What does success look like in today’s creator economy? Is it living life to the fullest, having as much fun as possible and then coming back to show everyone all you did, and how you had fun doing it?
Or is being able to pay all your bills because you get to do what you love and have fun doing? As ad revenues waver, influencers seek stability in subscription-based platforms—could this reshape the creator economy?
The creator economy has been a lot of things to a lot of people; it has been a source of financial freedom and liberation for some, while for others, it has been a source of extra cash to augment your lifestyle, whether that is using the money from social media to pay the rent so you can use the money from your day job to travel to another country and then creating more content that could possibly get you more followers, more money, and then maybe finally quit your day job and go full time into content creation.
What are the Numbers saying
Being a content creator can be a double-edged sword. On one hand, it offers financial freedom and the opportunity to pursue your passion. On the other hand, it often leads to the harsh reality that many creators face: the struggle of living paycheck to paycheck.
This grim aspect can feel like a cruel irony, especially in light of recent Bank of America Institute research. Which shows that while average monthly income for content creators has risen over the past three years, a typical full-time employee in the U.S. earns five times more monthly.
“This indicates that earning a living wage in content creation is a rarity, let alone achieving wealth,” the Bank of America Institute’s research concluded. Analysts point to several factors contributing to this disparity, including a downturn in paid partnerships, an increasingly competitive market for creators, a decline in online viewership since the pandemic, and a concentration of lucrative partnerships among top-tier creators.
The creator economy is a strange one and while this realisation has pushed many to monthly subscription-based platforms like Patreon and Substack, earning a living wage from content creation is still a difficult task, yet not impossible; it just requires creators to get creative with the way the choose to chase a dollar.
While the creator economy as a whole is thriving, it is beginning to feel like a closed shop where many find themselves stuck in the middle and quickly sliding down the ladder as more and more creators join the market and the most elite keep pulling away and taking a lot of the eyes with them.
Nearly half of content creators are employed full-time, yet many depend significantly on brand partnerships for their income. According to a study by influencer marketing agency NeoReach, over two-thirds of creators identify brand collaborations as their main source of revenue.
Alarmingly, more than 48% of creators earn $15,000 or less each year, despite the global influencer market soaring to $21 billion in 2023. Goldman Sachs reported in April 2023 that there are over 50 million content creators around the globe.
This shows that while there is still significant growth, it has begun to slow down. Eventually, there will be a plateau, and that’s what a stockbroker might call the exit point where creators jump ship and move to other spaces.
This creates space for a new wave of creators to come in and wash out the old guard controlling the economy. Unfortunately, we haven’t reached that point and with the evolution of AI tools and even more sophisticated algorithms holding the line and pushing the exit point back, it may be hard to find an exit point for creators.
For example, if the algorithm holds the creator back, just at the point they are about to exit, they are hit by a wave of interactions and followers, keeping them engaged for a while, until, the algorithm is then swayed by another trend, which sends the wave somewhere else.
This creates a negative feedback loop where more and more creators are stuck chasing the massive highs while running in a loop of significant lows until the wave returns to trap them again.
What are creators saying?
On TikTok and Meta’s Instagram, creators have to navigate algorithmic models that control when their content is shown, making income from those apps highly volatile. Earnings can fluctuate dramatically, spiking or plummeting based on how these platforms choose to promote their content.
“I can’t rely on that to be what pays my bills,” said Molly Burke, a creator with more than 4 million followers across her social apps. “As an entrepreneur, as a business owner, as a creator, I have to figure out how I’m going to sustain this as a career for as long as possible.”
This is the reality a lot of creators face as they try to navigate an ever-shifting landscape where algorithms and trends, which are all fleeting and hard to understand, continue to dictate where the eyes go.
This is why a growing number of creators big and small, have pivoted to platforms like Substack, who claim to have over 4 million paying subscribers, and Patreon, the company founded in 2013, which claims to have paid creators well over $8 billion since launch.
The unpredictability of internet virality presents a challenge for content creators who aspire to turn their passion into a full-time career. Meeting financial needs, such as paying monthly bills, becomes a crucial aspect of this pursuit.
Unfortunately, as social media platforms increasingly rely on algorithms to determine the content users see, creators often feel compelled to cater their work to these algorithms, even if it compromises the quality of their content.
Person Thoughts
However, there is a glimmer of hope. Subscription platforms like Patreon have emerged as a solution to this problem.
They offer creators the ability to bypass algorithms altogether and establish direct connections with their most devoted fans. By providing exclusive content to patrons who are willing to pay, creators can maintain the integrity of their work while still earning a living.
Moreover, the rise of creator-owned platforms like Nebula signifies a shift in the landscape. These platforms grant creators more autonomy.
They allow creators to have greater control over their content, decide what their fans see, determine monetization strategies, and shape their interactions with loyal supporters.
This empowering shift away from relying on subscription-based platforms owned by corporate giants is an encouraging trend in the creator economy.
It is important to note that the creator economy is not in jeopardy. However, there is still room for improvement. The industry needs more transparency and a willingness for creators to think outside the box.
Embracing creativity and innovative approaches will pave the way for a more successful and fulfilling creator economy.
Source: CNBC, Bank of America Institute, NeoReach, Goldman Sachs Molly Burke