The Creator Economy is a software-facilitated economy that allows creators to earn revenue from their creations. Examples of creator economy software platforms include popular platforms like - Twitch, Substack, OnlyFans, Lightricks, YouTube, Instagram, Spotify, TikTok and Patreon. - courtesy Wikipedia.
Okay… So this is what Wikipedia says… But let’s come out of the “hype” part, which is usually directly connected with these social platforms, and dive deep into understanding the Creator Economy. To start with, let’s focus on the basics.
Understanding the creator economy requires a deeper exploration of independence, creation, patronage, and the power of technology in general - that’s what this newsletter is all about.
Basics of The Creator Economy?
The creator economy consists of people who, just like any of us, have a hobby that becomes monetizable. For platforms, they are the tools that allow creators to make an income from doing what they love.
To make it more interesting, in short: a creator economy is a large group of independent creators building solo, tech-enabled digital businesses. There you go - now that sentence contains a lot of loaded terms:
An independent creator is someone who makes some sort of product - a video, writing, technology, images, or other digital goods - to distribute online. We can't speak of the creator economy market size without mentioning independent creators, especially on YouTube. The yearly revenue of YouTube estimates at $30 billion and all thanks to independent creators- YouTubers. Further, it has been estimated that the creator economy is worth at least $100 billion.
A solo digital business is any business that can be run from a laptop by one person.
In this context, tech-enabled means that software handles the jobs of multiple employees (marketing, customer support). The creator can run their entire business solo. They can also work with just a small number of contractors or freelancers supporting them.
“Becoming A Creator” - Can It Be a Successful Career Option?
Over five billion people currently use the internet. Of those, 93% are using their mobile to access the internet, spending in the region of seven hours online daily across several different media platforms.
In addition, a staggering 29% of American high school students have “creator” as a preferred career choice - they want to be their own boss by immersing themselves in a world where they love creating content for their fans and making income from it, anywhere in the world. The 9-5 job is not as popular anymore.
A Short History of Creative Economy
While the creator economy as we know it is relatively new, it is built on a social media and digital foundation that has been in the works for a decade. Digital platforms like YouTube, Facebook, and iTunes arose in the late 2000s, giving creators a way to publish content and gain followers.
Creator Economy Market Size – Source: Gumroad Creator Economy
Creators started earning money for their content with platform-enabled monetization, such as earning money from ads on YouTube, Instagram or Facebook or being members of Creator Funds on TikTok, Pinterest, Club House and LinkedIn.
However, creators started thinking outside the established platform box in order to earn money for their skills, knowledge, and effort. Subscription-based funding, brand deals, online classes, direct sales, and service offerings are just some of the ways creators are making money outside of ad revenue. The Creator Economy can be visualized as:
Who Are The Creators Participating In This Economy?
Social media influencers, bloggers and writers, self-employed consultants and specialists, videographers and podcasters, comedians, video game streamers, artists and illustrators, and musicians all contribute to the creator economy. You can find both full-time professional creators and part-time monetizing creators in the creator economy.
Forbes states that there are more than 50 million people worldwide who consider themselves creators. In fact, a third of kids aged 8 to 12 currently want to be YouTubers when they grow up. We tell people to “do what you love and love what you do”. The creator economy enables just that.
The Top Trends In The Creator Economy
Creators moving their top fans off of social networks and onto their own websites, apps, and monetization tools.
Creators becoming founders, building out teams and assembling tools to help them start businesses while focusing on their art.
Creators gaining power in the media ecosystem as fans seek to connect with individual personalities rather than faceless publishers.
Using platforms like YouTube, Instagram, Snapchat, Twitch, TikTok, Substack, Patreon, and OnlyFans, content creators can earn money through:
Advertising revenue shares
Sponsored content
Product placement
Tipping
Paid subscriptions
Digital content sales
Merchandise
Shout-outs
Live and virtual events
VIP meetups
Fan clubs
Creators Are The New Founders
We’re at an inflection point in history where becoming a professionalized creator is one of the most desired jobs. Creators become creators because they love to create. As they grow their audience and expand their revenue channels, the burden of managing the day-to-day of their business grows heavier. Startups that will dominate the next stage of this evolution are ones that are centered around empowering creators to seamlessly monetize while staying focused on what they already love — creating content.
Being a creator today requires evolving from being an artist to being a founder. The job has come to encompass product management, design, community engagement, e-commerce, and data science along with being an entertainer. You have to build a team of experts and vendors to help you manage the tools to build a diversified business across platforms.
But with that diversification comes resilience. Creators become less vulnerable to shifts in priorities of the tech giants or their algorithms by owning a direct relationship with their fans. Each creator can assemble a different balance of revenue streams to match their style, no matter how niche. That’s a big win for everyone because creators catering to each of our esoteric interests can build a sustainable careers. Instead of just homogeneous, lowest-common-denominator primetime sit-coms, we get content tuned to every sub-culture in the rainbow. Now there are finally enough creators to support a whole ecosystem of startups helping them turn their passion into their profession.
To Be Continued…
That’s it for today :-)
Hope each of you has a great start to your day. I’ll talk to everyone tomorrow.
— Amit
I am a technology enthusiast, entrepreneur & creative thinker, who enjoys crafting Tech Products to make a real difference.
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