How Does the Creator Economy Work?

Social media has become the most influential and significant virtual space utilized by millions of users for social networking and more. Social media’s power to advertise brands and related products digitally is commendable.

While influencer marketing was the “big thing” on social media a couple of years ago, the creator economy is the current buzz. It is powered by the growing ability of creators to leverage social platforms to connect with their audience and make money.

With the COVID-19 pandemic disrupting entertainment media production and distribution, the obvious ways are switched off. Considering the situation, more people are trying to become creators than ever before, seeking the new robust tool stack of the platform to bring in revenue.

What is the creator economy?

The creator economy refers to the community of independent content creators, including writers, online bloggers, influencers, YouTubers, etc. Content curators who follow their passion for building a follower base and monetizing their skills also belong to the creator economy.

Basically, if you create something online and start generating revenue, you are a part of the creator economy. The creator economy consists of designers, artists, writers, musicians, or anyone who leverages modern technology to create an audience, create a community, and their own influential brand.

Creator economy is the modern face of social media, as this new space has been specially created to support aspiring creators in a new way. Instead of making money from advertisements and brand partnerships, creators can directly associate themselves with their audience to sell subscriptions.

It is exactly like the direct-to-consumer movement where creators can enjoy a one-to-one relationship with their audience without having to be at the mercy of social media algorithms.

What is the size of the creator economy- How big is it?

Over 50 million people across the world proclaim themselves to be creators. Out of these, over 46 million people consider themselves amateurs, with two million-plus people thinking of themselves to be professional creators. The latter makes a good amount of money from their passion, considering it as their full-time income job.

Notably, half the professional creators generate their revenue on YouTube, and some on Instagram. Another sizable platform for professional creators is Twitch, with over 3lakh professional video streamers. Yet another emerging social platform is OnlyFans, which allows anyone to sell their product or service. The content circulated on the platform is unique and exclusive content created for subscribers who are willing to pay a subscription fee. It requires no business plan beyond a smartphone and willingness to do impulsive things.

There are over 450,000 creators on OnlyFans; many of them earn over $1000,000 every year by privately interacting with their subscribers. Patreon is another content creation platform used by videomakes to podcasters to offer their “patreons’ ‘ or supporters perks like exclusive uploads, ad-free content, etc for a fee. Ko-fi is a similar platform like Patron which allows people to make donations to their favorite creators. It works more like a one-time tip jar instead of recurring fees.Creator economy allows anyone to get paid, whether for fun or for a livelihood.

What tools are available for creators

Thousands of tools are available for content creation, from building subscriptions and supporting creators to monetization tools. Modern creators of today have essential tools at their disposal required to produce great quality content.

Availability of HD cameras, smartphones, microphones, software for editing, and collaboration apps increases their content’s flexibility and productivity. Besides these, there are software solutions that allow creators to build subscription websites like OnlyFans and Patreon to monetize their content and help others monetize theirs. Contrary to website development from scratch, these solutions are readymade scripts or clones, which makes building and launching a subscription platform easy.

What can content creators sell?

With the advancements in technology, content creation has changed over the decades. For instance, video creation was initially limited to professional film and TV makers. However, with the emergence of YouTube, amateur movie makers started uploading their creations, and now the scenario is like anyone with a good quality smartphone can venture into short film marketing. Let’s look at different ways in which content creators make money on social media.

Selling fan engagement

Modern social platforms allow content creators to sell interactions with fans. The Cameo app is a platform that allows normal people to pay celebrities to record personalized messages for fans based on requests. The marketplace is an idea for fans to pay for custom video shout-outs. The success of the platform is attributed to the ease of making money. Creators can easily earn around $50-$100 for a short 20 or 30-second video.

Starsona, currently acquired by myFanPark, is another platform that allows creators to sell all kinds of interactions with fans. It could be one-to-one direct messaging, Q&A, creating playlists, creating a ringtone, and much more.

Selling online courses and webinars

This is another popular part of the creator economy where online course builder software like Pinlearn, Thinkific, Podia, etc., enables creators to sell and monetize their courses. There are popular creators who are investing in the EduTech industry to turn their passion into a full-time job that is highly profitable. Not just mainstream educators, there are creators with various skills like cake making, electronic music production, watercolour painting, fitness creators thriving in the industry. The creators who have exceptional skills often have a large follower base on social platforms, which they redirect to their online course platform to sellonline courses and webinars.

Selling eBooks and newsletter

Substack is a website that allows creative writers to make money from their newsletters. Journalists and writers can create independent audiences and sell their newsletter to audience for a subscription fee. There are top writers who make over $100k every year on the platform.

Selling eBooks is also another way by which creators can make money. Once written and placed for sale, eBooks keep on bringing revenue, which is really great.

Besides the ways we have just discussed above, here are some more ways creators diversify their income generation.

  • Selling subscriptions.
  • Sharing ad revenue.
  • Receiving tips.
  • Receiving donations from fans.
  • Making money from a fan club.
  • Engaging in affiliate marketing and partnerships.
  • Featuring product placement.

The struggle of earning an income as a creator is real

While the world thinks it is easy to create your economy today and start earning an income, it is not easy for everyone to create a stable income from it. There are indeed millions of creators who make millions in a matter of months; there are millions of others who find it challenging to monetize their content to its fullest potential. Although there are consumers who are willing to pay for exclusive content, the percentage of people who are conditioned to enjoy free content is also on the rise. Due to the availability of free content online, most of them are accustomed to getting satisfied with free content.

In a nutshell, creators need a large-scale following to generate good revenue. The creators who are well-off now have been popular and active on social platforms for some time. Precisely speaking, they began selling content when the buzz was relatively less in the industry. Now that more people have joined the league to get paid for their passion and effort, it can be challenging to create a follower base from scratch.

An average YouTube creator earns $0.5-$6 for 1k views based on the location and target audience. Hence, you must have a good number of followers to make it big on the platform. Not just the number, you need a loyal audience with great engagement as YouTube pays for the number of people who watch ads on your channel without skipping it.

Conclusion

We are witnessing a scenario where short live streams on Twitch compete with the Super bowl; OnlyFans serves as another significant case study. Users are willing to pay for the niche-focused and specific content over the free and generalized content, signalling that the creator economy may be able to support itself. Content isn’t one size fits all, at least no more.

Despite creators facing difficulties in monetizing their content, there remains enough optimism for a bright future for the creator economy. It gives immense hope for new creators to explore the existing opportunities to follow their passion and create income out of it.

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Ashely John

Ashely John

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