Hey Everyone,
The Creator Economy hasn’t lived up to the hype. In fact, many Creators are actually grifters. What is a Grifter? A person who engages in petty or small-scale swindling. For example in my space, I see many of the same folk who were behind Web 3 products, now doing the same with AI products.
I’ve read most if not all of the “State of Creator Economy” 2023 editions.
Creator economy now worth $250B
The 25-year-old creator economy is now valued at $250 billion globally, boasting tens of millions of employees and influencers, but many still don’t consider it a real industry.
In 2021, Stripe aggregated data from 50 popular creator platforms on Stripe and found they had onboarded 668,000 creators who’d received $10 billion in payouts. Recently in 2023, they refreshed that data and found something surprising: the creator economy is still growing about as fast as it was in 2021. Today, those same 50 creator platforms have on boarded over 1 million creators and have paid out over $25 billion in earnings. Sounds really good right?
People like a16z, one of the main funders of Substack, invested big in things like NFT platforms and Creator platforms and some AI platforms as well. But if let’s consider $80,000 USD as a baseline for a basic living wage on Substack, how many Creators here do you suppose are hitting that mark after deductions from Substack and Stripe?
It’s way lower than 2.8% Stripe is proposing for the percentage of Creators who make a livable wage. What constitutes a living wage with inflation, wage-inflation and higher costs of housing though?
Creators are Losing to Inflation
According to data from stripe comparing again 2021 and 2023, The percentage of US creators earning a US living wage is 2.8%, down from 4% in 2021. As more people enter the Creator Economy, this number is sure to fall, and not improve. More competition will mean more synthetic winners and not real “creatives”.
The Creator Economy was supposed to be boosted by the likes of YouTube and their competitors. Platforms like TikTok, Instagram, Snap, Pinterest, LinkedIn and others have dabbled in Creator funds, without much to show for it. TikTok has been compared to “renting space”.
Everyone from beehiiv to Twitch help us pretend it’s easy to make money as a Creator, well guess what, it’s not. Most of the Creator platforms are boom and bust cycle perpetrators, so Creators are always starting over, starting again and losing it all over such a cycle. Now with ever more Creators and now with AI, Creators will be in an impossibly competitive environment.
If I’m among a category leader on Substack in a given topic (a trending category in 2023), and I’m making less than half of a living wage after two years of top effort, something is very wrong with the system. Subscriptions aren’t enough, among other things. What sacrifices I have had to make, what sacrifices will me and my family have to make?
If a platform pretends its a viable space for Creators, that’s also part of the grifter-economy game and imbalances supply-demand for that kind of content. Competition in the Creator Economy is fierce and who you know might matter more than the quality of your content. Who you know is after all the network effect of the game!
According to ConvertKit there are also more new kinds of Creators each year:
Blogger
Digital creator
Educator
Coach
Writer
Designer
Artist
Marketer
Film maker
Musician
But is any of it sustainable? You’d have to build a flywheel around courses, Newsletters, digital one-offs, consulting and Sponsors among other things, to make it a variable business model. Where is the stack that enables me to do this? I need to run around like a chicken without a head begging, paying all of these subscriptions and building like crazy. But what for? It’s more than likely just a castle in the sand, ready to be washed away by yet another boom and bust cycle of the Creator Economy, and now, the advent of A.I.
The demand for paid subscriptions alone, just doesn’t cut it to pay the rent guys. I quit my job and my revenue is going down (October, 2023). My career earnings and retirement savings, after years of bootstrapping, regrettable. And so, where is this Creator Economy everyone is cheering for?
The Subsack culture writers who seem to think this platform is incredible, are likely making the least out of all of us! Why Substack decided to market to them is beyond me. That’s not a target customer, it’s a grifter tactic to even target those vulnerable writers.
So many would-be platforms that in this latest startup apocalypse, might not actually survive: (If my own experience is any indication).
How do you build a sustainable Creator business when the platforms are grifters themselves, many of which won’t survive and where traffic tends to dry up in just a few years or worse!
You invest in a platform, only to find you are left at square one. So far this has occurred for me on Medium, LinkedIn and I’m worried the same is happening on Substack as well. Had I gone to beehiiv in 2021, I’d be making 4x as much due to the Advertising revenue and the way they grifted on how to super-charge list size faster.
But I’m an old dude, I did not invest in beehiiv or Video, namely because I have no competence in rundowns or video content. It’s not my jam!
LinkedIn’s algo changed credibility rating, whereby if I’m not working in that industry, I’m not seen as a legit source of information talking about it. This means my decade of blogging to LinkedIn’s algo, is totally meaningless.
YouTubers alone support 390,000 full-time jobs, The Washington Post reports, or four times the headcount of General Motors. And those kids have learned having a clickbait Title and video thumbnail (the more outrageous the better), is more important than having great quality content. I’m getting a bit upset just talking about this.
You do the Math
More GenZ want to be self-employed, freelancers and Creators, more than any other generation so far to hit the workforce. This means competition will increase exponentially, many of them using AI
The market for professional Creators is going to be super ageist.
The audience for a niche is likely to be extremely limited.
Monetization for Creators remains extremely tricky and you guessed it, like a gigantic grifter game.
A temporary high doesn’t mean you’ve made it in the Creator Economy. The boom or bust nature of the beast means even success is likely only temporary. Not to mention you are a slave to algorithms and non-existent promises of audiences that don’t actually exist.
YouTube Holds a Huge Carrot
For many in this day and age, of one single Video Monopoly in the world for all its Creators.
YouTube is the big leagues and the end-game for most Creators.
YouTube allows people to make it big, if they can build a niche.
Millions of people make money on YouTube, a leader of sorts, in a highly fragmented Creator Economy.
You have a better chance succeeding on OnlyFans than you do on most Creator platforms. The nature of the internet and consumption means that some of the worst medium and channels, actually do end up winning.
Creator Economy analysts often boost up the Venture Capital efforts, who have invested millions in this hoping it takes off. Here’s what they say:
The analysts expect the industry's “total addressable market,” an estimate of consumer demand, will jump from $250 billion this year to $480 billion by 2027.
I say, show me the money?
If I’m struggling and I’m a top 30-something in my rather large category, show me what success looks like? Making millions on the top 3, but that’s about it. So why do all of these things seem like pyramid schemes?
I’m grateful for having a place to call my own, to make enough money to put food on the table. But after two years of the sweatiest hustle, I’m wondering if I have a future here in this Creator Economy. I’m not getting any younger.
In 2023, of the 50 million and of those, there are roughly 46.7 million think themselves to be amateurs, with two million-plus considering themselves to be professional creators, earning enough from their passion to consider it their full-time income. Should I be celebrating that I’m almost a part of those 2+ million? Where is my mind?
The hype of the Creator Economy vs. the reality is pretty sad to be honest. The game of carrot has and always will be cringe.
In the Washing Post article though the experts say a lack of recognition and regulation means digital creators face challenges including uncertain income, few employee benefits and burnout from constant content creation. This obscures a significant part of the economy and “hurts us as a society,” one professor says, especially as creators continue to upend traditional industries like advertising. The mental health aspect of this is pretty much as bad or worse than any gig-economy worker.
Listen, I’m happy I’m paying somebody’s lunch fees at Substack. Where a lack of Ads integration reduce my total potential revenue by a factor of around 500%. If paid subscriptions worked in my vertical, I’d be the first to sing its praises. And I was working on a working assumption that they do - which I’m still not sure after over 100 weeks if it’s true.
Maybe I’m just not that original or a quality creator in the end. Maybe it’s all my fault. Maybe the Venture Capitalists are going to make millions on the suffering of would-be Creators even if we as individuals and communities are destined for failure. Maybe there’s this entire level of group-think that has been manufactured around the space.
But I’m tired of excuses, and all I see around me are grifters. To be honest, outside of YouTube, Instagram and Twitch, it’s a bit grim. Notably, half the professional creators (one million approximately) earn their money on YouTube, with 25% (500,000) making their money via Instagram (predominantly as influencers). Another sizable platform for professional creators is Twitch, with 300,000 professional streamers. Video is eating the world.
But I’m not alone in my predicament or my poverty.
According to a report from Linktree, only 12% of full-time creators earn more or around $50K a year, whereas 46% of creators earn less than $1K in annual revenue.
A lot of Creators have incentives not to be totally transparent at the state of their actual business.
Everyone Wants to be a Creator Until They Burnout
So as Creators explode with GenZ, and new internet users in places like India, Nigeria, Indonesia and so forth what exactly do we expect to happen to this gig economy?
I’m doing this to build my “personal media empire.” This is at the advice of Substack. If I never achieve a living wage or basic creator income to be able to keep doing this, what happens to me? What happens to these people who fail while taking the biggest risk of their lives? You don’t really hear the stories about those people.
How do those Part Time Creators Fare?
As per the Linktree data, part-time creators, only 3% boast annual revenues past $50K, with a staggering 68% earning less than $1K annually.
Way to go!
Anyone can make Web 3, or the Creator Economy or Generative A.I. as a whole seem good on the macro. But what do people in those fields actually report? How many of those startups, platform and small businesses will actually make it? We’ve been in a small business recession for quite some time already in 2023, does the media ever report on that?
Do you know how badly the crypto winter impacted the Creator Economy for real? Those shiny NFT platforms a16z invested in? Those Metaverse virtual theme parks? Those YouTube wannabes for the most part?
Creators are like the amateur entertainers and bards of the internet age. But how does society treats bards exactly? If you are not a celebrity, influencer or subject expert?
They don’t tell you how to grow income or diversify revenue, they teach you how to fail on a single platform.
But what happens if you don’t want to fail on a single platform, their platform?
Even the media folk around the Creator Economy feel like grifters. They post sad cliches on LinkedIn, for clicks. Cringe triumphs of a downtrodden industry. If only they knew.
Everyone with their grifty Newsletter. Only ready to pitch a PR angle for some lucrative angle. Calling it Web3 one day, and the Creator Economy the next, whatever works! Whatever is acceptable to the fad of the season.
It’s a Race to the Bottom
Creator burnout, sorry dude just another casualty of the “new internet”. Don’t have a compelling voice, tireless ability to create a community or original niche? You are out of luck.
Many amateur creators still make some income thanks to their creativity, just it isn't enough for them to give up their day job. Even a sizeable following on IG and YouTube don’t make enough money to live on.
So what are the chances that you will on a lesser or newer platform? Newsletters? They are everywhere. But where are the readers who are willing to pay?
Selling your Soul on Socials
People still like to hustle, especially Creatives. But what is the internet doing to those Creators?
Twitter no longer exists, TikTok might get banned and Facebook, well it still copies and clones everyone else. YouTube remains the only dominant long-form evergreen video native platform in the world. I have mad respect for people on Twitch, Bilibili or whatever else, but they don’t really count.
Every year, there are more Creators fighting over less real-estate, less eyeballs and the most outrageous niches. You can be a first-mover to a particular niche, until you are not. Try making a living in a niche, only to find people cut you out to those profits. Sounds pretty cutthroat eh?
An algo changes, you get shadowbanned on your best lead channel, your competitors outwork and outsmart you - then all the sum total of your work basically goes down the drain. Even your consistency of showing up and getting better at what you do, basically becomes irrelevant.
Then your competitors begin to use AI more than you do and you find they are able to do more with less.
What links do you click on?
A Creator has to be diversified across channels, not just across revenue sources. That’s a lot of work.
You think you can make it being just a single creative on one platform? Some kind of specialist? Maybe, but for how long?
When does the future arrive and a16z’s NFTs can save me?
What do we expect the Creator Economy to actually become?
Grifting an Algorithm
So to make it on this internet I have to beat some hypothetical ‘algorithm’.
My success is more dependent on me out-smarting algorithms than any other factor. This means collaborating, community building - all to gain momentum to convince an algorithm that I am worthy.
Is your work persuasive enough for an algorithm? Is your YouTube, is your Instagram? Is your Substack SEO?
Are you a Real Builder?
Do you make your dreams a reality?
Stripe says that as platforms add more monetization features and expand availability to all corners of the globe, the creator economy has a lot of room to run. Linktree and ConvertKit have similar shiny narratives. Don’t even get me started on Substack’s ideological marketing.
These brands want to make money off of you.
But you have to listen to your gut, is it worth it?
What are you giving up even to have a shot at making it?
a16z’s Andrew Chen might say that my attempts are an attempt at micro-entrepreneurship. Does having a minimal viable product give me the chance at having a miny salary as well? And how come you only read about the good stories?
And why are so many of the winners you see clearly grifters?
The future does not belong to creators, nor even the Creator platforms. It may belong to synthetic content and AI creators. As entertainment gets manufactured differently, the movies, videogames and people we watch, may not even be real soon. The developers of games may be AI itself. The voice actors, simply clones. The writers, just copies of the best aspects of a bunch of different voices.
AI could mean its game over for the Creator Economy too.