Creators accuse Twitch of “double-taxing” their income with supposed community-centered feature

We know, we know: Twitch makes an announcement and streamers hate it. What else is new?

But hang with us here. This one’s a doozy.

As you may know, Twitch has historically been pretty abysmal at discoverability. Up-and-coming streamers have to advertise their channels on other sites like YouTube and TikTok, because–despite some recent introductions like a short-form video feed and homepage tweaks–they are simply not going to be organically discovered on their home platform.

This situation has fostered a unique reach-down-the-ladder attitude on Twitch, where streamers who’ve managed to ‘make it’ frequently turn back and help newbies, often by promoting their channels and giving donations/subs/Bits, and sometimes by offering direct mentorship, management/brand intros, or collaborations.

Twitch seems to know this, because its latest feature is one that allows successful streamers to support others with gift subs and Bits.

Except…it does that by effectively “double-taxing” their income, and giving itself more money.

We’ll explain.

The feature’s whole deal is that it allows streamers to buy those gift subs and Bits with their banked income–meaning they don’t have to pay with a credit card etc, they can just tap their current earnings before they cash out at the end of the month.

But streamers are still buying the subs/Bits at full price, directly from Twitch. There’s no real advantage here except that it removes a little bit of payment friction, and some streamers may be willing to spend more since the cash is coming out of future earnings instead of their bank account.

There is, however, a potential disadvantage. As streamer Sir Hans Vader laid out, if a streamer’s chat donates 100 subs, a streamer would (typically) get 50% of the revenue from that transaction, with Twitch keeping the other 50% for itself. If the streamer then turns around and gifts 50 subs using that money, Twitch would take another 50% from the receiving creator.

As Vader put it, “So 75 to Twitch, 25 to creators & community? Are you high?”

“So people gift subs to support creators and you take 50%, then creators use their cut to buy bits or gift subs to support others and then Twitch takes ANOTHER 50%? That’s basically double taxing lmao,” fellow streamer ABYSS chimed in.

Now, to be clear, streamers don’t have to use this feature. And a streamer who chooses to buy gift subs with the feature vs with a credit card won’t face any additional charges; it’ll be the same price, and they won’t lose any money.

Streamers’ complaints here aren’t about their own money. They’re criticizing Twitch for introducing a supposedly charitable, community-minded feature that ends up acting as a funnel to give itself more money. Twitch could have chosen not to take a 50% cut of gift subs and Bits bought through this feature. It could’ve chosen to take a smaller cut.

But it didn’t.

As usual, Kick was waiting in the wings to pounce on Twitch’s every last moment of weakness. After Twitch announced the feature on X, Kick co-founder/owner Trainwreck was quick to respond, tweeting, “twitch has its streamers in a perpetual stockholm syndrome, they won’t even realize [they’re being double-taxed]. Instead they’ll cheer on thinking it’s a QOL update.”

We don’t think he’s correct. The Twitch creator community as a whole is neither complacent nor ignorant, and while there are some streamers arguing that this isn’t a big deal, the vast majority of responses to Twitch’s announcement are smart dissections of what’s actually happening with this feature.

Whether those dissections will lead anywhere remains to be seen. Twitch is usually quick to bow to backlash, but in this case it’s been quiet, with the feature rolling out to U.S. streamers as planned.