Legal, Business Tips For Artists On Twitch

Many artists are turning to livestreaming in lieu of actual live shows, with Twitch among the popular platforms for doing so. While setting up livestreams is easy enough, there are still a number of legal and business considerations to take into account before moving forward.

Guest post by Justin M. Jacobson, Esq. of TuneCore

[Editor’s Note: This article was written by Justin Jacobson, Esq. While COVID-19 has us all indoors, many artists are turning to Twitch to live stream for fans! Check out our recent Twitch case study featuring HANA, and be sure to brush up on live streaming here.]

With current events, there has been a substantial shift of musicians and other celebrity influencers engaging with their fans by creating and distributing original content through live streaming platforms, such as Amazon’s Twitch. A livestreaming website, such as Twitch or Facebook, enables a user to create a live broadcast or “stream” that is accessible to a viewer. This stream may emanate from a creator’s smart phone or device, their computer or PC, or even from their gaming console, such as a Playstation or an Xbox.

As a result of the entertainment industry’s uncertainty, including the wide- spread wave of music festivals and live performances cancellations, many artists are taking to the digital world to interact and engage with their fans.

While it may seem as easy as clicking a button to go “live” to the world, there are a myriad of business and legal considerations that a musician or other entertainer must consider in order to take full advantage of their digital streaming outlet as well as to best maximize the potential revenue that they could earn through this income stream.

How To Do Streaming “Right”

Without delving deeply into the legalities of music licensing, any music played live during a stream or that is included in a created video is subject to proper authorization. This means that if the musician is not performing new original works that they own the full rights to; they must actually have written permission from the rights owner to perform the works, including a license to use their own previously licensed works. This authorization may be provided from the recording owner, such a record label. A streamer’s failure to obtain the appropriate permission to a musical recording can lead to the created content being removed for copyright infringement.

In addition, a stream may be “muted” or otherwise “blacked out” due to the unauthorized use of a protected work. Furthermore, popular streaming services such as Twitch and YouTube have policies related to “repeat” copyright infringers that may subject the account to suspension or potential termination. If a user cannot obtain the rights to music, they may instead work with music licensing companies who provide a “blanket” license that permits the usage of any media contained in their applicable catalogue.

In addition to proper rights to any music included in a stream, it is generally preferred that the entertainer structure their social media and their actual stream in the most professional light that they can. This is particularly important when positioning oneself as a marketable “brand,” especially in cases where the individual desires to incorporate sponsors and other brand partners into their streams. In order to establish the level of professionalism that most major brands prefer, a user should attempt to utilize properly sized, hi-resolution imagery and graphic “overlays” as well as “emotes” to provide the most visually attractive and user-friendly fan experience. Proper usage of streaming software, such as O.B.S., is also beneficial and may help further professionalize a musician’s stream. Additionally, a user wishing to provide a professional and visually appealing presentation should obtain the required streaming equipment, including a webcam and a microphone.

In an effort to obtain a large social following on a streaming platform, a musician must be ready to consistently stream to gain an active viewership. This includes establishing a consistent stream

schedule so that their audience will plan their day around watching the artist’s content or live stream. A substantial live concurrent viewership is especially important for potential sponsorship opportunities, product placement and other “branded” or sponsored segments.

Some Ways To Earn Revenue

This new social platform may provide chances for an artist to earn additional income. For example, a live stream might offer an innovative opportunity for the talent’s existing brands to engage with their fan base. This means that an artist can now present a new sponsorship offering to their existing sponsors in the form of the musician’s live stream. In this light, a musician may offer to provide placement of a sponsoring brand’s logo on their stream’s “overlay” or the individual may demonstrate or otherwise utilize the sponsoring product while livestreaming. A musician may even just provide the sponsoring company with added exposure through this new social media channel as a form of “added value” for their current partners.

Furthermore, the use of Twitch, Mixer, Caffeine, or any other live streaming service may also create avenues for new potential brand partnerships. In particular, a musician may now be able to “pitch” traditional, endemic gaming brands for sponsorships that would not have been authentic prior to the usage of this new outlet. This includes the discussion of potential deals with a variety of gaming products such as gaming headsets, chairs, controllers, monitors, graphics cards, and streaming equipment. However, it is important to note that endemic gaming brands generally value authenticity and high levels of engagement, so an artist wishing to cross-over into the “gaming” sphere must proceed forward cautiously, professionally and properly.

In addition to new potential sponsorship leads, an artist may also create new avenues for non- endemic companies that may benefit from the use of immediate, world-wide fan engagement. For instance, in addition to the commonly used digital marketing techniques such as posting on Instagram or Twitter, this new streaming outlet may provide the artist with new opportunities to effortlessly and cost efficiently incorporate a sponsoring brand’s products into their stream. This could apply to products such as soft drinks, energy and alcoholic beverages, clothing and apparel, motor vehicle brands, food and snacks sponsors as well as any beauty care and hygiene products.

Along with an influencer’s brand partnerships and endorsements, an individual utilizing a streaming platform can generate income from several other avenues. A user may earn revenue directly from a streaming platform for any advertisements displayed before and during their streams when they reach a certain established viewership threshold. Furthermore, some platforms, such as Twitch, provide additional income producing opportunities for its users.

For instance, Twitch provides the option for “subscriptions” (known as “subs”) available for purchase by a Twitch user. These “subscriptions” are monthly payments from a user to the streamer in order to access “exclusive,” private or other unreleased content as well as to permit the usage of subscriber-only “emotes.” “Emotes” are images that a viewer can input into a stream’s chat and which are specific to a particular streamer. The existence of subscribers may enable an individual to produce unique content that is pay wall protected and requires a paid subscription in order to view.

One of the largest streaming platforms, Twitch provides a multi-tiered subscription service that permits a viewer to subscribe to a particularbroadcaster’s channel by paying a recurring monthly charge of $4.99, $9.99, or $24.99, depending on which “tier” they subscribe to. Each subscription tier usually corresponds to a different level of access and content available to the purchaser 

Together with subscription fees, Twitch provides its streamers with the additional income stream in the form of “bits.” “Bits” are animated cheering “emotes” that a viewer can use in the streamer’s chat to support them. “Bits” are a virtual good and a form of in-stream currency that can be purchased online through Twitch via Amazon Payment or PayPal. “Bits” can also be earned over time by a viewer by watching the online advertisements displayed by Twitch.

Twitch currently pays their “Affiliates” and “Partners” level members’ one ($0.01) cent for every “bit” that a fan uses on their channel. Furthermore, since Twitch is owned by Amazon, Amazon Prime members can use the “tokens” that are earned from their Prime membership in order to subscribe to a specific Twitch channel. In these situations, since the “tokens” renew every month, a Prime member can re-subscribe to a broadcaster’s channel solely using their Prime “tokens.” Generally, Twitch and the streamer equally split all of the income from subscriptions, “bits,” and Prime “tokens”.

In addition to “subscriptions” and “bits,” third-party services provide platforms that permit a viewer to make “donations” and “tips” to the streamer. One such commonly used platform is Streamlabs. This means that a viewer can actually contribute money directly to a musician through the use of one of these third-party services without buying “bits” or purchasing a monthly Twitch subscription.

Some Examples of Streaming Content

While the content of a musician’s stream has little bounds, only subject to a website’s “Terms of Service,” there are many unique ways that an individual can utilize their livestream. The artist could provide a viewer with access to live rehearsals and practice sessions as well as provide an “inside the studio” or other “behind the scenes” viewing experience. The musician might provide content of them working in the studio, including writing a song or melody, playing an instrument, or really anything else that highlights a unique part of the artist’s creative process. Additionally, a DJ or producer might mix and scratch live or a group of artists may come together for a “jam” or “improve” session live on stream.

In addition to music content, an artist may engage in a live “question and answer” session whereby viewers are encouraged to submit questions in the chat’s stream and the musician is able to review and provide on-demand replies to the submitted inquiries. There is also a widely established “just chatting” and “ask me anything (AMA)” scene that can be utilized by an artist. In this regard, an artist can further interact with their viewers by hosting “watch” and “viewing” parties where the musician livestreams in conjunction with a large pop culture or other widely viewed event such as the season finale of a popular television show, the Super Bowl or the Grammys.

During these stream sessions, the host and the viewers can provide their instant reactions and discuss the “winners” and the “losers” or anything else related to the content that they are collectively watching. Ultimately, there are so many different unique angles that an artist can take when utilizing such platforms. For instance, live streaming also provides the perfect medium to highlight the artist’s specific interests or hobbies outside of music, such as cooking healthy or exotic meals or trying and rating different craft beers.

Overall, live streaming will continue to grow as more musicians and other entertainers look for new ways to supplement any lost income as well as for ways to further immerse themselves with their fans. Ultimately, the goal of any artist utilizing live streaming is to find ways to create instant, meaningful engagement with their fans; and in this respect, Twitch and other streaming platforms are just another means to achieve this.

This article is not intended as legal advice, as an attorney specializing in the field should be consulted.

Justin M. Jacobson, Esq. is an Entertainment and Music attorney at The Jacobson Firm, P.C. in New York City. In this capacity, he assists musicians, entertainers, athletes and professional gamers with a variety of legal, business and marketing issues, including trademarks, copyrights, contracts and licensing matters.