Is Twitch’s DJ program too little, too late?

By:Cherie Hu

Published:2024-06-13

Earlier this month, Amazon-owned livestreaming giant Twitch unveiled its long-awaited DJ Program, set to launch in summer 2024. The initiative aims to provide a “safe, long-term home” for DJs — offering access to millions of songs from all three major labels and Merlin, as well as discoverability upgrades for DJ creators such as front-page recommendations and a new official DJ category.

With industry interest in superfans and criticism of dominant music streaming platforms at an all-time high, it's natural to root for a platform like Twitch that promises to empower artists and DJs to build more sustainable communities and careers outside of the status quo.

However, a closer examination reveals that Twitch's DJ Program might be a classic case of "too little, too late."

The decline in music livestreaming demand

In a blog post, Twitch CEO Dan Clancy shared that the number of DJs streaming on the platform has “more than quadrupled” since early 2020. While this growth is impressive, it doesn't tell the whole story.

According to TwitchTracker, monthly concurrent viewership for Twitch’s Music channel has declined by over 50% from its peak four years ago — dropping from 35.7K average concurrent viewers in May 2020, to 17.1K so far in June 2024. This decline is much steeper than for the Twitch platform as a whole, which saw concurrent viewers drop by only 8% over the same period. As of June 13, 2024, the Music channel accounts for a mere 0.7% share of Twitch’s overall weekly concurrent viewership.

Demand for music livestreaming experiences began to dwindle in the middle of the COVID-19 pandemic, as the novelty of the format wore off and live shows slowly returned. In 2021, MRC Data reported that only 5% of the U.S. population had attended a virtual concert or livestreamed music event that year. Many music livestreaming startups either shut down (e.g. Sessions) or got acquired (e.g. Patreon x Moment, Live Nation x Veeps) — framing livestreams as just one feature within a wider artist/fan engagement tool suite, rather than as a standalone product.

The decline in overall demand and viewership metrics for music livestreams indicates a general return to in-person concerts, and a shift towards a hybrid approach — investing in digital experiences as a complement to the irreplaceable energy of in-person events. While livestreaming can still play a critical role in the strategy for a given show or tour, the business model behind the long tail of livestreaming as a standalone experience remains uncertain. Assuming consumer demand is a significant factor in making Twitch's DJ program successful, the timing of the program launch appears questionable.

The complexity (and cost) of music licensing for livestreams

Twitch has had a rocky history with music licensing dating back to May 2020, when the platform began receiving thousands of DMCA notices each week from major labels, targeting creators’ on-demand archives. The influx caught streamers off-guard, and compelled many to delete clips and on-demand videos from their archive to avoid bans.

In September 2020, Twitch tried to mitigate the issue with the launch of a creator tool called Soundtrack by Twitch, which offered rights-cleared music for livestreams via partnerships with a number of independent labels and distributors. However, the tool immediately drew industry critique for its lack of appropriate rights coverage (e.g. no sync rights, which are necessary for on-demand clips and highlights), and was ultimately shut down in July 2023 due to low engagement not justifying the cost of maintaining the program.

The glacial pace at which Twitch’s DJ Program came to market highlights the longstanding issue of licensing challenges in music and tech, especially for livestreams. Because they sit at the intersection of recording and live performance, music livestreams involve practically every type of license in the music industry — including masters, mechanical, sync, performance, and even trademark and name/likeness rights. This licensing labyrinth is a direct contributing factor to the lack of on-demand concert video platforms, especially as dwindling consumer demand has obfuscated any clear path to recoup the costs associated with clearing these rights.

The steep costs associated with licensing music content from major rights holders only exacerbate the problem. While big-tech companies like Facebook and TikTok can afford to pay hundreds of millions of dollars for licensing deals, the precedent that sets in terms of the financial burden of securing the necessary rights can be a significant deterrent for smaller music-tech players.

At large, many music-tech content platforms have to make compromises on their user experience in order to keep their licensing agreements financially sustainable. The unique limitations of Twitch’s DJ program — such as restricting the program to livestreams without coverage for clips or VODs, and prohibiting streaming of pre-release tracks — are a microcosm of this challenge. Elsewhere, Mixcloud, a streaming platform for DJ mixes that has already had licensing deals with the majors and Merlin for over five years, has had to introduce DJ mix limits and the need for users to upgrade to continue uploading.

Twitch has committed to splitting the costs associated with music licensing 50/50 with participating DJs, but the lack of transparency around the exact rates involved could lead to unpleasant surprises for participants, particularly smaller or up-and-coming artists who may not have the financial resources to absorb unexpected costs.

Until the music industry's core engine of rights undergoes a fundamental transformation, licensing systems will continue to lag years behind culture and technology. All in all, it took Twitch four years (2020–2024) to get the licensing agreements they needed to support and monetize DJ activity effectively on the platform. While it’s important to acknowledge the value of music IP, the timeline of this program represents a dinosaur pace of progress, and the user engagement that these licensing deals were hoping to capitalize on is no longer there.

Revisit Water & Music’s analysis on livestreaming and online music experiences: