viewers more likely to subscribe (according to pricing tests Twitch ran in Brazil, Latin America, and Europe), how does this affect them with their current subs? To minimize dips in creator revenue during this adjustment period, Twitch is running a 12-month program that will cover their baseline revenue for the first three months and then slowly lower it every three months until their revenue matches how much they'll make under the new pricing model. Once local sub pricing starts rolling out, those eligible for the program can look at their Creator Dashboards to see all the information on the program, such as how much they'd actually make and how much they need to stream to stay eligible. Twitch says based on their tests streamers should see an increase in revenue overall as people in those regions are more able to subscribe.
What do you think of this change? Do you think it will encourage more people to subscribe? Let us know in the comments below!
