What is the Creator Economy Becoming in 2022?

The Momentum is there for this being the main pillar of the future of the internet.

The Creator economy is a software-facilitated economy that allows creators to earn revenue from their creations. Today its often involved in social apps, in streaming, in gaming or even via DeFi decentralized architectures.

The Creator Economy manifests out of the evolution of influencer marketing as the Metaverse convergence takes place. Once creators are able to reach a substantial following in a specific niche and industry, more opportunities begin to present themselves in the form of brand deals, company collaborations and even the possibility of starting their own businesses.

Influencer Marketing is Evolving into a New Marketplace and Digital Economy

How much the Creator Economy will take place on decentralized distributed networks or VR, nobody really knows in 2022. A lot of Creators currently spend their time on the medium of Video like on YouTube, TikTok, Snap, Twitch, Bilibili and other such video based platforms.

The Creator market, which is combined with an influencer marketing industry size of $13.8 billion in 2021, and hundreds of new startups, brings the total Creator market to a size over $104.2 billion and is increasing daily. The TAM of the Creator Economy in the future of the Metaverse, gaming and creator ecosystems like Roblox will be very big and grow significantly in the 2020s.

The Creator Economy is Facilitated by the Evolution of the Personal Brand

Simply put, the more these creators partner with companies, get involved with marketing and become knowledgeable about business while maintaining a large following, the more I can personally see them shifting from working with businesses to creating their own.

But even the roots of influencer marketing will change as the Metaverse manifests. Many content creators create their own product lines, promoting their own services, brands and social media, resulting in a greater diversification in revenue streams and overall opportunities. Some create their own agencies or startups as a result of their career trajectory.

Many YouTube creators quit their day job to pursue their passion full-time. Even retail brands and mainstream businesses are starting to realize the efficacy and growth-mindset of many creators. Some content creators are being hired by companies as director of influencer marketing or head of the creative marketing department due to their creative mindsets and ability to connect with target audiences.

Creator Economy platforms like TikTok, YouTube, Substack and others continue to scale very quickly attracting new creators each week, and each year. YouTube and Snap have begun to share more of their advertising revenue with these creators pushing TikTok and others to do the same.

Just as media has gone behind paywalls successfully, Creators are beginning to truly monetize their thought leadership, vibe and creativity on social platforms. But as new media is evolving, from short videos to Ed-Tech, from gaming to new connected decentralized worlds, the role of the creators in those ecosystems continues to evolve.

The Creator Economy Scales with How Creators Monetize Their Content via Subscriptions

If Instagram is the old world and YouTube is still immature in the Creator Economy, what will tomorrow bring? Today being a Creator in the Creator Economy is a new job description. The Creator Economy is a class of businesses built by more than 50 million content creators, curators, social media influencers, bloggers, and videographers that use social media, platforms and finance tools to assist them with their growth and monetization. But soon that will be 500 million creators.

This is because young people will push its growth, just as a new kind of freelancer, a hybrid content creators in the future of platforms. Young people are more attracted to alternative routes in doing business and monetization on the internet, they aren’t just digital natives, they are Creator Economy natives and it shows. Young people who grew up with platforms like YouTube, TikTok and Snap understand how important the Creator Economy is and can become.

Many Creator platforms like Substack, scale their businesses via subscriptions. But Creators typically have multiple ways to monetize including advertising revenue, sponsorships, being brand ambassadors and so forth. Because of this, they can focus on what’s important to them and be authentic in their relationship to their core audience. Whether this is on Instagram, YouTube, TikTok or Snap - that has already been going on for years.

Creators Work with Brands to Monetize the Best

Creators' main source of income is brand deals (31%), followed in second place by their own brand/business (25%) and creator funds (15%). In the Summer of 2021, believe it or not, the total size of the creator economy is estimated to be a little over $100 billion dollars. YouTube alone expects a $30 billion stream of revenue at the end of 2021. In 2022, it’s already well over $120 billion.

The arrival of COVID-19 in early 2020 threatened to derail this process but instead has strengthened it. A combination of lockdowns and worsened unemployment has sent creators searching for new ways to earn a living while at the same time giving people more time to hunt for content, looking for ways to fill in their increased leisure hours. 

The more these creators partner with companies, get involved with marketing and become knowledgeable about business while maintaining a large following, the more I can personally see them shifting from working with businesses to creating their own. This process of empowering through various stages of success means the Creator Economy becomes the ultimate dream of the internet, from game makers on Roblox to TikTok Influencers who struck it big. They in a sense, define a generation.

In contrast with ad-based arrangements, creators can get paid by their individual viewers, who might buy subscriptions, send tips, or crowdfund new projects.

The Creator Economy is the Real Metaverse

With DeFi, the Metaverse and mega-advertising companies like ByteDance (the owner of TikTok) evolving, the Metaverse can drive the growth of the Creator Economy in substantial ways not even fully realized or conceptualized in the early days of 2022.

In the evolution of the digital tribe, Creators also develop a relationship with their audience whereby an audience organically supports the Creator’s energy. What drives users to support creators: (1) they try to support them in any circumstances, (2) they feel inspired by the creator, (3) they trust (almost) everything they advertise. So clearly this is also about attachment, sentiment and investment into following a particular creator. There is a digital audience-creator pair bonding if you will.

While the Creator Economy was born from influencer marketing on social media, the way it scales outgrows both of those dynamics. People online develop personal brands that can transcend their roots. This is counter-intuitive for typically business models and for competing ecosystems for attention and mindshare and ultimately advertising revenue. The best creator ecosystems empower the creators themselves giving a snowball effect.

While they may have incredible algorithms and recommendation engines like TikTok and YouTube, they allow Creators to flourish both in followers and financially. Social media platforms that don’t follow the strategy of the Creator Economy are likely to become obsolete in just a few years time as of 2022.

Think about it, Creators also come from a raw place. That place is passion. The creator economy is a subset of the passion economy. This is because creators are usually people who can now earn an income from doing something they feel passionate about. It may have just begun as a hobby, and it would probably have remained that in the past. But nowadays, many passionate creators have found a way to make their hobby viable enough to earn at least a steady income.

The early 2022 hype around NFTs has also created yet a new business model for the Creator Economy, and there will be many more in the years to come. There are over 6 billion people who use a smartphone device, according to Statista, and almost 4 billion of them are active on a social media platform. As we build and explore the Metaverse, it will finally also become the same.

The Creator Economy is a New Media Based on Tips, Crowdsourcing Community, Decentralization and Subscriptions

When journalists decided to go behind paywall subscriptions, their writers become members of the Creator Economy. When some of those brave journalists created Substack accounts, they decided to augment and rely on the strength of their reputation and personal brand as the pivot of their writing. Some of them were able to build massive Newsletter followings even simply as a writer or journalist.

Whether your Medium is video, DIY videos, podcasting, educational courses, writing, NFTs or trading in crypto, you are experiencing and participating in the Creator Economy. I write Polls on LinkedIn sometimes, even this too is a kind of Creator Marketplace interaction. The key demographic of the Creator Economy however, are those who have learned how to monetize their activity. They are attracted to platforms of scale where they can increase their sales and following rapidly.

The Creator Economy is the culmination of user-generated-content (UGC) something I have followed since the 90s. We would have never imagined something in the early days of Facebook or Twitter, what young people could do and their reach on TikTok just ten or fifteen years later. Just as today, we can barely imagine what the Creator Economy will be in 2030 or 2035.

Thanks for reading! The premium version of this Newsletter is filled with tips for substack writers specifically.