I think it’s cool that Ninja’s been doing so incredibly well. He’s on a roll with the awesome Drake co-stream, a phenomenal interview on CNBC, and just generally being a good guy while shattering records.
Heck, I’m willing to bet that CNBC dramatically underestimated Ninja’s monthly income when they said he’s making $500k a month. I’ll go into that in a sec.
I also want to cover why while it’s possible to make that much, it’s hard to do. We’ll go into the numbers on a couple of different scenarios. The critical thing to recognize with each of them is that even the smallest case I’ll discuss is still easily in the top 1% of streamers.
Streaming isn’t an easy job. You work regularly 8+ hours a day ON CAMERA plus another several running the business. A big part of the entertainment value you provide, especially if you’re a single game streamer, is outside of your control. Finally, it’s all on you.
CNBC’s math was incomplete
First, check out what I’ve written on monetization. It was a complete list at the time, but I’m sure there are new monetization routes by now.
My rough breakdown on Ninja is gathered from his stats on SocialBlade and his on-screen sub counter. It’s important to note that while he was a very successful streamer for about three years (and was awesome at Halo long before that) the past 3-4 months include crazy exponential growth. For instance, his sub count and followers count have doubled this past month. A lot of that is Twitch Prime subs because of the Fortnite loot so he may see a significant dropoff. I wouldn’t count on it.
– He has 200k subscribers on Twitch as I’m writing this and probably will get 2-5k more today. He likely gets $3.50 per sub per month after the 45-day payout window. Right there that’s $700k monthly. I’d bet this is where CNBC’s $500k monthly number comes from. Someone did the math (assuming the standard $2.50 and not his premium rate) and did it before he had this many subs. Or else they did it two weeks ago when he had fewer subs. His growth rate has been more than nuts.
– Second, Ninja gets ad revenue on Twitch. The actual CPM is something Twitch holds tightly to the chest and is covered by an NDA. However, the dude streams 10 hours a day to 80k+ concurrents which is likely much more like 1-1.5 million viewers (1.1 mil average last month per SocialBlade). There’s one ad when someone joins, one at the end, and he can run more if he chooses. Call it $2 CPM likely the middle to lower end of standard and say each person sees one ad. With ad blockers that’s undoubtedly a big assumption. Regardless, using those figures that’s $3k a day or $90k a month.
– His YouTube videos get about 4.3mil views each, and he puts out one a day. Say he’s somehow only getting the $2 CPM rate from YouTube that’s $8,600 per day or $258k per month assuming 30 days in a month. The reason I say “only $2” is that his audience is a pretty lucrative segment. SocialBlade has the assumed range anywhere from $0.25 to $4 for CPM which would be $1.1k-$17k per day. The exciting part to me is that this is promising for his future growth. While his Twitch sub numbers might be pumped up by the Fortnite loot offer, YouTube seems to speak to a dedicated audience who might stick around.
– He also sells clothing and other merchandise. I don’t know the rate at which his audience buys. I’d guess it’s a relatively low engagement rate with a community that large but it still has to be a couple of grand per month.
– He sells courses about how he’s developed his stream and brand. They’re $30 a pop. No clue his take there.
– He has affiliate links in his Twitch panels to a PC parts company, a gaming accessories shop, and a gaming chair company. Again, no idea his take there. The gaming company one is likely also a sponsorship. I’ve also not discussed any sponsored content.
– Finally, he gets tips while he’s live. No idea the aggregate features there, but I can say that as a viewer I notice it’s a constant flow of money. Four figures daily would be my guess. If you told me five figures, I’d shrug and believe you.
So if we go by only the assumed numbers and don’t try to estimate affiliate revenue, tips, and merchandise/courses, he’s making $700k + $90k + $258k. That’s $1,048k a month that we can estimate on the low end.
Concerns
Of course, this level of fame and success does come with potential issues. First, since Fortnite is king right now on Twitch and Twitch Prime is offering in-game content, it’s possible that some of the subs are bots who won’t re-up next month. Heck, it’s possible that they’re humans who won’t re-up next month now that they got their loot. Time will tell.
Second, when you get that many donations, you need to worry about chargebacks. It’s not an issue with Twitch’s endemic currency, Bits, but is with PayPal or other sources.
Third, with all of those non-Twitch sources, we don’t know what cut he’s getting from any sale.
Finally, business expenses (even in a relatively low overhead business) and taxes will take a considerable chunk out of that revenue. Yes, Ninja will still be earning a lot but talking about gross revenue of a business isn’t particularly useful.
Other streamers: If you were only interested in the Ninja numbers tune out here. If you’re interested in the business of streaming this is for you.
Ok, so let’s look at some other examples to show why the math seems excellent at the top but gets rougher further down the line. Again, keep in mind that the numbers I’m showing here are easily the top 1% of streamers and likely 1% of all partners. Check out Twitch’s 2017 Year in Review for some general stats.
Part of the problem with actually quantifying this kind of this is that there is so much variability between communities. Sometimes you see people who have 200 concurrents and 1k subs or 1k concurrents and 1k subs. Similarly, some communities tip a lot more or have a much better click-through rate on sponsored campaigns or affiliate deals. The examples below are made up numbers meant to illustrate possibility.
Seriously, check out Moblord’s article on the odds of success in this space. His article doesn’t even go into what happens if you make it but have something change that prevents you from streaming as much. Entertainment is rife with pitfalls and all the more so when you’re self-produced.
Finally, keep in mind that all of these numbers are pre-tax gross revenue, less Twitch’s payout on subs. That means we’re not counting what it costs to produce and maintain a large channel or what you’d pay in taxes. You should likely reduce these numbers by 50%+ to accurately account for business expenses and taxes.
Streamer A
Streamer A is a huge streamer. They may not be DansGaming, Shroud, or LIRIK, etc. but they’re killing it. They’re averaging 1.5-2k concurrents and 2k subs. Their YouTube channel gets 1.5 million views per month. Let’s go through the same math as before.
2k subs are either $5k or $7k per month depending on if they’re getting $2.50 or $3.50 per sub. That’s $60k-$84k annually.
That number of concurrents may translate to 4-5x that number of total views. So, we’ll call it 8k total views daily. If they stream 25 days per month (average to low), then that’s 200,000 views monthly. Suddenly, that Twitch ad revenue with a $2 CPM is only $400/month or $4,800 annually.
Their YouTube channel is a slightly different story assuming they don’t get randomly demonetized. Their 1.5 million monthly views, at $2 CPM, is $3k monthly or $36k annually.
So far we’re talking about $100k-$124k in pre-tax revenue. It’s likely that you’re talking another 30%-50% of that in tips, merch sales, and affiliate revenue. Of course, that is entirely dependent on the community. It could be minimal.
If Streamer A is a variety streamer, it’s not crazy to think that they could have their sponsored content earn them as much as their “normal” content over the course of the year.
So where do we land? Streamer A, one of the giants of streaming, is potentially earning $100k-$320k pre-tax. There’s vast range because of potential sponsorships and the unknown of their community’s engagement in things like tipping, affiliate deal, and merch sales.
Streamer B
Streamer B is still a very prominent streamer. They average 700 concurrents and 1.3k subs. They don’t focus on their YouTube presence per se but have some help with it and are getting about 150k views per month.
1.3k subs are likely $3,250 a month or $39k annually.
If we again use the 4-5x number for their concurrent we’re talking about 3k viewers per day. With the 25 days streamed and $2 CPM you’re looking at $150/month from Twitch ads or $1.8k annually
Their 150k YouTube views are 10% of Streamer A, so that equates to $300 monthly or $3.6k annually.
At this point, we’re looking at $44.4k annually. It’s likely that they do some sponsored content and are getting some decent tips and merch/affiliate sales. Even so, Streamer B is earning an ok annual income, perhaps even heading into the decently above average category, but aren’t buying mansions.
Streamer C
Streamer C is still one of the most massive streamers on Twitch with 300 concurrent viewers. Remember, partners make up less than 1% of the Twitch community, and the current “Path to Partnership” achievement requires 75 average concurrent viewers. They have a deeply engaged community and approximately 750 sub points. You won’t find many streamers where their subs double their average concurrents.
Those 750 sub points translate to $1,875 monthly or $22.5k annually.
Again, assuming their time streamed and concurrents to total views are the same as above they’re getting about 1.3k viewers per day. That’s $65 monthly or $780 annually.
They also put some serious attention into their YouTube channel, and they get 50k views monthly. If we’re using our previous CPM estimates that’s $100 monthly or $1.2k annually.
That is a total of $24,480 annually. Regarding working a standard 40 hours a week hourly job that’s a bit above $12/hour. Except there’s an issue with that figure. First, we assume they’re streaming 50 hours a week. Second, we’re not counting all of the time that they put in to find sponsors, improve the stream, manage the community, and manage the business. If we’re conservative and call that ten more hours a week they’re making $8 an hour. BEFORE TAXES AND EXPENSES.
Since they have a genuinely engaged community, they get a higher than average tip rate and their sponsored content pays well. Perhaps, given that, you could double what they’re earning. Again, keep in mind this is a broadcaster with an extremely engaged community. While they’re earning a comfortable living at this level of concurrents it’s not easy to do.
Conclusion
Yes, CNBC likely underestimated Ninja’s revenue. I don’t know whether it was because they don’t know all of the monetization routes for Twitch, they were conservative, or they were using old numbers. Regardless, I think it’s cool to look at what’s possible with streaming while acknowledging the reality that it’s a hard job with low odds of success.
Does this mean you shouldn’t get excited about streaming or start? No. It’s a great hobby, and if you’re successful enough, it can be an excellent job. I love that people are successful on Twitch because it lets me find enjoyable entertainment and it gives me a chance to give back with the skills I have.
If you are one of the ones who “make it,” reach out! You don’t have to figure this out alone. This is what we do- help streamers make great money decisions. If that’s something that sounds interesting to you reach out me or schedule some time for a free consult. You can check out what I do here.
