Can DJs on Twitch Replace Clubs? It Depends on Who’s Paying

Like many DJs, Soul Clap turned to livestreaming to play gigs during the pandemic, quickly settling on Twitch as their preferred virtual venue. Paid subscriptions and tips from listeners helped cover lost touring income, and earlier this year, they got a major financial boost when Twitch itself began paying them to produce content.

Goldstein and Levine now receive regular payments from Twitch, and have boosted the amount of content they produce on the platform. Alongside their classic solo and back-to-back DJ sets, they hold a weekly chat session, a regular showcase of obscure records and visual art, and even a kids’ dance show. 

Levine said this partnership deal was a “life raft” for the duo. Jonathan MacDonald, who manages Soul Clap and several other artists that have secured similar arrangements—including Seth Troxler, Justin Martin and Ardalan—was less metaphorical: “I wouldn’t have a job right now if it wasn’t for Twitch,” he said.

Many other DJs—even those that haven’t secured paid partnerships—have become similarly reliant on livestreaming during the pandemic. It’s enabled them to connect with fans and share new music, maintaining some sense of community while clubs are closed. 

With vaccines now rolling out, clubs and festivals are moving towards reopening. But the lockdown-induced growth of livestreaming has sparked important questions about how artists and rights holders should be paid for the music they create or own, and the role tech platforms should play in this ecosystem. 

Musicians of all stripes have performed virtual gigs during the pandemic, turning to giant platforms like YouTube, Facebook and Instagram and even video games like Fortnite. But for electronic dance music in particular, Twitch has become a juggernaut, striking content deals with event promoters like Paxahau, the people behind the seminal Detroit Electronic Music Festival, and audio distribution sites like Soundcloud and Beatport. 

Alongside paid partnerships with individual acts like Soul Clap, these deals show how Twitch is investing to attract more DJs to its platform. This is welcome news for the nightlife industry, which has been devastated by the pandemic and left without much in the way of government aid. 

But it’s also confusing, because Twitch’s community guidelines explicitly prohibit DJs from playing music to which they don’t have the rights. Breaking these rules can lead to legal challenges, and even ejection from the platform.

For artists who have built their careers by mixing together other peoples’ music, this should be a serious roadblock. It has its origins in decades-old copyright law and negotiations between Twitch and major music labels, which are pressuring the Amazon-owned company to pay licenses for copyrighted content that is shared on its platform. 

As these talks drag on, Twitch has in recent weeks taken steps to de-emphasize DJ content. Sources told VICE the company has begun featuring fewer DJs on its homepage, and is encouraging partner artists to create content that doesn’t risk infringing copyright law, like chat shows. 

Still, many DJs continue to use Twitch to ply their trade just as they always have—playing music by other artists. But as long as the site doesn’t have license deals, these DJs are shouldering the legal risks of copyright infringement themselves. So far, none of the artists VICE spoke to for this story have faced serious legal action, but many wonder how long this can last. 

“That’s the most frustrating thing,” said Kayper, a former BBC radio presenter who has been streaming on Twitch since last summer. “Twitch is supporting DJs to create content, and I don’t believe they would do that unless they had a plan. But at the end of the day, it’s down to the labels, and negotiating with the labels is not easy. And until something is finalized, it’s the DJs who are in the dark.”

But Twitch’s features make it a good surrogate for the physical world of nightlife. Its great sound quality is perfect for music, its interactive chat goes at least some way to recreating the hype and excitement of the dance floor, and its social networking capabilities help foster a sense of community.

“Fans love being on Twitch,” says MacDonald, Soul Clap’s manager. “It’s like an online radio station with video. You can message artists directly, get your name shouted out. You get to know people, and the DJ really feeds off the live chat.”

But another reason Twitch became such a haven for DJs is that unlike Facebook, YouTube and Instagram, it doesn’t automatically mute livestreams featuring unlicensed tracks. Platforms that do this are a major buzzkill for DJs—even musicians who play their own tracks can find themselves being muted if the copyright is owned by someone else, like a record label, publisher, or even a specialized investment fund.

YouTube had already been on top of copyright for some time when the pandemic arrived; its ContentID system, which detects and mutes unlicensed content, makes it unsuitable for most DJs. Facebook and Instagram, meanwhile, began cracking down on copyright last year, muting streamers if they ignored warnings to stop playing unlicensed tracks. 

These copyright takedowns were enough to persuade many DJs—some of whom were already considering the platform for other reasons—to migrate to Twitch. “People said you can earn money, and the sound is better. And then when the copyright stuff started happening on Instagram and they shut people down, I moved to Twitch,” said Kayper. 

But then, around June 2020, Twitch users were inundated with emails from the platform warning them of copyright claims from music labels. Threatening suspension, Twitch removed any offending video clips that streamers didn’t delete themselves.

While some news outlets presented last year’s Twitch takedown fiasco as an attack on DJs, Twitch later claimed that it mostly affected gamers playing music in the background while livestreaming. And importantly, these takedowns only targeted “video-on-demand” clips—archives of previous streams—as opposed to live broadcasts.

Nevertheless, users were understandably upset to see big chunks of their past work deleted, generally with minimal warning and few tools to rectify the problem. For many DJs, the episode had echoes of SoundCloud’s haphazard application of copyright, which reached parodical levels in 2015 when the site removed a cover version of John Cage’s silent track “4’ 33”.

Last November, Twitch published a lengthy blog post explaining what had happened, which gave many streamers a crash course in the Digital Millennium Copyright Act (DMCA). Signed into law under the Clinton administration in 1998, the DMCA was designed to reflect the evolving digital media landscape to ensure that copyright holders—musicians, songwriters and record labels, amongst others—would get paid when their content was played.

The gist is: if you own the copyright to the content you’re playing, you’re fine. If you don’t own it, but you receive permission from whoever does, you’re fine. But if you don’t own it and don’t have clearance, you’re breaking the law.

Like other social media companies that were built as open platforms for sharing content, Twitch benefits from a “safe harbor” under the DMCA. This means that Twitch itself is not legally responsible for content that violates copyright; it just has to enable rights holders to flag violations, pass those violations on to the streamers who committed them, and remove the offending content if users don’t do it themselves.

So as Twitch explained in its blog, last year’s torrent of takedown requests was not from Twitch itself—they came from major record labels like Sony, Universal and Warner and industry bodies like the Recording Industry Association of America (RIAA). Twitch simply passed them along to streamers, as it is obliged to do under the DMCA.

It might sound like your typical nightclub tableau, but none of these people are in the same room. Digweed is broadcasting the set from his basement—it’s a celebration of the first anniversary of his “Bunker Sessions,” the weekly livestream he started last March when COVID-19 mothballed dance floors and DJ booths all over the world.

Digweed streamed his first Bunker Sessions episode via Facebook Live, but quickly ran into problems with streams being muted for DMCA violations. But while many of his peers migrated to Twitch, he eventually settled on Mixcloud, a much smaller platform whose approach to copyright helps illustrate the conundrum Twitch currently faces. 

Founded in 2008 as a platform for DJs to upload recorded sets, Mixcloud rolled out its own live-streaming service last year. It takes a proactive stance on copyright—it sets up licenses with rightsholders, uses technology to identify when their tracks are played, and then pays them royalties with revenue from ad sales and subscriptions. Broadly speaking, it’s a similar setup to radio, or on-demand streaming apps like Spotify.

Practically speaking, these license arrangements mean DJs don’t have to worry about being muted mid-set. In ethical terms, it means they can also be confident that the musicians and labels whose work they are showcasing are getting financially rewarded. 

“Artists should be paid for plays on streams,” says Digweed. “Streaming royalties are a fraction of what an artist would get for a physical or download sale but are still an important contribution to the music ecosystem, and can be a lifeline to new and lesser played artists.”

Since last year’s takedown fiasco, Twitch has proactively licensed some music through a tool called Soundtrack by Twitch. This is essentially a database of music it has secured the rights to—from just over 30 distributors, including UK drum ’n’ bass label Hospital Records and Above & Beyond’s trance imprint Anjunabeats—that users can play in the background during their livestreams. 

But Soundtrack is not designed for DJs. You can’t mix with it, or even select individual tracks; you just pick a particular vibe, like “dance” or “lofi hip hop,” and let it soundtrack your stream. It’s also a halfway house, minimizing Twitch’s costs. Some music industry leaders have accused Twitch of designing the tool to skirt rules around the most expensive licenses. 

Twitch does pay public performance licenses so users can perform live music—for example, cover versions of songs by established artists—without violating copyright. But while this protects streamers who want to play their own rendition of “Africa” by Toto, it doesn’t necessarily protect DJs whose sets are built around mixing together pre-recorded tracks. 

DJs who partner with Twitch are asked not to play unlicensed music in their livestreams, but the platform doesn’t monitor their broadcasts to check. It advises them not to post recordings of  their sets as video-on-demand content, which it does monitor for copyright violation—but even if violations are found, Twitch still isn’t directly liable. It just has to tell the streamer to rectify the issue—and show that there are consequences, like ejection from the platform, if they don’t. 

But if Mixcloud—a much smaller company, without the backing of a behemoth like Amazon—can get a deal like this, why doesn’t Twitch?

For one thing, it’s a matter of priorities. Mixcloud’s co-founder Nico Perez points out that his company has always been singularly focused on the DJ community: “We are DJs, and we built the site for other DJs,” he said. “If you contrast that to Twitch or Facebook, the DJ user group isn’t that important for them.” 

In its November blog, Twitch acknowledged that this was a sticking point in negotiations with rights holders.

“The current constructs for licenses that the record labels have with other services (which typically take a cut of revenue from creators for payment to record labels) make less sense for Twitch,” it said. “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.”

Essentially, Twitch appears unwilling to shoulder the cost of licenses out of its own pocket, said Aneesh Patel, a music lawyer with experience in the tech industry. 

“They’re implying that if they’re going to license music, they have to come up with a business model that passes those costs on to the users that upload that content,” he said. “Basically, they’re not going to bankroll a music element to their platform just so creators can make money. Amazon isn’t going to back this if it isn’t profitable.”

The difference these costs can make to the economics of streaming platforms are pretty stark. At the moment, Twitch splits subscription revenues at least 50/50 with streamers and offers them a proportion of ad revenue. By contrast, DJs on Mixcloud only get 18 percent of subscription revenues, while Mixcloud itself takes just 12 percent—the artists and songwriters whose music was played get 65 percent, and five percent goes to pay transaction fees.

At the same time, the fact that Twitch is paying DJs to stream on its platform suggests it sees long-term promise in this new group of creators. So what’s the game plan?

For years, Facebook argued that because it wasn’t responsible for the news content its users shared, it shouldn’t have to pay the outlets who created it. This came to a head last month when the platform banned Australian news content from being shared, only to reverse course days later when it struck a payment deal with publishers.

Similarly, Uber has long fought against laws that seek to define its drivers as employees rather than contractors, which would substantially increase the company’s costs. It got a reprieve recently when California voted to exempt tech platforms from fully complying with labor laws—before hiking its prices anyway—but other jurisdictions like the UK have taken the opposite stance.

Streaming platforms are also facing pressure from regulators for the content their users broadcast. For example, Article 17 of the European Union’s new copyright directive requires platforms to seek licenses from rights holders, and pushes them to actively screen streams for copyright violation at the point of upload.

After Brexit, the UK is unlikely to implement Article 17. But last October, Twitch representatives were part of parliamentary hearings to examine whether the economics of streaming might be hurting musicians. In the US, a Senate committee held a hearing in December to discuss copyright legislation, featuring representatives from Facebook and YouTube.

There are economic pressures too. Rights holders have become wiser to tech platforms skirting copyright obligations, like when Peloton was sued in 2019 for featuring unlicensed music in workout videos (a case it settled last year). If livestreams become more embedded in the music industry—for example, via ticketed streaming—licensors will push a lot harder for a cut of sales.

This evolution might not be that far off. As the nightlife industry charts its course back to normality after COVID-19, ticketed livestreams could be a critical part of reopening plans, said Josh Houtkin of Brooklyn nightclub Good Room.

“If you had asked me two years ago if I would want cameras in the club, I would have said no,” he said. “But say we have a 25 percent capacity limit [because of COVID restrictions] and we sell out in advance—that might create some sort of FOMO, and people will be willing to pay to stream the set from home.”

If livestreaming does become a permanent fixture in the nightlife industry, some believe Twitch’s paid partnerships with DJs could give it an edge in negotiations with major labels and other licensing bodies. 

In the same way that Spotify’s growth has enabled it to pay lower royalties, Twitch could use its increasing influence as a music platform as leverage to eventually extract less onerous pricing from rights holders, said Patel. “Now, the labels need Spotify,” he explained. “The more music there is on the service, the higher the negotiating leverage of the platform.”

It’s easy to forget the role consumers play in all of this—however small, they do have some level of influence. Digweed points out that while tech platforms have businesses to run and investors to satisfy, fans can easily vote with their wallet.

“I don’t think Big Tech gave that much thought about club culture,” he said. “The tech giants make the platforms, but it’s down to the fans to choose and use the platforms that reward and pay the music creators.”

Then again, fans go where the musicians are—and in the current economic environment, it’s harder than ever for DJs to resist the allure of a lucrative revenue split and the potential for paid partnerships. “From the perspective of an artist who got a deal, I am so lucky to have that, and I am grateful,” said Levine of Soul Clap.

When contacted by VICE for comment about copyright issues, a company spokesperson said Twitch provided an “audiovisual live streaming service, not a digital audio streaming service.” They noted that the company pays for performing rights licenses, and is still in talks with major labels about other potential licenses. None of the labels responded when asked for comment.

Asked why DJs had recently been moved off its front page, the spokesperson said Twitch “may choose to amplify certain voices/genres” at different times. As for DJs who have been asked to produce different forms of content, they said exploring new formats was also standard practice as “these kinds of experiments help our streamers and our new verticals grow.”

The company insists it’s committed to the electronic music community. “We’re excited for the future of electronic music on Twitch as we continue to navigate this ever-evolving world together,” said Will Farrell-Green, head of music content at Twitch. 

But among some DJs, there is also a gnawing sense that Twitch’s foray into club culture is an experiment. If it doesn’t work out, DJs could lose the communities they’ve built on the platform, and have to rebuild them somewhere else—a far bigger blow for them than for a tech company with a $1.7 trillion market cap, or the giant record labels it’s negotiating with.

“I do feel a bit like a lab rat,” said Kayper. Although she intends to continue streaming on Twitch because of the strong following she has built and the fact that the site enables her to earn income, she’s worried about the implications if a deal doesn’t materialize. 

“We just have to wait and see where this goes. But if the labels and Twitch can’t come to an agreement, we as DJs and artists have a lot more to lose than they do.”

Follow Will Caiger-Smith on Twitter.