Happy Friday! I hope you had a wonderful week and I hope those of you in the Deep South are ok after a series of very bad storms moved through the last couple of days.
There’s been a developing trend in the social media and digital space that I wanted to bring you up to speed on today. For the last few months, there’s been a push by the major social media platforms to start compensating their users. This is a very interesting shift, as sites like Facebook and Twitter have been around for well over a decade, but suddenly they have decided it’s time to start paying users.
Why the sudden sea change? Back in October of 2010, I got a company that creates blog themes to sponsor one of my weekly #Blogchats on Twitter. I didn’t realize it at the time, but this was actually a pretty big deal. Popular blogger Mark Schaefer actually wrote about it on his site the next day: “Very quietly, a significant milestone occurred last Sunday night. Blogger and consultant Mack Collier monetized a Twitter conversation. That’s right. Mack made money from other people’s tweets on a free and public platform.” Apparently, this was the first time a Twitter chat had been sponsored or monetized. Five months later, I would have a live version of #Blogchat at South By Southwest that had multiple sponsors. I believe that was the first instance of a Twitter chat being monetized in a live setting as well, but I’m not sure.
Over the years, dozens of companies such as Adobe, Dell, Club Med, Pilot Pens and Paper.Li would sponsor #Blogchat. My point in mentioning this is that even though I was able to monetize #Blogchat through sponsorships for a decade, I never had Twitter’s help in doing so. And keep in mind, at the height of its popularity, #Blogchat would be the top trending topic on Twitter during the hour each Sunday night in which the chat occurred. It would bring thousands of people together every Sunday night. The impact of the chat could have been even bigger, if Twitter had been smart enough to help me promote the chat or help make it easier for Twitter chat moderators such as myself to make money from our chats.
So coming from that background of having successfully monetized content on Twitter without Twitter’s help, it’s interesting to see how Twitter and other social platforms have suddenly done a 180 and are working with content creators to monetize the content they create on their platforms.
So what changed, and more importantly, why the change? It all started with video games…
Justin.tv: The revolutionary social media site you’ve probably never heard of
You’ve heard of livestreaming, but have you heard of lifestreaming? Around 2007, a site called Justin.tv launched that was supposed to give users a ‘channel’ where they could essentially broadcast their lives, or lifestream. The first ‘lifestreamer’ to gain popularity was Justine Ezarik, better known by her online persona iJustine. iJustine was a power Justin.tv user, and brought a lot of exposure to the site.
As Justin.tv began to grow its user base, it eventually added the ability for users to put their channel into several different categories to help other people understand what type of content their channel would focus on. One of these category options was ‘Gaming’, and the majority of the users of this category broadcast themselves…playing video games. This category proved to be quite popular with Justin.tv users, so much so that in 2011, the company spun off the Gaming category into its own site, called Twitch.
Twitch launched on its own in 2011 as a site where people could broadcast themselves…playing video games. Now I’m betting your first thought it ‘why in the world would anyone waste their time watching people play video games???’ You would be surprised. Gamers of all ages devour content from top video game players as a way to learn how to play video games better themselves. But for the purposes of this newsletter, what’s interesting about Twitch is that the platform isn’t just based around streamers (or ‘content creators’ as they now preferred to be called) playing video games. The entire platform is designed so that people can PAY their favorite content creators for access to their streams, and to the content creators themselves.
So wait, how much money are we talking here? Millions and millions and millions…
“Twitch is down” “Doc is back”
Up until 2018, my knowledge of Twitch was pretty limited. I knew it was an offshoot of Justin.tv, I knew it was a site where you could watch other people play video games, and I had spent maybe 15 minutes of my life on the site.
One morning I was on Twitter, and I scanned the trending topics, as I always do. The top trending topic on Twitter that morning was ‘Twitch is down’. That got my attention so I decided to investigate. Popular social media sites go down all the time, and normally the reason why is due to some hardware or server error.
Twitch was down this particular morning because popular content creator DrDisRespect was returning to the site for his first broadcast in months. The excitement over Doc’s return resulted in a staggering 360k people viewing his stream at the same time. This volume of activity crashed Twitch’s servers and brought down the site.
That REALLY got my attention. I started paying attention to Doc’s stream on Twitch. I started learning more about the most popular streamers….er…content creators on Twitch. As I said, Twitch is built around helping content creators make money off the platform. This is a completely different approach than all the other top social media sites. You can subscribe to your favorite content creators on Twitch, and by doing so, you pay a monthly fee that can be as little as $5 a month, going as high as $25 a month. At each level you get additional features that allow you to have a certain level of access to your favorite Twitch content creator, such as the ability to post in their chat room. Individual content creators also focus on highlighting their subscribers, say by mentioning them during their stream, or perhaps even playing a video game with them.
Additionally, Twitch allows content creators to partner with brands for additional sources of income. And we are talking big brands, such as Wendy’s, Gillette, Mt Dew, the WWE, Cash App, and more.
So exactly how much money are we talking here???
I started doing some research into DrDisRespect and although it’s almost impossible to verify his actual income from streaming, in 2018 it was thought that he was making up to $6 million A MONTH from streaming on Twitch. You can do the math.
That’s not the amazing part. There are many other content creators who make as much or MORE than that! Popular content creators such as Ninja, NickMercs, TimTheTatMan and Shroud are thought to be worth tens if not hundreds of millions of dollars.
All from playing video games on the internet. Crazy world, right?
What’s interesting about Twitch’s model is they have created a rabid community of passionate gamers on their site. Companies such as Facebook, YouTube and Microsoft have launched competitors to Twitch, and none of them other than YouTube has had any noticeable success. YouTube has managed to secure a small number of popular content creators such as DrDisRespect and CourageJD, but Twitch is still the 800-pound gorilla in the streaming world. I think a great deal of the insanely high levels of loyalty that both content creators and viewers have toward Twitch is due to how Twitch has always worked with its content creators to pay them for their time spent on the platform.
As a result, the content creators and viewers both become more invested in Twitch and loyal to the site. For instance, in 2019, Mixer launched as a competitor to Twitch. In doing so, Mixer signed an exclusive deal with two of Twitch’s most popular content creators; Ninja and Shroud. Mixer was betting that the fanbases for both of these streamers would leave Twitch and follow them to Mixer.
It didn’t happen. A year later, Mixer folded and was acquired by Facebook. This alone is testament to the high level of loyalty that Twitch has developed with its content creators and viewers. And I think this is mostly due to Twitch being smart enough to learn early on that its content creators were making the site a LOT of money, and if they didn’t share that money with the creators, they would go with someone that would.
Now, how does this relate to social media sites like Facebook, Twitter and LinkedIn now wanting to pay its content creators?
First, let’s start with a quick overview of some of the efforts that social media sites are launching to compensate users/content creators:
— Brian Solis (@briansolis) February 25, 2021
Soon, LinkedIn could pay top influencers to create content on the platform https://t.co/buUfVyWObv
— Social Media Today (@socialmedia2day) March 9, 2021
NEW: @facebook expands fan payments, subscription options in appeal to creators
— Comes 2 weeks after @twitter announced “Super Follows”
— Facebook expanding “Stars” feature that’s akin to tipping
More on @axios: https://t.co/NGfKmkABQu
— Sara Fischer (@sarafischer) March 11, 2021
Twitter, Facebook and LinkedIn all pushing new initiatives to pay content creators. And you can be assured that other sites like Instagram and even Clubhouse will be soon rolling out more options to compensate content creators.
Why is this happening? More importantly, why is this happening now?
In short, these sites are trying lock content creators into using their sites. If a content creator is already posting content on both Facebook and Twitter, and Twitter starts offering him cash to create content on Twitter, what’s going to happen? He’s probably going to take his talents to Twitter, right? I think both Twitter and Facebook can see that a lot of their users are getting fed up with the sites, and are looking for other options. The environments on both sites have become increasingly toxic for years now. I have lost count on how many friends and colleagues I have heard say “I want to just delete my Facebook account, but I can’t bring myself to do it’. I think a LOT of people feel this way about both sites, and I think both sites are aware of this, at least to some degree.
So I think the main thrust behind these sudden monetization efforts are to keep users from leaving. And I don’t think it’s going to work. Twitter and Facebook in particular are now offering monetization options to users because they are afraid of losing them. The time to offer these users monetization options was 10 years ago. Go back to my earlier example of how I had to work to secure sponsorships for my #Blogchat on Twitter, and how Twitter offered me no help. It was the same for all Twitter chat creators. For instance, my friend Jessica Northey created a very popular #CMChat on Twitter for country music fans, and she had to create a separate website for her chat to help publicize and promote sponsorship opportunities.
Twitter could have helped both of us with these things, but they didn’t care. Because 5 or so years ago, there were fewer social media options and Twitter’s userbase was growing, not shrinking.
There’s a very important lesson in this for your business: Always communicate to your customers that you appreciate them, or you will eventually lose them. By not helping our montization efforts, Twitter communicated to us that they really didn’t care about our success. So Twitter chat moderators adapted, and started seeking out monetization options outside of Twitter. I remember specifically having conversations with fellow Twitter chat moderators about monetization options and we all agreed that as much as possible, we had to offer sponsors access or content or whatever that was OUTSIDE of Twitter. If Twitter had embraced us then, it would have given us every incentive to spend more time with the platform, to grow out chats ON that platform, and to not be as focused on moving the community OFF Twitter.
Recently on my blog I talked about the idea of rewarding the behavior you want to encourage. For instance, when your customers are promoting your business online, you want to ‘reward’ that behavior, so those customers will feel appreciated and continue to promote your business. The reward can usually be something as simple as saying ‘Thank you!’, which remain the two most powerful words in social media.
Communicate to your customers or users or donors or partners that you appreciate and love them. That’s how you convert customers into passionate fans that love your brand.
Final note: Of all the social media platforms that are currently pushing monetization options for their users, Clubhouse is the one that will likely see the most success. Here’s why: Clubhouse is still very new (It’s still only available to iOS users at this point), and it has a very loyal userbase. The founders of Clubhouse routinely hold rooms where they discuss the app and what’s happening. So they are proactively listening to their users and making them feel heard. Offering those same users monetization options now comes across as a move of appreciation. Like Clubhouse is saying ‘Hey we are growing fast, and we want to share some of our success with you, here’s how!’ Whereas when Twitter and Facebook do the same thing, it comes across as if they are doing it cause everyone else is. The move by Clubhouse seems more motivated by appreciation of its users, even though that may not be the case. Just keep an eye on Clubhouse, and I’ll no doubt be covering their moves more in future issues of Backstage Pass.
Are we connected on LinkedIn? I am going to be spending a lot more time on LinkedIn in 2021, and sharing my best content there. Please request a connection with me if we aren’t already connected as I’d love to do so! Here’s my profile on LinkedIn.
Thanks so much for reading! As always, if you know just one person who could benefit from the Backstage Pass newsletter, please forward this email to them. They can subscribe to the Backstage Pass at this link.
See you next Friday, stay safe!