Twitch CEO ties up with Uber in search of a ‘third way’ to categorize creators

“It’s not quite a W-2 job and it’s not quite a contract job,” Shearer said in a recent interview. “I think we could actually use the law that created a third option that was suitable for the gig economy and the producer economy.”

The debate about classifying people who make a living through an app or digital service, such as Uber Technologies Inc. or DoorDash Inc. the driver, or ikea furniture TaskRabbit’s assembler, over the years, has shrunk. According to a report by Pew Research last year, about 16 percent of US adults made money through such apps.

gig economy giants like Uber Technologies Inc., and Lyft Inc. has spent years and millions of dollars to keep drivers classified as contractors rather than employees, with mixed success. Shear’s comments are similar to those of Uber CEO Dara Khosrowshahi, who lobbied for a “third way,” proposing guidelines for laws that would provide both flexibility and benefits to gig workers. The Biden administration recently issued a proposal that could make it harder for gig companies to classify workers as contractors, and it could force them to classify people as employees entitled to certain protections and benefits. could.

Twitch, which is Amazon.com Inc. Owned by the U.S., the maker was a pioneer of the economy when it launched in 2011 as a way for gamers to broadcast their games and interact with fans. Its success over the years has made the site the primary source of income for thousands of people who have been able to monetize their fan base with monthly subscriptions, advertising revenue, and donations. The top streamers on the site alone can generate over a million dollars in subscription revenue, of which Twitch gets a 30% to 50% cut.

But to be successful in the increasingly competitive $104 billion creator economy, top streamers must put their full attention to it. Some people have been known to livestream themselves for up to twelve hours a day or take a break lest they lose followers or relevance. Twitch recently outlined upcoming changes to how creators will be able to make money on the platform, reducing the percentage of revenue top streamers once they reach $100,000 and the emphasis on advertising. The change was controversial among the creators and led many to question its economic stability and potential development on the site.

“One of the fundamental dynamics of the maker economy is that tech companies are not used to the level at which manufacturers rely on them for their business,” Shearer said. “The rapid change in the way the product works is not just a matter of ‘this person didn’t get that many views on their video,’ but rather, ‘this person can’t earn rent this month.'”

Shearer did not provide specifics on what this third type of employment would look like and brushed off the question of whether Twitch streamers would have access to such a system. “It depends on how you make it,” he said.

Ultimately, the success of gig workers and people who create videos on YouTube or Twitch is governed by an algorithm—whether it’s rewarding the amount of rides in a certain time frame, or it determines how much of an audience can find creators. it’s easy. Subject. For US legislators, “algorithmic management is going to be a major area of ​​investigation,” said Miriam Cherry, who directs the Center for Labor and Employment Law at St.

Shear said a third type of employment situation, between a contractor and an employee, can benefit creators and gig workers. But under the current arrangement, he feels that “contractor” is a better fit for streamers because it allows them to “make it big and build a business.”

He also compared Twitch to a publishing house, saying the payment structure is more similar to royalty payments than wages. Wages, on the other hand, are a good fit for gig economy apps like Uber, he said, because they’ve become almost universally basic jobs, where the price of labor is pushed down over time.

Currently, Twitch streamers do not receive benefits such as contributions to overtime or unemployment insurance paid through the platform or resort to when booted from the site. They may not even be organized legally under a federation. If Twitch was ever to be shut down, such as Microsoft Corp. As streaming site Mixer did in 2020, streamers would lose their most valuable asset – their followers – which potential sponsors value before offering gamers paid participation.

Brooke Erin Duffy, a Cornell University professor of communications who has written several books about the maker economy, said that diversifying one’s work in apps is an act of uncertainty, not a reward for opportunities. “They do this because the level of volatility is so deep,” she said.

Right now, Twitch is focused on helping streamers earn a more stable and predictable income without burning out. According to Twitch’s head of community, Mary Kish, the company is increasingly asking, “How can we get more money into creators’ pockets over the course of their careers?”

This story has been published without modification in text from a wire agency feed.