3 Hard Truths About the Creator Economy
3 Hard Truths About the Creator Economy
It’s not all fun, games, and $69 million GIFs
It’s not all fun, games, and $69 million GIFs
The creator economy is steadily gaining steam, with platforms from Substack to BitClout to Quora scrambling to retain the best content creators, and often offering them huge incentives. As Alex Kantrowitz recently pointed out in OneZero, it’s a fantastic time to be a talented creator. Platforms are finally seeing the value of creators' content, and they can’t get enough of it.
It’s not all fun, games, and whimsical $69 million GIFs, though. The growth of the creator economy reveals some hard truths — realities and challenges which say a lot about the past and future of the creator economy itself, and can greatly impact individual creators’ revenue streams, and thus their livelihoods.
Here are three hard truths of the emerging creator economy. If you’re a creator (or want to become one), you need to know about them.
Creators Should Have Been Paid All Along
If you’re a creator, platforms have been quietly stealing from you for years. You probably didn’t realize they were doing it. Maybe you even thought they were providing you with a valuable service, when really you were the one providing value all along.
As the Economist points out in a recent article about the creator economy, the traditional social media business model went something like this: A platform like Facebook would lure creators to its service with the promise of a big audience. The creators would make fantastic videos, shoot beautiful photos, and produce insightful, detailed written posts, all of which they’d put on the platform for free.
This great content would attract tons of users. The platform would show ads to those users, generating massive amounts of revenue. Because they paid nothing for their content and their services cost relatively little to operate, the platforms’ investors would get absurd profits out of all this revenue, and creators — who uploaded their content for free — would get the shaft.
Over the last two years, the Economist says, creators have wised up to how bad this business model is for their own livelihoods. A new breed of platforms have emerged--ones likes Medium, Substack, TikTok, Patreon, and even the risqué Only Fans — which allow creators to share in the value they create from their content, or monetize their audiences directly through subscriptions.
Unsurprisingly, creators are flocking to these new platforms in droves, and older platforms are scrambling to keep up. Facebook just launched Bulletins, a clone of Substack, and pledged to deliver $1 billion in value back to creators by 2022. Quora, a platform built on content from experts who answered questions for free, recently announced that it would begin paying select creators for their contributions.
I think this is great. It puts the power back into the hands of creators, and fairly compensates them for the often extremely lucrative content that they make. When revenue-share business models meet the massive reach of traditional platforms like Facebook and Quora, creators win. YouTube has shared revenues with creators for years, and it’s one of the biggest platforms in the world, which suggests that the model is viable.
Still, these recent moves reveal a hard truth; platforms (especially social media platforms) should have been paying creators all along, and many are only doing it now because newer platforms came along and threatened to eat their free lunch. It’s a positive change, but one that’s long overdue.
If you’re a long-time creator who provided a bunch of free content to a big platform, you’re probably realizing now how much value you gave away for no compensation. If that describes you, consider switching from your legacy platform to one that offers monetization (and taking your back catalog of content with you). And if you’re a new creator, make sure to work with platforms which compensate you fairly.
Creators Often Hate on Influencers
I recently published a long article about the creator economy and my work as a video creator. One of the first comments I got on the article said essentially “Cool article, but you’re not a creator. You’re an influencer. Ergo, you suck.” It’s an attitude I’ve been borne out elsewhere, where people who see themselves as “pure” creators (generally, those who don’t monetize their content by selling products) hate on people who create product-centered or brand-centered videos, photos or social media posts.
That attitude is unfortunate and often destructive. Just because a creator’s content is good at driving product sales, that’s no reason to look down on them. Making great unboxing videos, makeup tutorials, product review videos, recipe demos and the like is hard and requires just as much creative energy as taking a great photo or writing a great song. I know, because I do both.
Yes, there are surely influencers out there who get by on fame alone, peddling celebrity status or a famous name to sell crappy products. But the vast majority of product-centered creators that I’ve met are creative, smart, hard working people who are great at engaging their audiences, and who provide their followers with valuable information. If they weren’t providing value to their audience, no one would view their content. But in many cases, these creator/influencers amass audiences in the thousands or millions.
Creators need to realize that being an influencer and promoting (or reviewing) products is just one of the rapidly growing, increasingly diverse ways to monetize creative content. Creators should be building each other up and learning from each other, not tearing each other down and creating false divisions based on differing monetization strategies. Sometimes, I think there’s also an element of sour grapes — monetizing product-centered content is often easier than monetizing songs, photos, or non-product videos, and that can irk certain “pure” creators.
Animosity towards influencers is a hard truth of the creator economy. And it needs to stop. A rising tide floats all ships. If your fellow creator makes money through product sales (and as long as they’re disclosing that properly), their success is good for the creator economy and ultimately good for you. The distinction between influencers and non-influencers is a simple matter of monetization strategies, not a difference in a creator’s level of commitment or the quality of their content.
Platforms Are Still Figuring Out the Business Model
This is one of the most challenging aspects of being a creator today. The creator economy is so new that many platforms are still figuring out their business models. They know that there’s some model in which they collect revenue from advertisers/subscribers/buyers, share a portion of it with the creators who deliver them quality content, and remain wildly profitable. But exactly how to do that--or even how to judge what’s valuable? They’re still working on that part.
The creator economy is also like a bloody, bare-knuckled brawl right now. Every platform is desperately fighting to lock in market share and attract creators, and they’re often throwing around huge bags of venture capital money to accomplish this. This results in lots of situations where platforms offer creators fantastically lucrative, impossible to sustain terms, which they later modify or roll back.
It’s great that Substack paid selected journalists $250,000 to come to their platform. But that doesn’t mean they can do that with every great new writer, nor does it mean that those who join the platform in exchange for massive sums of money will keep making those sums long term. On a smaller scale, if a platform promises you great monetization terms today, there’s no guarantee those same terms will apply tomorrow.
The fact that platforms are in constant flux--and that they’re battling each other for talent--can create a lot of volatility for creators. Just when you’ve mastered the requirements of a specific platform and are making good money, those requirements might change, or the platform might disappear entirely. That can make it hard to earn a consistent income as a creator.
There’s a few strategies you can take to address this. Firstly, it’s okay to go where the money is, and to try out new platforms which are offering too-good-to-be-true terms. But realize that the platform’s money fountain is probably temporary, and prepare in advance for the moment it switches off.
When you sign up for a new platform, make sure you retain ownership of all your content. Check the platform’s contributor agreement, or review it with your lawyer if you have one. Keep your own backups of your content, so if the platform goes belly-up, you can move it elsewhere. I rarely use platforms' own text editors, for example. I’ll write articles or posts in a Google Doc, and then paste them into the platform. That way, if a platform disappears (or they change their terms in a way that I don’t like), I have my own copy of all my content and can easily migrate it wherever I want.
With brand new platforms, think about ways to double or triple dip, sharing your content in multiple places at once. YouTube is one of the more established, stable monetized platforms. I run a successful YouTube channel, but I wanted to experiment with TikTok. So I doubled-dipped, creating TikTok videos but also exporting them and posting them on my YouTube channel.
If TikTok works out for me, that’s great. But even if it doesn’t, I’ll still have created lots of new content which I can monetize on my YouTube channel, because I double-dipped. Sharing content in multiple places reduces the risk of trying out a new platform, because even if the new platform isn’t a fit for you, you’ll still get value from the content you created there by cross-posting it to a more stable, monetized platform. Most platforms are totally fine with double-dipping.
Hard truth: the creator economy is new, and like any new economy, it’s volatile. If you’re creating valuable content, though, you’ll find a way to monetize it--even if that means shuffling it around between lots of different platforms before you find a fit.
The creator economy opens up huge possibilities for people who make great content. But it also comes with some hard truths. Platforms have been getting a free ride for too long, at the expense of creators. Creators themselves can be too quick to tear each other down. And even if you do succeed in this new economy, your earnings may be volatile and unpredictable.
Is that a reason to opt out of being a creator? No way. Creators should be aware of these hard truths. But none of these truths is a reason to pivot away from content creation. You might need to develop a thick skin (or an ability to laugh all the way to the bank) if you’re an influencer, you might need to migrate away from an unpaid legacy platform, and you might need insane amounts of flexibility to deal with the volatility of new platforms.
But if you can face down these hard truths and muster the perseverance to keep making content you love despite the challenges, there’s never been a better time to be a creator.