the creator economy

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It was 2012 and I was in college at Northwestern taking a course called “New Media and Popular Culture.” Our group project was focused on “virality” and on providing a definition for the word “meme.” Instagram hadn’t been invented yet. Two years later, I wrote my senior thesis about the “Attention Economy” at a time when digital attention was still scarce, meaning obtaining it meant obtaining a kind of enduring wealth.

Fast forward a decade later and it almost feels like you’re in the minority if you haven’t gone viral at least once in some way. Our attention is slippery and splintered.

The rise of global social media platforms (Facebook, IG, YouTube, Snap, etc.) made it possible for anyone to produce content, garner attention, and generate large followings.

The “creator economy” is the economic system built by the rise of these “influencers” or “content creators” (used interchangeably here). It is the ecosystem between creators, consumers, advertisers, and other stakeholders, and has significant implications for the way content is created, distributed, consumed, and monetized.

Today, being an “influencer” is now one of the most desired career paths for both children and adults, with 54% of Americans ages 13 to 38 saying they’d become one if given the chance.

The creator economy is booming.

- The creator economy is worth over $104 billion dollars—an estimate that continues to grow as investors pour more and more capital into a suite of platforms, tools, and monetization enablers aimed at supporting content creators.

- Businesses are increasingly turning towards influencer marketing to acquire new customers. Recent privacy-focused updates by Apple and Google and unsustainably high paid marketing costs have made discoverability an issue for brands. The current influencer marketing TAM is estimated at ~$8bn and it’s expected to grow to $15bn by the end of 2022, making it one of the fastest-growing business sectors.

Content creators are turning towards entrepreneurism to monetize attention.

- Content creators largely follow the same lifecycle: build a personal brand, amass a following, monetize, and manage a business.

- Revenue streams are typically pieced together across multiple platforms in some combination of affiliate ads, paid opportunities, product/service launches, platform creator funds, and/or subscriptions.

- Creators are becoming founders to expand their revenue channels, building out teams and assembling tools to help with the burden of managing a business (especially as a solo-preneur).

- Discoverability is also an issue for content creators: 52% stated that generating new leads was their biggest challenge, with nearly 90% of creators citing social media as their main source of lead generation.

- The economic inequalities present in the greater economy exist within the creator economy as well, with only the top creators profiting.

- Despite being the driving force behind digital culture and capitalism, most content creators are unhappy and ultimately unsuccessful in monetizing their personal brands—more on their pain points here.

Consumers want curation, access, and content—and are willing to pay for it.

- Trends around curation have emerged as a reaction to an increasingly fractured landscape, content overload, and market saturation.

- Followers are interested in taking a more active role in financially supporting their favorite creators. Among consumers’ reasons for directly paying creators: exclusivity (71%), inspiration (69%), access (66%), and community (51%).

- Platforms are continuously introducing new ways for followers to pay and directly engage with their favorite creators (Snap introduced tokens, sending tips or donations, etc).

Communities are valuable assets.

- Creators are looking to move followers off social platforms and into more controlled ecosystems where they can directly own the relationship with their fans.

- A smaller, engaged community is more valuable than a larger, passive audience.

- Communities can serve as free and direct communication, marketing, and distribution channels.

- Interest-based platforms that drive meaningful new relationships are on the rise. 2 of the fastest growing categories across the social app ecosystem are friend discovery (platforms that allow members to discover and connect with one another, often through common interests) and vertical communities (those that enable further engagement around specific subjects or activities).

Problems:

1 - Platforms have become the new gatekeepers, capturing value at the expense of creators and consumers.

2 - Content creators continue to need better ways to monetize.

3 - Content creators need more ways to be discovered.

4 - Content creators need the ability to easily transfer their followers from one app to another.

What’s next:

I believe that we should experiment with new models of how content creators organize, capture and transfer value, engage community, and build wealth so that the path to monetization is possible and equitable.

I’m currently working on one such experiment called “Sister Sister.”

questions, comments, or concerns? reach out using the form below!