Twitch is “pretty close” to securing licensing deals with the major record labels, according to CEO Dan Clancy. Although he added that DJs using the platform to stream their sets will have to cover some of the costs incurred by paying royalties to the music industry.
Appearing on the latest edition of Twitch-based podcast TweakMusicTips, Clancy said that the company has been working on a “stable solution” so that DJs using the platform can avoid being hit with takedown notices from the music industry. Twitch is obliged to remove any content containing unlicensed music when made aware of it by a copyright owner to avoid being liable for copyright infringement.
The labels, he said, have stopped issuing takedown notices while negotiations with the music industry are ongoing. This means that - while there are still some issues around unlicensed music in on-demand videos - Twitch gamers are no longer on the receiving end of a flood of takedowns. Instead, where labels “feel someone is abusing things they come and tell us and then we tell the streamer to stop playing music”.
However, the current situation is “not a long-term sustainable thing” and will stop if licensing agreements cannot be reached. Luckily, he added, “we’re pretty close to finalising [deals] with the labels”.
Get access to our four-part CMU Masterclass series on the Economics Of Streaming that gives you the knowledge you need to be able to understand this complex topic.
Get instant on-demand access to all four Economics Of Streaming masterclasses for just £129 - a saving of £70.
“In the end, we are going to have to share money with the labels; it doesn’t come for free”, he said of those deals, and by “we”, he means Twitch and the DJs using the platform.
Revealing that he has “already told a number of DJs this”, and noting that “they would rather not have to share some money”, it seems that they won’t have a choice. The plan is that, while Twitch will “pay a portion” of any royalties due, the DJs will have to give up some of the revenue they earn from their videos in order to cover the rest.
The Amazon-owned livestreaming platform has had a number of run-ins with the music industry in recent years, which in 2020 led to Twitch banning users from including recorded music in their videos at all.
A number of licensing deals followed, with organisations including Merlin and the US National Music Publishers Association. It also reached limited agreements with Universal Music and Warner Music, covering a handful of artist-specific channels managed by the labels rather than the platform as a whole.
In a 2021 blog post, Twitch warned users that full licensing deals with the major labels could be a long time coming, and may not come at all. Part of the problem, it said, was that the standard revenue share licensing deals offered to digital platforms “make less sense for Twitch”.
“The vast majority of our creators don’t have recorded music as a part of their streams, and the revenue implications to creators of such a deal are substantial”, the company wrote. “We’re open-minded to new structures that could work for Twitch’s unique service, but we must be clear that they may take some time to materialise or may never happen at all”.
In the new interview, Clancy - who became CEO last year, but has been at Twitch since 2019 - said that music-specific streams on Twitch currently account for a very small percentage of overall views. That may change if and when it is fully licensed, with Clancy noting that Twitch currently doesn’t generally promote DJs on its homepage because of potential issues surrounding the music within their sets.
