With the creation of the internet and the rise in social media, content creators of all sizes have been able to grow a community and earn a profit from their passion.
The passion economy has allowed people to take their hobby or favorite pastime and turn it into income. Whether you are a skincare enthusiast, a crypto educator, and a woodworker, there is space for you in the creator economy.
And the creator economy is thriving. Today, over 2 million creators make six figures or more on YouTube, Twitch, and Instagram, while sponsored influencers are worth over $8 billion, with predictions to grow to $15 billion by 2022.
Understanding and embracing the creator economy will help brands better market their products/services to a wider and more tuned-in audience.
What Is the Creator Economy?
Chances are, if you are on the internet, you have seen the creator economy in full effect.
Anyone who creates digital content online and distributes it to their audience is a creator.
The creator economy has granted access for anyone to become part of a global community. Before the days of the internet, there were barriers in play that limited global connection.
There were limits to the friendships and communities you could join due to distance, access, and cost for maintaining cross-country relationships.
But with the help of the internet and social media, creators on the internet can find their people and build a community from all over the globe.
Animal lovers, art enthusiasts, television, and music fanatics can connect from countries all across the world, and creators are tapping into the global market.
The creator economy is making it possible for people to become their own bosses and discover rich entrepreneurship, which is a favorable break from the traditional, centralized entities and corporations that have historically held all of the power and money.
Creators are cutting through the noise and can have full autonomy over the content they create and the profit they earn.
What Powers the Creator Economy?
The creator economy is powered by the more than 50 million content curators, creators, and community advocates worldwide.
These creators can be found on all corners of the internet; bloggers, written content curators, videographers, and influencers.
And with the help of technology, content creators can flourish with the help of software, apps, and tools that help propel growth and monetize their creations.
Social media platforms often help these creators take off, whether it be streaming on Twitch, creating humor posts for Twitter, or short-form videos on TikTok.
Once they start to buff out their community, curators can use subscription services like OnlyFans, Patreon, Cameo, and Substack to build and foster a deeper sense of community off of social media.
Essentially, the elements that power the creator economy is creativity, technology, and community.
Most Popular Platforms for Creators
When we think of social networks, we are likely to think of the classics that started it all: Facebook, Instagram, YouTube, and Twitter.
But as the passion economy has gained traction, and more creators are defining their niche, there are a ton of new social media platforms and networks that creators and their audiences can join.
Ultimately, it depends on what kind of content you create and what type of audience you are curating for.
We can break down the different types of audience/content a creator will want to produce for, and that will decide the platform they should join for maximum return.
Audio and Community
These platforms give the space for creators to have rich conversations with their communities via chat or audio, often in real-time.
Long and Short-Form Video
These platforms are great for expressing ideas, opinions, or humor via video.
Newsletters and Content
These platforms enable creators to distribute written content to their audience.
Livestreams
Livestream platforms enable creators to talk in real-time to their community, and they can steam just about anything, from videogames to DJ sets.
With that, some platforms allow creators to make closed groups where they can talk and generate a deeper sense of community - Discord, Telegram, WhatsApp, and Reddit.
How Do Creators Make Money?
There are a variety of ways that creators can make money, and for many creators, is it about creating several different streams of revenue.
For a creator to go full-time, they often hone in on their niche and find the right platform(s) and means of creating more passive income.
This can be in the form of:
- Paid and non paid subscriptions
- Course creation
- Tips - platforms like Twitch and OnlyFans allow subscribers to send tips
- Digital content/merch sales
- Sponsored content
- Affiliate marketing
- Brand collabs and product placement content
- Fan clubs
- VIP meetups and events
Trends in the Creator Economy
As the creator economy continues to expand and allows for more people to turn their passion into profit, changes, and trends are emerging that are continuing to push this economy further.
Creators Are Becoming Founders
We are now seeing large-scale influencers and creators becoming the CEOs of their own companies, and it almost always evolves from the passion that got them started creating content.
They are still going to make content for their audience, but now they have actual products and brands that they launch to their thousands/millions of followers.
Some examples include:
- Skincare with Hyram - The famous skincare YouTuber was asked for years when he was going to launch his own skincare brand, and he just announced this month that his own brand, Selfless by Hyram would be launching in Sephora
- Francesca Farago - Influencer and reality T.V. star and turned bathing suit mogul, starting her swimwear line called Farago The Label
- Emma Chamberlain - The famous YouTuber was notorious for always having coffee on hand, so she started her own Coffee brand, Chamberlain Coffee
- Liah Yoo - She started as one of the biggest skincare YouTubers/influencers, and then she switched to Skincare CEO when she launched her own brand, Krave Beauty
Decentralization
If the crypto market has taught us anything, it is that humans put too much trust into large corporate entities.
And these entities and corporations hold all of the power.
At the center of content creation is community, and these creators put massive amounts of trust into these corporations just so they can engage with and maintain their community.
But, if something fails on the end of the corporation or the creator is banned or suspended from the site, then they instantly lose access to the community they worked tirelessly to curate and grow with.
As decentralized entities are becoming increasingly more powerful, we are seeing a shift of content creators finding ways to take their communities off traditional social networks and onto their own private, decentralized networks to maintain and grow their communities with less risk.
Additional Revenue Streams for Creators
The creator economy is rife with inequality, with the largest concentration of wealth being held with the top 2% of creators.
While earning millions isn't going to be the case for all content creators, it doesn't mean you can't live comfortably by creating content for a dedicated and tuned-in niche.
Content creators will continue to create multiple streams of revenue. This can take the form of:
- Subscriptions - Patreon, OnlyFans, Cameo
- Brand deals and collabs
- Affiliate Marketing
- Merchandise and exclusive groups
- Custom courses
Content creators know their audience and will be able to decide what types of revenue streams will be most valuable and sticky for their audience.
Push for More Equity for Smaller Creators
Like all industries, the creator economy does sufffer from inequality, with the concentration of wealth being distributed amongst the top 2% of creators.
On Patreon, the popular subscription-based app for creators to give extra content from paying a monthly subscription, only 2% of creators made the US federal minimum wage of $1,160 per month in 2017.
Additionally, on platforms like Substack, the top 10 creators on the platform are collectively earning more than $7 million annually for their media newsletters.
And famous TikToker Addison Rae is reported to earn around $14,500 per sponsored post. She is the 4th most followed person on TikTok and reportedly earned over $5 million in 2019, due to her 54.1 million followers, her new makeup line (Item Beauty), and deals with American Eagle and Spotify.
The wealth is concentrated at the top, and this is inevitable, but the creator economy needs to be doing more for the middle class of creators.
These are the smaller, niche creators that aren't wildly famous but should be able to earn a good living by creating content.
In an article written by Li Jin for the Harvard Business Review, Jin outlined strategies that platforms can utilize to grow the middle classes of the creator economy, including:
- Recommend content algorithmically with an element of randomness
- Facilitate collabs and community
- Provide capital investment to up-and-coming creators
- Decouple creator payouts from audience demographic
As more and more people are choosing the path of entrepreneurship and using social media as a tool to grow their bank accounts, we must continue to push for a more equitable creator economy.
NFTs Are Gaining Traction
I'm sure you have heard of NTFs or Non-Fungible Tokens being talked about in the media recently. Non-fungible, essentially meaning that the token is unique and unreplaceable.
NFTs can be any digital good; from art to fashion, digital trading cards, and even digital horses you can race.
And NFTs are allowing for artists to scale up, sell their art digitally, and earn good money doing so. While artists have been able to sell their art online historically, NTFs are allowing any artist to reach a new global audience.
Columbia Business School wrote a piece for Forbs, in which they said:
Historically, piracy has plagued the proliferation of digital art. However, as blockchain’s maturation has enabled scarcity in digital markets, demand has surged for unique pieces and collaborations, ushering in a new wave of creativity and collaboration that is quickly changing the creative landscape.
NFTs are adding another additional revenue stream for creators and a chance for them to take full autonomy of their art and sell it to a wider audience than ever before.
Influencer Fatigue
While we tend to blend the word 'creator' with 'influencer' the digital landscape and influencer economy are changing, especially in 2021.
Influencer marketing is extremely oversaturated, and many social media patrons have questioned the genuineness and transparency of influencers.
And with that, influencer fatigue has set in.
Brands need to change their approach and partner with creators that genuinely care about their brand. While many creators have smaller audiences than their mega influencer counterparts, that isn't necessarily a bad thing
What creators can offer brands is the chance to move past vanity metrics, such as likes, comments, and followers, and transition into long-term partnerships with creators that are actual advocates?
What these creators lack in following they make up for in audience engagement. As many people have grown tired of the same influencer with an emoji as a caption and a cute photo, they are now turning towards creators that are relatable.
Brands should shift their influencer strategy to focus more on smaller creators with passionate fanbases.
Conclusion
How are you planning on adapting to the changing creator economy? The creator economy has allowed for new and interesting creators to pop onto the scene and make an honest income.
Adapting to the creator economy will only help brands promote growth to potential customers that will value their brand.
Ready to turn your customers into your team of thriving ambassadors? If so, check out CrewFire's epic demo video to see how you can drive more referrals, word-of-mouth, and user-generated content for your Shopify store.
Get in touch w/ Alan (Founder/CEO - CrewFire):
- Email: Alan@CrewFire.com
- Book A Call: https://www.crewfire.com/call
