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How To Make Money On Twitch

Everything You Need To Know To Earn Money Streaming On Twitch

If you want to learn how to make money on Twitch, you'll love this guide.

Unlike some business models, streaming is relatively simple.

Not quick.

Not easy.

But it is simple.

If you do everything outlined in this guide, you could make enough money streaming games on Twitch to quit your day job — and, if you're really committed, maybe even make multiple six figures per year like some popular streamers.

Let's get started.

Note: "Streamer" and "broadcaster" are used synonymously throughout this article. They are both referring to the same thing — someone who streams games on Twitch.

What Is Twitch?

Twitch is the world's leading live streaming platform for gamers.

You don't need to login to watch people all around the world play your favorite games, but creating a free account allows you to engage directly with your favorite streamer or stream your own content.

Twitch also has premium subscription options that unlock bonuses and freebies in certain games and allow users to support their favorite streamers.

Twitch averages in incredible 1.1 million viewers per day and over 4.5 million broadcasters per month. The platform has grown over 60% year-over-year for two years in a row, and it's not stopping.

Twitch's growth is just kicking into high gear, and that growth means more opportunity for new gamers like you to start earning a real income from your favorite pastime.

Part 1: How Do People Make Money On Twitch?

There are quite a few different ways to earn money through Twitch.

To start, we'll break down the income of Twitch's two most popular streamers: Ninja and Shroud.

The #1 Twitch streamer in the world right now is Ninja (aka Richard "Tyler" Blevins), who earns over $5.5 million per year streaming Fortnite and other massively popular games. To get to that level, however, you would need about 12 million subscribers (the number Ninja currently has).

Here's an estimated breakdown of how much Ninja makes based on income stream. (Don't worry—we'll explore what each of these streams means in detail later in this article)

  • Subscriptions - $3,955,571
  • Ad Revenue - $509,521
  • Bit Donations - $316,354.92
  • Average Sponsorship - $600,000
  • Average Estimated YouTube Compensation - $36,000

The second-most-paid Twitch streamer is Shroud, who makes about $3.3 million per year. Here's the estimated breakdown of his revenue:

  • Subscription - $2,316,404
  • Ad - $182,751
  • Bit Donations - $57,942
  • Average Sponsorship - $600,000
  • Average Estimated YouTube Compensation - $36,000

As you can see, the majority of their income comes from subscriptions and sponsorships, as is common among most of the high earners on Twitch.

Now, let's take a closer look at each of the pieces that contribute to Twitch income.

A. Subscribers (Twitch Partner Program)

The #1 revenue source for Twitch streamers is their subscriber base.

On Twitch, viewers can opt for one of three subscription levels — $4.99, $9.99, or $24.99. Initially, as a streamer you split the income from a subscriber 50/50 with Twitch. As you become a larger broadcaster, however, you can earn a bigger percentage; up to 100% in some cases.

The best part about subscriptions is that it's a recurring income. You'll earn this revenue every month, which is great for stability and knowing you (probably) won't go broke in any given month.

However, you have to be invited to Twitch's Partner Program to be able to earn subscribers. And given there are only ~12,000 Twitch partners out of over 1.7 million active broadcasters, it's not the easiest thing to do. More on this in the "How to Build a Profitable Twitch Audience" section.

B. Collecting Bit Donations

When you're first starting out, the most common revenue source from Twitch is through bit donations from your audience. "Bits" are Twitch's virtual currency viewers can buy and redeem to use "Cheer" emotes in their favorite streamer's chatroom.

These animated emoji (pictured above) are called "Bit gems," and when your subscribers use them in your chat room, Twitch pays you $0.01 per bit.

Broadcasters can also create their own custom emojis called "Cheernotes" which work in the same way, but look different. (This feature is reserved for Twitch Partners.)

C. Advertising Revenue

According to CNBC, the average Twitch streamer makes $250 per 100 subscribers from ad revenue. Again, ads are reserved for Twitch Partners.

Twitch offers standard IAB (Interactive Advertising Bureau) pre-roll and display ads. They pay streamers using the CPM (Cost Per Impression) model—you get paid for every 1,000 views of your ads.

Note that ad revenue has been dropping lately due to the rise in ad blockers, but you can combat this by directly asking your viewers to turn off their ad blockers while streaming your content.

D. Paid Livestreams & Sponsorships

Once you gain a following and/or develop a relationship with companies looking to market their products, you can get sponsored by a company to promote them during your live streams, wear their merch, and use their products on camera.

For example, if we look at Ninja's room, we can see him promoting Bud Light and DXRacer chairs, both of which probably pay him to display them.

Another form of sponsorship is a paid live stream, where game developers will pay broadcasters to live stream their game and get it in front of a new audience in the hopes some of them will start playing the game as well.

E. Affiliate Marketing

Affiliate marketing simply means promoting a product or service and giving your audience a coupon code. Any time someone purchases the product using your coupon code, you get a cut of the sale (or a flat fee).

For example, let's say you love the gaming chair you use. So you work out a deal with the company that manufactures it, and they give you a coupon code which you then share with your followers. Any time someone uses your coupon code and buys that gaming chair, the gaming chair company cuts you some of the profit.

Here's an explanation chart of how this works from BigCommerce:

Note: You can use coupon codes, tracking links, or cookies to verify that the sale came from your audience.

It's like a sponsorship, but rather than being paid just to show the product, you have to actually get people to purchase one. If you have a large following, affiliate relationships can often be more profitable, because you can make more in commissions than you would from the sponsorship.

Of course, this depends on the commission you're making and how much your audience actually buys, so you'll have to run the numbers to figure this out. Affiliates are one of the first ways you can make money on Twitch without becoming a Twitch Partner, though!

F. Getting Signed To An Esports Org

Did you know the average esports salary is about $60,000 per year? The top esports players even make $1-$3 million per year.

While this income won't come directly from Twitch, showing off your skills on stream can get you seen by and signed to an eSports team.

It's a long shot admittedly, but then again, making a full time income via any method on Twitch is a long shot for most streamers as well.

Part 2: How To Build A Profitable Twitch Audience

Now that you understand the different methods to monetize a Twitch channel, it's time to actually do it.

Just like blogging or social media marketing, making twitch is all about building an active, engaged audience.

In order to start making consistent income on the Twitch, you need to hit around 500 concurrent viewers.

That means you need around 500 people actively watching your channel for the majority of your stream.

Here's a step-by-step guide to building your own profitable audience on Twitch.

1. Identify How You Plan To Stand Out

Before you even make a Twitch account, you first need a plan of action. In order to stand out from the millions of other streamers, you have to decide what your angle is.

For example, you could...

  • Be an exceptionally good player at a game
  • Be a notably entertaining personality
  • Leverage a gimmick designed to create buzz (like talking about politics while playing a game or something else unique)
  • Forge unusually strong relationships with your viewers (knowing them by name, asking about their family, that kind of thing)
  • Teach your viewers how to play better and explain your decision-making process
  • Etc.

Really, the limit on your approach is your own creativity. Ideally, you'll want a combination of the above strategies (i.e. entertaining while also teaching players how to play better).

Now — before you start promoting your channel, figure out what you want to do.

Do you want Twitch to be a full-time job or just a hobby? Will you be able to stream 8+ hours per day, 5 days a week or more? How long will you commit to it before giving up or deciding if it's for you?

Sit down and really think about this. Because your answers will determine how hard you'll try, whether you'll be successful, and your approach to gaining an audience.

2. Promote Your Content Across Multiple Platforms

Once you've committed to being a streamer, it's time to grind. Again, you have to stand out from millions of other streamers — and to do that, you need to learn marketing and have a unique angle.

There are a LOT of eyeballs on the internet. Google, YouTube, and Facebook are the top three most-visited sites on the web. Reddit, Twitch, Instagram and the other social media channels are also up there.

Your challenge? To get people to watch YOU over the tons of other stuff on the internet.

Not exactly easy, but something you need to master to become a highly paid Twitch streamer. (Don't let that scare you—the fact that you're even reading about marketing puts you ahead of 80% of Twitch streamers already.)

Develop a strategy where you promote your channel across multiple sites, such as:

  • Live stream a coaching session on a multiplayer game (such as League of Legends).
  • Record the session and upload it to YouTube, being sure to optimize for YouTube search and related videos. And don't forget to mention in the YouTube video that you stream on Twitch, with a link to your Twitch channel!
  • Go on forums (Reddit, Quora, etc.) and look for people asking questions about the game you just did a coaching session on. Answer their question, then link back to your YouTube video you just uploaded. Do this on multiple threads across multiple forums.
  • Share the YouTube video on social media (Facebook, IG, Twitter, etc.) and tag your viewers who watched the live stream. Ask them to share the link.

You get the idea — there are a lot of ways to promote your content. The key is to go out there and learn by doing. You can read all you want, but experience is the best teacher.

(Want a real-life example of this? Check out NightBlue's channel.)

3. Network With Streamers & Organizations

Have you ever heard the saying "your network is your net worth"?

Basically, one key to creating wealth is building strong relationships with other people who are already successful or on their way to success.

This applies to Twitch as well. The more partnerships you can make with successful and rising streamers, the more your own stream will benefit.

Such strategies include:

  • Partnering with other streamers to promote each other.
  • Play games with other streamers on stream at the same time.
  • Partnering with organizations to promote them for free in exchange for them promoting you in return.
  • Etc.

If you choose to master just one piece of the streaming puzzle, let relationships be it. If you become friends with someone like Ninja, it can skyrocket you to success—even if you're not the best at the game or the funniest person.

Again, do it ethically and be genuine. But get hustlin'!

4. Stay Consistent Over Time

Set up a streaming schedule every week and stick to that schedule. People will come to expect you to be there at those days and times, and if you lose that consistency, you'll lose your audience's trust. This is extremely important if you want to make this your full-time job.

One last thing...

You will most likely hit a point where you feel like it's not working. This is normal! You're basically an entrepreneur now, and entrepreneur's journeys look a lot like this:

You'll work hard and you won't see anything for it. You'll probably question your choice to do this and think things like "Who am I kidding? What makes me think I can do this?"

Don't listen to these self-defeating thoughts!

You CAN do this, you DO deserve it, and your brain is just trying to rationalize so you don't get hurt. But when you hear these thoughts in your head, it's time to stay consistent and double-down your efforts.

It might take you six months, it might take you two years, but you can and will make it work if you just keep trying. You got this!

Alternative Business Options

If your #1 goal is to be able to make some extra income while playing video games, Twitch is the likely the right path for you.

If you are really just looking for a good way to earn money or build a business, however, Twitch probably isn't your best bet.

Just like an MLM, only a small percentage of streamers make six figure plus incomes. The vast majority of even profitable streamers aren't clearing anywhere close to that, and they have to essentially treat streaming like a full time job without making a reasonable full time income.

There are many better options out there for building a successful, lucrative business of your own, and here at Consulting.com, we've helped over 3,000 of our students build successful businesses that allowed them to quit their jobs and work for themselves.

If that sounds interesting to you, click below to try our premium training, completely free.