Becoming a creator is the goal of many people in these times. The buzzword has sparked artists, developers, and other individuals who wish to cash in on their cash to join the creator economy. According to Forbes, there are over 50 million people who are part of this economy.
The rise of the internet has made it possible for anyone with a strong internet connection to produce and market content. The Covid-19 pandemic caused an unexpected tailwind to the community, bringing a new generation of content creators and influencers. Let’s unpack the creator economy and discuss what it is, how it’s changed, and what the future might look like.
What is the Creator Economy?
The creator economy is what’s known as the class of businesses that have been built by independent content creations, community builders, and curators. This includes videographers, bloggers, and social media influencers. The creator economy also includes the software and finance tools that are designed to help these individuals grow and monetize their businesses.
The term “creator” was originally marketed by YouTube, as early as 2011 where it was used as an alternative to using “YouTube star”. By using the term, it helped to depict that anyone, not just a few famous figures, could be successful using its platform.
These days, the word creator is used to describe anyone who produces content online. From Instagram, Twitch, TikTok, to Clubhouse (an invitation-only real-time voice-chat app), an individual who produces content on these platforms is labeled a “creator”.
These creators look to monetize community groups by using at least one platform to earn money. Content creators can create revenue streams through a variety of ways, depending on the platform including:
- Product placement
- Sponsored content
- Fan clubs
- Advertising revenue shares
- VIP meetups
- Digital content sales
- Paid subscriptions
The creator economy is trending to surpass over $10 billion in aggregate earnings. Across 50 platforms, 669,000 creators have been onboarded.
Four Levels of the Creator Economy
The creator economy is similar to startup culture when it comes to how it has different economies for each level. After all, a private equity firm would not be the first place that a startup founder that is raising a pre-seed investment round would look to secure funding.
There are different fundraising stages that both founders and investors understand what’s required out of them.
The creator economy works similarly for creators and companies. Brands and media giants look for influencers to have reached a certain level to be considered for a partnership. Here is a look at the four levels that make up the creator economy below.
This level of creators are individuals who are creating content on the side for fun, although they may wish to find success in the future. The vast majority of content creators fall under this category, making up 99% of the population. Technology has made it easier to enter into the creator economy.
For example, there are creator tools such as Ghost that allow you to create a website without any code, has built-in membership and subscription tools, and other features that make it easy for a creator to share their work and reach their audience on their desired platform.
If you want to create your own podcast, there are audio tools that allow virtually anyone to launch, edit, and create music. You can purchase a decent podcasting microphone for less than $100 that works through your iPhone.
These hobbyists tend to come across three major pain points:
- Not having the time to dedicate toward their craft or not having the funds to invest into a building or grow their business
- Their content or production value is low-quality
- Lack the ability to market their content or distribute it
In this space, a hobbyist will struggle to find success and most will stay a hobbyist. A few hobbyists will earn enough to make a living off their content. The everyday creator is an example of this level of creator.
Some of those creators who started as a hobbyist will make enough money online to make a living off their content creation. These creators will quit their day job and become full-time creators. These creators can live comfortably and pay the bills using the cash flow that they earn.
Many full-time creators wish to spend more time doing leisurely activities when they reach this level. They have the ability to do this from a financial standpoint. Then there are other full-time creators who wish to reach the next step of becoming famous in their respective space.
While these people make sustainable revenue, though they are usually dealing with some of the problems that hobbyists come across. Some of the major pain points of full-time creators include:
- Not having experience running their own business
- Lacking time to create content and/or marketing it effectively
- Not having the resources to create content and/or marketing it
Some examples of full-time creators are Vilma Iris who runs a book review and recommendations blog, Sara and Beth of the podcast Pantsuit Politics, the YouTube cooking video series “Binging with Babish”.
The third level of the creator is the stars. These individuals have signed long-term partnerships with a publisher, record label, media company, or other organization to maximize their reach. It’s also possible for some creators at this level to secure funding from a venture capital firm or investor to help spur their growth.
At this level, creators experience some very different challenges from the previous levels. The common pain points for stars include:
- Maintaining their level of fame and relevance in their space
- Figuring out how to best leverage their brand and turn it into a successful business
- Potential for public relations issues that occur from problematic viewpoints or the uncovering of past transgressions.
Cardi B, Megan Thee Stallion, and Chance the Rapper are examples of content creators who have reached the star level.
The highest level that a creator can achieve is the mogul. These are individuals who have built a business that has evolved and has the power to stay beyond the life of the creator. Reaching mogul status is the hardest level to achieve. Those that achieve this level create generational wealth.
The main pain points for those who reach mogul status include:
- Maintaining a successful business that effectively utilizes the individual’s brand
- Broadening their brand to go far beyond the original creator
- Potential for public relations issues that occur from problematic viewpoints or the uncovering of past transgressions.
Examples of content creators who have reached mogul status include Micheal Jordan, Beyonce, Rihanna, and Gwyneth Paltrow.
How the Creator Economy has changed with the Internet
The concept of the creator economy has been around since 1997. However, it didn’t receive that much attention back then. There were very few tools that individuals could use to monetize their platform and grow an audience.
DeviantArt was one of these few platforms that were available for creators to upload their art. Still, very few people were able to make a living online during this time.
When platforms including Instagram, Twitter, and YouTube started to launch in the late 2000s, the landscape started to change. These digital platforms became extremely popular throughout the world. Even today, these platforms are among the top apps that are downloaded. This allowed users to create a presence online to enable them to build a community of followers.
Social media platforms were the main cause of this boom. For example, Facebook grew from having one million monthly users in December 2004 to reach 100 million users by August 2008. Undeniably, user growth on these web platforms spared digital curiosity which has led to the fast and massive growth that is happening today with media platforms.
What the Creator Economy looks like Today
Creators as businesses are where we are at today with the creator economy! With developed fandoms that are willing to follow them outside of platforms, creators have the potential for multiple revenue streams. This ability goes far beyond traditional opportunities for monetization such as ads.
Companies are seeking a variety of marketing opportunities with content creators that enable them to earn money in a variety of ways. This includes newsletters, coaching, speaking engagements, and premium content. Creators today tend to focus more on creating more niche content that their most engaged fans want versus trying to appeal to the biggest audience possible.
You no longer need to work with film companies, record labels, or traditional publishing houses to make a living off your creative work. Here is a look at some of the creator economy marketplaces that exist today:
- Acast – Create audio content, manage, monetize, and grow a community
- Anchor – Create audio content, manage and monetize a community
- Buzzsprout – Create audio content, manage and monetize a community
- Castbox – Create audio content, manage and grow a community
- Podbean – Create audio content, manage and monetize a community
- Squadcast – Create audio content
- Supercast – Manage and monetize a community
- Ghost – Create emails and newsletters, monetize and manage a community
- Medium – Create written content and monetize a community
- Wattpad – Create a book and monetize a community
- Tales – Create a book and monetize a community
- Revue – Create editorials and newsletters, manage, monetize, and grow a community
- Animoto – Create video content
- Playbook – Create video content, manage, monetize, and grow a community
- Salut – Create live stream content and monetize a community
- My PT hub – Create live stream content, manage and monetize a community
- Superset – manage, monetize, and grow a community
- Strydal – Create live stream content, manage, monetize, and grow a community
- Magistro – Create video content
- Twitch – Create live stream, monetize, manage, and grow a community
- Streamloots – Create live stream and monetize a community
- Uscreen – Create Livestream, manage and monetize a community
- Loots – Monetize a community
- Mandolin – Create live stream, monetize and grow a community
- Onyx Servers – Create Livestream
- Restream – Create Livestream
- Stream elements – Create Livestream, manage, monetize, and grow a community
- Crowdcast – Create Livestream, manage and grow a community
- Discord – Manage community
- Maestro – Create stream and game highlights, manage and monetize a community
- Athenascope – Create highlights
- Epic Games – Monetize a community
- Lowkey – Capture gaming highlights
- Replai – Create highlights
- Unity – Create game
- Nexus – Create a channel and monetize a community
- Metafy – monetize a community
- Combo – Grow a community
- Roblox – Create games, monetize and grow a community
- Virtually – Create courses, manage and monetize a community
- Slip – Create courses, manage and monetize a community
- Thinkific – Create a course, manage, and monetize a community
- Skillshare – Create a course
- Airsubus – Create classes, manage, monetize, and grow a community
- Avocado – Create courses, manage and monetize a community
- Podia – Create courses, manage and monetize a community
- Xperiencify – Create courses
- Splice – Create music
- Sonix – Create music files
- Beatstarts – Create digital music, monetize and grow a community
- Mastered – Create remastered music
- Landr – Create music and monetize a community
- Steam – Create music, manage and monetize a community
- Snapjam – Create music
- Garageband – Create music
- Createsafe – Create music business, manage and monetize a community
- Stageit- Create and host online concerts and monetize a community
- Looped – Create exclusive content and monetize a community
- Memmo – Create exclusive content and monetize a community
- My Fanpark – Create exclusive content and monetize a community
- Instasize – Create photos and videos
- Cameo – Create exclusive content and monetize a community
- Tipsnaps – Create exclusive content and monetize a community
Future of the Creator Economy
As reported by Signal Fire, out of the 50 million creators that exist today, two million are considered professions. A study by the Lego foundation showed that 58% of children respondents can create digital content by themselves. One of the most appealing aspects of the creator economy is the possibility of monetary gain.
The top content creators are the ones that are reaping the most benefits from the creator economy. The biggest challenge for creators who are in the middle is making their voice heard when it’s already loud in the world. Those who wish to build themselves into the creator economy must know which groups to target.
A trend that looks to grow over time is the diversification of revenue streams for creators. Getting paid from ad revenue shares from platforms like YouTube are shifting to getting paid for brand sponsors on Instagram to reach their followers. Another growing trend is creators that are getting paid through tipping or patronage through Patreon and e-commerce that goes beyond the platforms and into entertainment and community.
There are more ways than ever before for creators to leave their jobs to pursue their passion for content creation online. The established platforms such as Facebook and Youtube are the primary drivers of monetization for these creators. The reason for this is that the tech is scalable and there is already a large potential market in place. Social networks by design are already geared towards this.
Even so, there is still a big business opportunity for areas to offer business and creator support that goes beyond the standard creator tools. The parts of the creator economy that are not as scalable can be addressed by technology to evolve a creator’s business to the next level.