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Tracy Chan on Twitch Music, Helping Artists Monetize, and the Creator Economy

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Twitch’s VP Head of Music, Tracy Chan, came on the podcast to talk about how artists on Twitch are making money. The number of artists making $25,000 on Twitch has grown 16x since the pandemic started. For those making $50,000 or more, the median viewership is 183 fans. That’s wild! We talk about how artists use the platform, gaming culture’s influence, and where the creator economy is heading.

Tracy joined Twitch in 2020. He left Spotify where he launched Spotify for Artists, and worked at YouTube before that to help launch its creator platform. Tracy has seen the creator economy at every stage. If you’re interested in this topic, this is the podcast for you.

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guest: Tracy Chan, @tracypchan, twitch.tv/music

Link: Twitch’s Rockonomics – a case study on how musicians make money on the platform

Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo.  trapital.co/newsletter

Transcript (please excuse any typos!)

Dan Runcie 0:07
Hey, welcome to the Trapital podcast. I’m your host, Dan Runcie. Today we have a special guest, who is the head of twitch music Tracy Chan. Welcome to the podcast.

Tracy Chan 0:18
Hey, Dan, great to be here. Thanks for having me.

Dan Runcie 0:20
Yeah, I’m glad you can make this happen. And it’s funny, I’ve been following your moves for a little bit, because even before you’re at Twitch, you were at Spotify. And you had made some great moves there, especially being one of the people pushing Spotify for artists. And it’s just been fascinating to see everything that platform has built in common the past few years. But I gotta imagine, it must have still been like a tough decision to leave that then go join a company like twitch considering all you built where you clearly saw everything going and streaming.

Tracy Chan 0:52
Yeah, I mean, this is one of those moves where I was going back and forth. I mean, it was incredibly hard decision. Just because, you know, like you mentioned, we did a lot of good work with Spotify for artists, the team is still doing a lot of good work. I love the team. I know just how important Spotify for artists and just like tools like that are, you know, to really help artists understand what’s going on and connect with their audiences. But man, the opportunity at Twitch, it’s literally just been even bigger than I thought it was. So I can’t imagine being in a better place.

Dan Runcie 1:24
What did you think the opportunity was gonna be like? Because you mentioned, it’s a lot different than what you imagined that.

Tracy Chan 1:30
So I think, you know, one of the big reasons I joined twitch was, what I was hearing just consistently from artists and their teams is we want to get to know our fans, we want to know who our fans are. And so at Spotify, you know, it’s like in Spotify for artists, you know, we built more charts and graphs describing who the fans are, you know, where they’re listening from, how they’re discovering, and that sort of thing. And the feedback was, no, no, we want to know who the fans are, like, I want to have a conversation with them. I want to know, you know, what about my music is really resonating with you? How can I lean into that more of that kind of stuff.

And so when I started talking with the twitch team, that was the cell was, even though it’s known for video games, at its core, it is creators building a community around fans, and just regularly engaging with them. It’s not just like fans, like really getting to know who the Creator is themselves, but it’s the creators, knowing the fans as well. And like their community. And like that mental shift was like, oh, there’s a big opportunity here. And so, you know, that was the premise in which I joined is like, this is a huge, you know, need, you know, in the music marketplace, especially, you know, with all the changes from mp3 to streaming, and just kind of that world global audience was like, want to get to their fans, twitch had kind of just that perfect feature set. And really, it was like, how do we then, you know, translate it for musicians to help, you know, just build their communities.

So that’s what I thought the the big opportunity was, you know, when I started to kind of dig in, and, you know, really work with a team of just what’s going on. And of course, you know, COVID had started taking off, when I joined, you know, what we started to see was, actually musicians are making significant money. He, I mean, you know, the backdrop of there’s a lot of criticism in the music industry today where musicians kind of see the music industry is growing, but you know, they don’t see their paychecks growing as fast. And in fact, you know, there’s just so many artists out there, there’s more artists than ever before. I think the latest number I heard is like 60,000 releases a day or something like that.

And the money’s just getting smaller and smaller for artists. But when we were looking at Twitch, you know, what was happening, especially for those artists, you know, even pre COVID, who were just building their communities on, folks like Megan Linnaeus, Raquel, there’s this artist named cereda. She built her community on Twitch, her story is so great, because, you know, she was in Canada, she came to LA to pursue her music dreams, just like most musicians, while you’re pursuing your dream, you got to have that second job to kind of make ends meet. And so she was a Postmates delivery person, but she found Twitch, she was able to build up that audience. And, you know, what she was doing was, what musicians do, she was writing music with our community, she was producing your recording. And, you know, she got to a point where she was living off of the money that she was making on Twitch from the support of her community. Her EP charted on Billboard, because, you know, her community really rallied and gave her support for that album. So that was a long story of saying, you know, really just what’s happening on Twitch is is incredible is, again, artists are making real real money.

And so, you know, we track a couple of things. One of the stats or tracking is, you know, how many artists are making $25,000 or more on Twitch, and this is $25,000. net to the artist. And, you know, in COVID, from January 2020 to February 2021, that number has grown 1,635% like it’s 16 Next, I mean, it is insane. And that is just like real, real money, especially if you think in the backdrop of, you know, all the ways that artists can make money. You know, this is real, real money, and then what was like really shocking to me and where I think this is just a massive Opportunity is, is when you think about the average viewership. For those making $50,000 or more, the median viewership is 183 fans.

And to me that was just like, this doesn’t make sense. Because, you know, I came from YouTube and Spotify in the world where you know, everyone is taught, you need the millions of things get right, millions of followers, millions of fans, millions of streams, video views, likes, whatever it is, because the economics are challenging. And so if you get the millions of things, then you can make some money.

And you know, with a few 100 fans, you can make that significant amount of money, I think there’s just such a massive opportunity for artists to do if they’re interested, you know, and if that’s kind of a motivator for them, twitch could be a place where they can build that community, make some money, and then just imagine all of those things. Because, you know, a lot of choices are just made on how can I make ends meet, when you make kind of creative choices and business choices with that, then you kind of have a little bit of financial freedom, but changes the game like completely. And there’s just lots of tools out there, in which you know, you can make different decisions, if that’s what you want.

Dan Runcie 6:03
That’s impressive. Let’s break down that number. Because I think it would be good to hear a little bit more. So you can make $50,000 plus from under 200. Fans, if you’re monetizing it in the right way. What does that look like? So what is the creator offering, and then what are the fans purchasing on the platform?

Tracy Chan 6:22
So Twitch is all about just creators and fans, and it’s literally put them together and get other way magic happens. And of course, like, you kind of have to need tools in order to facilitate that. So we have a couple of products that work super, super well. So first and foremost, as a viewer, you can subscribe to an artist channel. And so you know, you pay anywhere from 499 and upwards per month, you know, we rev share that with the artists. And so, you know, artists are definitely building up their subscriber base, when it’s direct support, as opposed to you know, other subscription models where it’s a pro rata model, or goes into a poll, and it’s distributed by market share, whatever it is, but this is just, I love this artist, I’m gonna go support them in subscribe to them.

Second, we have kind of what we call bits, which is our virtual currency, and you can share bits to show your support, and it’s, you know, down to one set up and two, you can literally do 1000s of dollars. And you see that happen, actually, not infrequently, which is super, super interesting. And we can talk about that in a sec. And then there’s, you know, direct donations, and then there’s ad revenue as well. So if you run ads on your channel, we share that with the creator as well. And I think kind of what’s great about having just these different dynamics is different artists use them in different ways. So you see, very, very often, you know, a bunch of creators just have a subscription goal, and you put a goal in front of a community, and the community will always try to hit it.

So that’s a great mechanism. And we have, you know, folks who take song requests. And so if you take song requests, anyone can request a song, but you know, subscribers, or those who share a certain number of bits or give a certain direct donation, get their songs prioritized. So you know, that can be a really, really powerful method. That’s kind of the base layer, we have community on top of it, community based features on top of it. So a great one is gift subscriptions. And so you know, if you have a bunch of people in your room, and you have a super fan, that superfan can give away one gift subscription to someone else in the room, they can give 100. And again, you see this pattern. And again, it’s all about that super fandom, because you can see as the creator, you know, who are your big gift subscribers, who are your big donators, that sort of thing.

And obviously kind of, you know, fostering that relationship appropriately, helps kind of unlock more monetization, there’s lots of lots of ways that it just works really, really well. And I think the most interesting part of this whole dynamic is, again, I’ve worked in various places in the music industry. And I think what’s special about the twitch platform, because it has its roots in gaming is, you know, the viewers on Twitch, they expect to support their favorite creator, it’s ingrained in the culture, you know, and you see who’s the subscribers, you know, you see who has those custom emotes, and that sort of thing. It creates that environment where it’s like, yep, we’re here as a community support the Creator. Whereas, you know, even if other services, you know, have similar dynamics, you may not be there to pay. And so I think kind of, you know, that’s really a huge advantage that we have.

Dan Runcie 9:20
And that part is fascinating, like, Are there specific things that you’re doing in order to create that? I know, you mentioned emos. And it sounds like there’s some gamification. But I could imagine that having a certain type of user that’s used to be able to consume content for free and getting them to come on the platform. There’s the culture that’s there, but I’m sure there’s probably things you’re doing to help accelerate that too.

Tracy Chan 9:40
It’s actually interesting because there’s probably two dynamics in two types of audiences. So there’s the twitch audience in and of itself. And the thing about the twitch audience that I think people forget is they’re like twitches, a gaming service. It’s all kind of gamers who love video games, which is true, but gamers love lots of things, right? They love music. They love sports. You know, they love movies, and TV. It’s not just like one thing that they love. And it turns out, you know, especially for gamers, it’s either the number one or number two category preference of our audience. And so it turns out people love music, and they love creators.

So we have that in our favor. And you know, that’s where creators come on to the service. And we have an audience for them kind of already, that said, you know, as they’re pulling in their fans into the service new, especially kind of music fans who maybe are less interested in video games, it’s that behavior from that gaming audience who you know, knows how to subscribe and all that they’re teaching kind of this new music audience, hey, you know, this is how you support the creators, these are the things that you get.

And, you know, again, that’s why things like get subscriptions just are so great, because it enables potential fans to get those benefits, and you know, renewed the benefits on their own. So there’s kind of lots of interplay between those audiences and products that really kind of bridge the gap of like, I really don’t know what to do to, I’m going to subscribe to you and subscribe over here. And I really love you. So I’m gonna give you you have 10 gift subscriptions. To show you that extra less

Dan Runcie 11:05
interesting, I could definitely see that with the gaming community. There’s a bit of that like a cult vibe that is just so strong there and seeing some of the artists like why the end and Amir, for example, I know that he was so big, early on, I know that Danny Brown had done some things too. And I think now you’re starting to see people that aren’t just of the gaming type because I think that was the vibe for you know, a few years if you were a hip hop artist that was big and gaming twitches for you Go do your thing. However, I think now just because we’re starting to see so many different types of creators and people, entertainers using this to livestream things, it’s starting to expand a bit more

Tracy Chan 11:41
to what you’re saying about expansion, or seeing is just like the use cases in music, actually, that creates a lot of opportunity. So like one of the awesome things that we’re seeing is just like music producers, people making beats or mastering songs, folks like Kenny beats or mixed by alley, you know, they’re coming on. And this is like just stuff you would normally be doing, you know, you’re always going to be producing, you’re always gonna, you know, be in Ableton or logic or whatever software you’re using. What twitch affords you is like, you’re playing all of your fans into the studio. And you know, like fans, just like who get that experience. It is just so magical. You know, I think one of the key things about twitches is like let them affect what’s happening kind of in stream.

So a great example is like Alamein, you know, a producer, you know, he’s produced Beyonce, and Jay Z and Kanye, all the greats, he like created an EP during the Black Lives Matter movement and kind of donated all the proceeds to charity. But, you know, he featured fans selected acapellas and beats in the creation of the content in and of itself. And I think that’s what’s super exciting, on top of just like monetization in general, pulling your fans into the creative process, being able to just monetize the creative process. And it’s not just, you know, you go into the studio, maybe you take Instagram pics, or whatever. It’s like, no, they’re there they’re contributing, and when the fans just feel ownership over the content, just magic happens.

So that’s a huge prime example of just more things you can kind of do on Twitch, you know, just from a format perspective. I think you mentioned Joe, there’s definitely lots of hip hop artists, he loved video games, because hey, just like gamers, like music, musicians love video games. It’s a thing. But I think the other thing that we’re seeing as well is just like innovative formats, because it’s like live ephemeral, and visual. So like one of the like, awesome things that, you know, we see is freestyling over chat. So we have guys like MERS, and the dapper rapper, literally, they tell their community type of random words and chat, and they just freestyle over them. And it is so amazing. It’s that format that it only works on live because like on a YouTube video, of course, you can like cut it and like whatever. But it’s kind of like those moments to where like, oh my god that they just really do that, which just makes the community just that much more generous.

Dan Runcie 13:53
I like that. It’s fascinating, because a lot of it is based on the mindset of having your 1000 true fans, right. And that Kevin Kelley essay was written in 2008. And it feels like just now a decade plus, we’re finally starting to see what that looks like when the tools are made even easier to do that. I feel like there’s clearly been phases throughout the past decade. But now it’s even more.

Tracy Chan 14:18
I do have Kevin Kelly’s essay and his hypothesis kind of coming into Twitch, but I didn’t necessarily understand it applied to twitch until I saw what was happening. There’s a update to that. There’s a VC named Legion, who said, actually, you know, so 1000 true fans is the 1000 true fans pay you $100 a year you make $100,000 that’s a nice living Legion did an update maybe I think it was last year, the year before 2019 2020. And her update was it’s not 1000 true fans giving you $100 it’s 100 true fans giving you $1,000. And I think kind of you know, that’s a really interesting dynamic because, again, to your question earlier, like what are we monetizing?

It’s not The performance itself, it’s the interaction, it’s kind of the proximity. It’s kind of the collaboration between creator and community. Those are the types of things that really get, you know, monetization going. You know, we have this feature called the hype train where basically if a bunch of people are supporting the artists by subscribing or cheering bits and things like that, it creates kind of this hype moment within the channel. And so it sets a goal and so as people you know, continue to contribute and subscribe or give subscriptions, it unlocks benefits for the channel. So more custom emotes, you know, everyone that participates gets things like that. And again, it’s just the community really rallying towards their favorite crater. What could be better?

Dan Runcie 15:42
Yeah, I mean, the timing is great. One of the things I’m curious about for you all, because I’ve been seeing some of the reports, I saw that twitch rock nomics report that came out, I thought that was really fascinating and a great way to pitch everything that’s out there. And you’re clearly trying to get as many creatives as possible to a understand the landscape, but be use your platform as an opportunity to help monetize and to build their career on what are some of the ways in the tactics that you’re doing in order to acquire more creators acquire more customers,

Tracy Chan 16:12
a lot of it is is just us telling our story. And actually, more importantly, the artists telling the story as well, because it’s really those artists who are kind of paving the way, folks like Mike Shinoda, like he’s trailblazing what’s possible on Twitch, you know, the dude was born in COVID, he came on, he created three peas with his audience, that was awesome. He’s like giving the support. And then what is he do this year, he’s like, I’m just gonna produce a bunch of musicians within my community and on Twitch, and so he’s produced 30 different tracks.

So I think a lot of it is when artists are showing kind of other artists, this is what’s possible. And this is kind of what the rewards could look like, whether it’s, you know, just that getting to know your fans, and, you know, building up that community who’s going to support you on other things like cereda, and getting her album on Billboard, the money is actually quite meaningful and impactful. So I think kind of, first of all is, is you know, us being able to kind of tell our story, make sure artists can kind of tell the story that they want to be telling as well, I think that’s the first part. We’ve also, you know, partnered with a bunch of services like distrokid, United masters, SoundCloud bands in town, to make sure that artists who are qualifying on those services, you know, they’ve shown a dedication, they’re artists, they have music, and they have a fan base, to help them kind of use those requirements to unlock what we call affiliate status. So affiliate status means you can start earning revenue and create channel benefits, like the emotes and things like that, it’s kind of like working with those partners as well to really make twitch known and accessible and easier to kind of use for those musicians using those services.

And then I would say to kind of the last thing is is, you know, through this last year, I mean, it’s been incredibly tough for everyone having live shows cancelled, and venues closed, and things like that to so we actively partnered with a bunch of promoters like rolling loud, in companies like red light management, to kind of set up content series, because again, when you can see yourself as an artist on a service, that makes it not so scary. And you know, on top of that, it’s great content, our audience loves the content, they get to know music more.

And then also, it’s just in that hard gear. It’s funny, like, I haven’t seen a live live show in real life in a while. And I’m like, so ready to do that. Because it’s been a while. And that’s a very important part of my life. But it’s funny, like I’ve seen more live music period, kind of through COVID because of Twitch. And I think our ability to kind of help support the creative community, both in terms of the artists who kind of lost so much during COVID. But also, you know, the all the buffs behind the scenes players, like it takes a lot to get a festival up. And so by investing kind of in festivals and promoters and venues and things like that, to help them bring their shows on Twitch with a that, you know, that helps. You know, we are a friend to the music industry, we’re going to help everyone uplift all boats.

Dan Runcie 19:06
Yeah, I think that being able to do those partnerships makes a lot of sense. Like I saw the United masters one I think the headline for that came like in the past week or so, the distro, kid One, two. Yeah, I mean, that’s where the artists are. So I think for a lot of it, I’m curious what the messaging is like, because I feel like there’s a few things that Twitch is trying to communicate to creators, it’s both hey, here’s where we sit relative to something like Spotify, if you’re only going to rely on the digital streaming providers.

Here’s where we also say relative to something like Patreon or some other type of super fan 1000 true fan monetization platform. But here’s also where we sit relative to Instagram Live or some of the other live stream services that have popped up especially in the past year given COVID. Do you feel like you’re always needed to communicate each of those? Do you feel like there’s one of those that you’ve been focusing more on for creators?

Tracy Chan 19:58
Yeah, it’s a great question. So I mean, I think the way that we think about it is, we are a creator, first company. And I’ve just like built my career on supporting creators. And so all of the options like if there are more options for creators, everyone is going to be fine. And like I mentioned, there’s just been an explosion of creators out there, right? I think SoundCloud mentioned, they have like 25 million artists actively uploading content every month. And so more options where they can either build a fan base, they can kind of get distribution, they can make some money, it’s just good for the overall industry, I think kind of the where we sit is, is we want artists to consider Twitch, because it is new, because you know, people think of us as gaming and things like that. And so it’s part of it is just opening up the conversation of, hey, if audio visual and live is your thing, here’s what they were words could be, here’s the artists that are doing it and doing it really, really well. I think kind of that’s really, really our goal, because different services have just different requirements of efforts, or focus or that sort of thing. And there’s just no one size fits all. I mean, just think about like touring, we know, like most artists make their money on touring, but touring is hard, you got to be away from your family, it’s a grind, you know, yeah, you’re going to all these places, but you’re really seeing kind of the hotel and not anything else, you got to look your gear. And you know, it’s a tough sell. But that’s like a really, really good path for a lot of hours to make money. Commercially, not everyone can tour, it’s an opportunity. And so again, you know, our messages, there’s lots of ways in which you can, you know, build that audience, you can make some money, Twitch is a really, really good one, especially because what we’re seeing is it doesn’t take much, it takes some dedication. And you know, I think kind of that’s the differentiation for us. Because, again, every time you go live, it’s a chance to interact with your fans, you get to know them better, you get to know who shows up on your schedule versus on their schedule, and you get to see kind of those rewards and monetize every single time you go live. That’s not for everyone either. But you know, if that’s kind of your aim, we can be really good place for you.

Dan Runcie 22:01
I know that for instance, like on YouTube, they have the Creator Academy there, right. And, you know, I’m preaching to the choir here, you know, this is better than anyone. But you know, it’s helpful for onboarding. So a twitch on, you know, similar type of ways to be like, hey, you’re new here, here’s how we can help you get up to speed.

Tracy Chan 22:16
Yeah, so we have artists at twitch TV, which is kind of our camp creator, for musicians, that’s the start, we have a bunch of videos from musicians who are on Twitch, you know, here’s kind of best practices, here’s what made me successful, and explains out, you know, here’s the different mechanisms, whether there’s the setup that you need, the gear that you need, what are the different revenue lines, things like that.

So that’s kind of the start. And again, working with, you know, our partners like united masters in district kid, SoundCloud, what we’re seeing is, is, you know, United masters put together this awesome panel at select con, which was a couple of weeks ago. And again, they just had their artists saying, this is what we’re doing. This is what we’re seeing working, which I think is really awesome.

Dan Runcie 22:57
I feel like those partnerships are key. And I know they’ve done some great work, just expanding all the types of partnerships they’ve done, as well. And I think a lot of them have been at least up to date more on the brand side. So it’s also good to see more on the monetization piece of this too.

Tracy Chan 23:11
What’s great about you know, those partners, you know, United messenger and district kid SoundCloud is they’re there to make the artist successful, too. We love working kind of with those partners who are like, here’s different places in which you can be successful. Again, recognizing that it’s not one size fits all, creativity, and music is never that. And so it’s just like, whatever works for you. And it’s not like I do this, or I don’t do this. It’s just how much time are you going to put into it? How much effort Are you going to put into it? And then see kind of the rewards, you know, relative to that.

Dan Runcie 23:41
That makes sense. One thing that I’m interested in, in the creative space, I’m curious to get your thoughts on this is how platforms are able to sell the average experience or what can be expected as opposed to some of the more unicorn success stories like a someone that writes a newsletter, so many people will talk about the success of someone like Ben Thompson, what he’s done with Stratechery, but there’s only so many of those. And I think we’ve seen some of that with substack as well with some of the great examples they have there. Is that something similar for twitch? I think my gut tells me that given the fact that you can run a pretty successful operation with less than 200 fans, a bit of that is less of a issue there. But relatively speaking, is that still something that you all are focusing on?

Tracy Chan 24:25
Yeah, I mean, I think the beauty of twitch again, is it’s whatever you want out of it. I think we definitely have, you know, the big guys like Mike Shinoda from Linkin Park, we got t pain, you know, logic, and we will continue to work with, you know, these big artists who are just really, really successful. And then we have, you know, artists who, they’re grinding it away, they’re being successful, they’re building their community from ground one, and they’re seeing kind of the fruits of their labor. And so it’s really kind of what you make out of it, because we do have, you know, quite big artists using twitch today and some of them you know, monetization is just really not Important.

And it’s really that I just want to get to know my audience. I mean, we have like Megan, Thee Stallion a couple months ago playing Mortal Kombat with their fans, do whatever is authentic to you. Like, that’s the kind of most important thing. And then I say like, but what we see is, you know, when you have more opportunities, just open up your creative process to whatever you want. That’s when the magic really happens.

Because I think, you know, a lot of artists think of Twitch, especially with the backdrop of COVID, as, okay, I got to take my live show and just put it online. And like, that’s not it, it is to a degree, yes, you want to take all of your fans and put them in the front row of your show, yes, do that. But it’s also taking them to the green room and hanging out with them. It’s also you know, taking them into the studio, and creating with them. And so again, it’s just whatever is authentic to you, as an artist, we’re here for it. And that goes for the, you know, the biggest artists in the world. To those just getting started.

Dan Runcie 25:54
You mentioned Logic earlier. And I know that last year, he signed a pretty big deal with twitch to have exclusive live stream type of partnership. What does that partnership look like? And do you think that’s something else that you may try to do with other artists that are at his level?

Tracy Chan 26:09
So I mean, Logic was kind of our first big music partner. And again, you know, how you grow services and usage is you get the artists there, right, because that’s how all the social services grow. And I think, you know, really, the key is, you know, when you as an artist, again, you can see yourself on a service, you’re like, Oh, I can do that. And so we’ve had a lot of success with logic. I mean, he did kind of an album release, he’s making beats, he’s playing chess, he’s reviewing dance, admitted music, he’s doing performances, again, it’s just like, that’s what’s authentic to him.

And because he’s doing so many different things, it’s been great, because different artist will be like, Oh, I can do that I beat make all day long, or I’m great at like, freestyling, or whatever it is. So I think that that’s been really, really great. And yeah, well continue to, you know, work with artists of all sizes. And the demand is pretty high. I think, figuring out just like, again, the audience draw is really, this through line of like, you can just like actually talk to your fans, you can get to know them by name. It’s funny.

The other day, I think a Lil’ Yachty did an interview. He’s on like, every day, and he’s talking with his community. And I think he had a quote, something like, if one of my twitch fans kind of saw me in the street, I would say what’s up and they wouldn’t freak out. Because like we talk every day, that kind of relationship with your fans, like, we’re breaking into this new world where you can have it and at scale, because in social like that interaction is great. If you get a like, or that sort of thing. It’s great, but it’s not deep. And I think kind of, you know, that’s what twitch really provides. Yeah,

Dan Runcie 27:40
I think that’s a good way to look at the breakdown. Because I think in a lot of ways that Spotify relationship is almost closer to that Instagram type relationship where even on Instagram, I mean, I think you can at least get some of that engagement, definitely much more than Spotify, but still very surface. And you’re not really getting to the level of engagement that you would on Twitch unless you’re with something like that, or, you know, some of the other services that are really trying to focus on the more monetization and the creator economy focus that we’ve definitely seen, especially given the amount of funding that a lot of companies in the Creator Academy space have gotten in the past six months or so.

Tracy Chan 28:16
Yeah, it’s funny, like, the way that I think about it in my mind is is you know, a lot of social today is like, if you’re texting or dming, with your friends, and like, yep, you can definitely communicate what’s going on. But contrast that to like doing a zoom call or having a phone call with your friend. That’s what Twitch is. It’s like you’re having a conversation. And it’s not just like surface trying to get across in a few words. It’s like ongoing, and it’s regular, and it’s repeat. And it’s not, you know, one off. And I think kind of you know, that’s just why the community building and the monetization works so well. Again, you’re just as invested into your fans as they are into you.

Dan Runcie 28:52
Twitch, of course, is owned by Amazon and amazon music has been making a bunch of strides itself. Are there any partnership opportunities, there are any type of things that we’ll see the things that we’re doing right now?

Tracy Chan 29:03
So Amazon Music has like a killer twitch channel, and they’re partnering with artists all the time, just like across the board on just different activations around album releases of tour announces and things like that. And they’ve had everyone from Dolly Parton to Keith Urban to BTS. I mean, like they bring the heavy hitters and do kind of these live interactions. And I think what’s really awesome about it, is it’s like, they do twitch really well, because it’s not just like, here’s my flashy concert, it’s deep interaction, you know, with the chat and the fan so that, you know, it’s continuing to do really, really well.

You know, another partnership that we have with amazon music is Twitch streams are available within amazon music. So if you’re on an artist page, and that artist is live, you can actually see that and we think you know, both the interaction and the consumption together is just so magical. And on top of that, you know, you can imagine all the things that we can do. So if you are following in artists and they go live, you’ll get an notification from amazon music that they’re alive and you can watch it directly within, which is super, super cool. So you kind of get a lot of cross collaborations across the audiences and things like that.

So we’ll continue to like work with amazon music. Because we think that, again, the more touchpoints you have to your audience as an artist, the better off you will be. And it doesn’t have to just be in one place. And in fact, like any service that tells you, oh, just focus on here, like, Don’t listen to them. There’s lots of things and lots of ways to connect with different audiences. And you might find that your audience on Twitch is slightly different than on amazon music is slightly different than Spotify than Instagram. Again, it’s all a matter of, you know, what’s important to you? What are the services, delivering back to you, as an artist and carving out your time appropriately?

Dan Runcie 30:45
I think that for Twitch and Amazon, specifically, the flywheel has already started a term when I’m thinking about in my head, because you obviously have the whole commerce piece of this. And I think that’s in many ways, the other aspect of the Creator Academy that people have been trying to think to Okay, how best Can you help monetize merch? How can you monetize things like NF T’s and bring some of these things together to truly be a type of one stop shop for artists in that type of way. And I feel like there’s a world where between both what twitch offers and what amazon music offers, in what Amazon more broadly offers, there is an opportunity to really have that in type of hog or a type of one stop way.

Tracy Chan 31:24
You’re exactly right. Amazon offers a lot, and we’re going to continue to partner with, you know, across the Amazon family. But we’re open I mean, that’s why we’re you know, working with lots of partners, because again, the more touch points you have, the better and your idea like NF T’s are a prime example of like, you know, we don’t have an NFT product for artists, but what we see is artists, again, they’re minting NFTs on Twitch and live, so you can actually kind of see it. So it’s less of a vague concept.

And it’s like, No, you can kind of see it in real time. Or, you know, for those who are doing NFT auctions, we’ve had folks like disclosure and rack do live streams of like, okay, countdown, like watching the auction flows and things like that. So again, it’s all about just like, bring your audience to whatever you’re doing. That’s the magic of Twitch. And I think, you know, again, we’ll continue to just partner because the best thing about Twitch is, we have an open ecosystem, you control the creative, as a creator, I mean, we even have a bunch of creators who have smart lights in their room. And in chat, you can like literally change it. And maybe you can change it to certain things. If you’re a subscriber or you know, there’s just so many dynamics that you can kind of layer on top of it, which, again, you get out of the way of the creatives in between artists and fans, that’s when the magic happens.

Dan Runcie 32:36
That makes a lot of sense. It’s been great to just see how quickly things have grown to. I’m curious, I don’t know if you know these numbers, but I’d be interested to know what percentage of twitches business has been twitch music from before you joined, like right around that time, like a year plus, versus what percentage of the business is twitch music now, because it just seems like it’s grown so much in the time you’ve been there.

Tracy Chan 32:59
Yeah, so we don’t break out kind of like what the different verticals are. But what I can tell you is in the last year, music has grown hours watched by 550%, within music. And so that’s just been really, really, really great to see. And then obviously, on the monetization side, like I mentioned, do those making 25,000 or more annually is grown 16X, which is just mind blowing.

Dan Runcie 33:24
That’s awesome. So what do the next few years look like? I mean, obviously, I’m sure there’s some things under wraps. But from a high level, that five year roadmap, like where is twitch in a few years from now?

Tracy Chan 33:34
Really what it boils down to is just like those two core principles of artists want to get to know their fans. And so the easier we can make it for artists to come on to twitch and build their community and bring their community from, you know, other services over to twitch and have that interaction, we’re going to continue to invest in that will obviously kind of work with more partnerships with the likes of you know, a distro kid and united ambassadors to just make twitch more available and known to the music community. And then on the monetization side, you know, we’re going to continue to help artists make money.

And you know, I think that’s just such a big gap in the industry today. And what we’re seeing on just the low, a few 100 fans, being able to kind of make a real living, you know, we think that that just opens up possibilities for you to make those business and creative decisions for you. So we’ll continue to invest in making it easier for artists to achieve kind of those levels of success. Because at the end of the day, you know, the more the artists are successful, the more that they’ll invest into their communities, which will grow more music fans on Twitch, which will get more artists. And we see that just kind of beautiful flywheel. I mean, it’s working right now. And so we’re going to continue to invest to make sure that artists really get taken care of because at the end of the day, they’re the lifeblood of kind of the creative economy and we want to be

Dan Runcie 34:54
there to support them. It’s exciting. I think you alluded to this earlier, but right. There’s many places forums that are having their own way of offering opportunity in this space, you all clearly have a pretty defined way. But there’s plenty of areas to expand there. This isn’t a winner take all type thing. But I do think that we’re clearly getting better at solving this problem. How can you get people to be paid for all the things that they do? And I think you all are in a really interesting space. And I think that it probably surprised a lot of people to just because I think the thought was just so much Oh, gaming, right? But no, being able to like shift that narrative and really increase your own addressable market was, from my perspective, one of the biggest value ads and advantages that the company has done.

Tracy Chan 35:37
Well, yeah, and I think that that’s in some ways, part of the secret sauce is is gaming and music are just inextricably linked. We recently did some research with media on one of the music, think tanks in the UK, when they did their survey, they found that the audience on Twitch listens to two times the amount of streaming music than your average consumer. And so it’s like, the audience just actually loves music, they love to support creators, this makes a lot of sense. I think they’re just like a massive opportunity, because of our roots in gaming.

Again, a lot of the dynamics of why the monetization works is from gaming. And it’s not just like, I heard your song, and you get whatever pennies or whatever it is, that’s what people actually want. And in a lot of ways, it’s so a glitch going back to the roots of music, have people pay musicians historically for the talent that they have for the performance. That’s why live is such a big, you know, medium touring and things like that. And we think that, you know, twitch kind of taking it digital, again, building your community can be a real big opportunity. It’s not just kind of like the biggest artists who can succeed. It’s artists of all sizes.

Dan Runcie 36:50
Well said, Tracy this is exciting. Is there anything else that you want to plug or let the Trapital audience know about before we let you go?

Tracy Chan 36:58
First off, thanks for having me. Because, you know, this has been really, really great conversation. I think that if you are an artist, and you really want to get to know your fans, and you want to make some money on your creative process, whether it’s in the studio, whether it’s performing live, whether it’s kind of doing something on the fly, twitch could be a really, really great place for you because it doesn’t take that much. Again, just the medium viewership.

For those making $50,000 or more to the artists is 183 fans, it doesn’t take much. It does take some dedication, it does take you know, being able to interact with a community in a very authentic way, on a regular basis. But you know, this is a great option. And again, with having, you know, your community support you it’s financial freedom, it’s creative freedom, there isn’t one path in order to make artists successful. Do what’s authentic to you, which could be a big part of that. And if it’s interesting to you, please jump on to twitch and start broadcasting.

Dan Runcie 37:57
For the folks listening. I’m gonna link that Twitch Rockonomics report in the show notes as well, because I think this is a great visual companion to a lot of the stuff that Tracy has said here. Tracy, it’s been a pleasure. Thanks again.

Tracy Chan 38:08
Thanks, Dan. Appreciate it.

Dan Runcie 38:12
If you enjoyed this podcast, go ahead and share it with a friend. Copy the link text to a friend posted in your group chat posted in your slack groups. Wherever you and your people talk, spread the word. That’s how Trapital and continues to grow continues to reach the right people. And while you’re at it, if you’ve use Apple podcast, go ahead, rate the podcast give it a high rating and leave a review tell people why you like the podcast that helps more people discover the show. Thank you in advance. Talk to you next week.

 

Dan Runcie

Dan Runcie

Founder of Trapital

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