The Creator Economy implies that the social graph just like news is experiencing a process of digital transformation. But what will it become, and how will it get there?
When companies launch new companies like Roblox, Patreon, Twitch, Substack, Clubhouse or even Discord and Reddit they envisioned a more democratized model of the social media platform that was more user-centric or even more user-generated-content driven. TikTok is such a super-app today, where its Ad revenue is expected to grow in 2022 over 180%.
What will the next-gen of Creator Economy startups look and feel like? With podcasting, live-video and new forms of immersion thriving, how will the personal brand evolve in AR, VR, Web 3.0 and quantum computing based architectures?
Even as YouTube, TikTok, Snap grow and share more with their creators of advertising revenue and via creator funds, how we understand the Creator Economy as an extension of influencer marketing becoming more mainstream, will also continue to shift. The idea of users creating content for free, without the potential to monetize their time and personal brand online, is fundamentally over.
The Creator Economy is becoming more mainstream as the social graph of the 2.0 internet splinters.
GenZ are driving new ways for personal brands to prosper
What Growth Pains?
Even media companies are trying to create Newsletter clones that mimic the success and growth of Substack.
Substack launched in 2017 as a tool for starting paid email newsletters. How is it faring in 2022?
I don’t see Growing pains, do you?
Publishing on Substack is free, but writers who charge for subscriptions pay 10 per cent of their revenue to Substack and 3 per cent to its payment processor, Stripe.
While it’s just the beginning for the 5 year old company, things are in some sense going well.
On April 12th, 2022 Substack itself released a new feature that enables Creators to recommend other Newsletters and Podcasts on the platform, which changes how fast smaller Creators can grow their audience.
Because course-building platforms (like Thinkific or is about Ed-Tech, the Creator Economy is now scaling into unchartered territory.
How Big is the Creator Economy
All told, with an estimated $100 billion in annual revenue, the Creator Economy has not only launched the careers for thousands of creators, but it’s also become the core focus for many of the world’s largest tech platforms. This indicates it will be the gig-economy in a more decentralized remote work future.
If historically the Creator Economy has grown fast, it may be growing faster now circa 2023. This is because GenZ who has grown up in a creator-first world with YouTube, Snap and TikTok are moving those platforms into the mainstream.
As the Creator Economy matures, Creators will get bigger pieces of the pie as they migrate to more “Creator-First” platforms.
Meta / Zuck announced 52.5% of each sale to the Creator and said "We think it’s a pretty competitive rate in the market." Let’s compare what the actual rates in the market are:
Creators get... (circa mid 2022)
Creators get...
0% from IG, Twitter, Linkedin 😝
28% from Roblox
52.5% from Meta Quest Store + Horizon Worlds
50% from Twitch, up to 70%
55% from YouTube
70% from PlayStation
70% from Microsoft Xbox
70% from Valve Corp. up to $10M, then 75-80%
70% from Samsung Electronics Galaxy Store
80% from OnlyFans
80% from Apple App Store up to $1M, then 70%
80% from Amazon App Store up to $1M, then 70%
85% from Google Play Store up to $1M, then 70%
85% from Microsoft Store, up to 88%
88% from Epic Games
88% from Patreon, up to 95%
90% from Substack
93.5% from Etsy
95% from The Sandbox + re-investment into Creators
97.5% from Decentraland + secondary sale royalties
97.5% from OpenSea + secondary sale royalties
Source: Sandra Wong (April, 2022)
Notice how Web 3.0 platforms Creators typically do a lot better in terms of gross revenue.
a16z. is Betting on the Creator Economy
https://a16z.com/tag/creator-economies/
Facebook’s ability to “clone” the Creator Economy will also likely be limited and fail. Just like Instagram Reels is unlikely to compete with TikTok or even Snap for that matter.
A lot of product features at Meta, never see the light of day. The kids have left the station.
Meta plans to clone Robox, a digital currency that will act a a stablecoin in Halo Worlds
Creator economy startups are a booming niche that's set to attract $5 billion in funding this year.
The Creator Funds of companies like LinkedIn, Pinterest and Facebook look like a horrible ploy to clone younger platforms more in tune with the “Creator-First” movement. These platforms belong to the image-centric internet, or Web 2.0. They missed video-native mobile consumers. They didn’t innovate or even keep up.
Web 3.0 movement might help build a “middle class” for the Creator Economy.
Watching Web 2.0 companies pretend they are building “Creator Economy” features is downright painful. Like a Creator Fund pilot for 100-200 people on a network with 800 million users. Twitter doesn’t even have debates about the Creator Economy, I googled it to find a Substack writer tweeting about it. Reddit thinks decentralization is about having auto-moderation.
The Creator Economy is a Youth Movement
The moment YouTube started to realize it had to be Creator-centric to grow its creator base, the ball started get moving. From TikTok, Snap to other youthful apps, the Creator Economy has never really looked back.
Clubhouse was founded when the pandemic began in 2020, it’s already raised $110 million. Since the pandemic, podcasts, live-streaming and even Newsletters have exploded. New media has taken shape. The Creator Economy wasn’t born yesterday, but it’s clearly just getting started.
If you see this as clearly as I do, feel free to share it.
If you want to support me so I can keep writing, please don’t hesitate to give me tips, a paid subscription or some donation. With a conversion rate of less than two percent, this Newsletter exists mostly by the grace of my goodwill (passion for the Creator Economy) & my own experience of material poverty as I myself pivot to the new world.
Anyways I hope you enjoyed the topic, that’s all for today.
How Big is the Creator Economy today Really?
With more than 50-60 million independent content creators, curators, and community builders fueling this new trend in mid 2022, this generation of micro-entrepreneurs is currently valued at $20 billion with estimations that it could grow to a $104.2 billion market in 2022 — with $800 million in venture capital in these creator ventures year over year.
Just like GenZ were better “internet creators” than Millennials, there’s no reason to believe the Alpha cohort won’t be even better with more sophisticated ways to brand out to monetize and earn a living through digital transformation.
In fact this is guaranteed since the Creator Economy also scales off digital advertising, gaming and other industries that are naturally growing very fast. Few in 2022 even fully understand this, but they will.