The New Age For Creators
When the Internet began, many media pundits predicted that it would fail. Stephen Weiswasserm a senior VP at ABC, stated the following: ‘The internet will be the CB radio of the ’90s, You aren’t going to turn passive consumers into active trollers on the internet”
One of the main reasons for doubting the web at the time was that nobody could imagine companies would create online content, especially since there was no revenue to be made. What everyone missed, however, was that companies would not be the creators of online content, instead, billions of people would be creating content.
Today, the number of content uploaded daily via videos, music, photos, text, etc… is astronomical. People have found ways to build virtual identities, brands, and gain celebrity status. From bloggers to YouTubers to micro-content creators (Instagram/TikTok) to influencers, The social media era of the internet has provided a foundation for an online creator economy.
The State of the (Creator) Economy
Is there a viable creator economy today? yes and no.
Some people, mainly influencers, make considerable sums of money. The large majority of people, however, make very little. They struggle to gain enough of a dedicated following to achieve economies of scale. Only the top 3% of YouTube creators yield more than $17,000 per annum in advertising revenue, and to do that, you need to average 1.4 million views per month.
The creator platforms with the most exposure have a ridiculous take rate. Apple takes 30% of what is sold in the app store, YouTube takes 50%, and Instagram, Twitter and Facebook take 100%.
The biggest challenge for creators on these platforms is the layer of algorithmic feeds and ads that separate them from their fan base. Many YouTube creators have complained that the rules keep changing, making it difficult to rank.
Big tech are the superintendents of the web2 internet economy.
However, not all is bad with web 2.0. Social media is making it possible for creators to build communities of followers. New creator platforms are making it easy for users to build online courses, podcasts, music, etc… platforms like Patreon are providing direct-to-creator economic engagement.
Here are some notable highlights from The Creator Earnings Benchmark report via Influencermarketinghub.com
- $800 million in venture capital has been invested into Creator Economy startups since October 2020.
- 46% of Creators who have been building an audience for 4+ years earn over $20k annually across their monetized channels.
- We estimate the total Creator Economy market size to be around $104.2 Billion and on par with a substantial growth trajectory similar to the Gig Economy. That’s a future valuation of TRILLIONS of dollars.
- 72% of Creators prefer Instagram and identify it as their primary content platform.
- Of the surveyed Creators that considered themselves full time Creators, ie. content creation is their main source of income — 78% make more than $23,500 annually.
- The power of sponsorships should not be underestimated. 77% of Creators depend on brand deals, that’s 3x as many as every other revenue source combined.
- There is not a definite correlation between follower count and income. Between the $50–100k and $500k-1M reported income levels from creating content, there is half a million dollars in income difference, but a difference of only 1.8K more followers.
for the full report — https://influencermarketinghub.com/creator-earnings-benchmark-report/
Creators in a Web3 world
While web2 provides creators with platforms of creation and distribution, emerging internet technologies will pivot the web towards a user-centric model and away from centralized walled gardens.
Web3 can be categorized as a move towards decentralization, personal ownership, and crypto technology. The objective is to provide an open interaction of data via peer-to-peer networks without a need for third parties.
The currency for web3 will be Tokens, fungible (ex: Bitcoin,) or non-fungible (NFTs). The trustworthy means of transactions will be on the blockchain, and the railroad system, via networks, will be open.
What does this mean for creators?
For the first time, creators of digital assets can accurately price and distribute their work, and consumers can purchase and own a digital asset. NFTs make it possible to put a price tag on anything digital, which drives new economic value.
For example, musicians often make money through merchandise, and NFTs can serve as a kind of digital merchandise for musicians. Like the gaming industry monetizes virtual goods related to a game, musicians or artists, in general, can also do the same with their music.
Last year, Bob Dylan sold his complete songwriting catalog to Universal studios for 300 million and Stevie Nix sold hers for 80 million to Primary Wave Music. But what if Bob Dylan sold his music as NFTs in the public marketplace? in the form of a DAO where all his fans can contribute to owning a piece of a song. Dylan could have earned additional compensation from secondary sales or royalty fees for any music that is sold in the future — his future family generations would continue to profit from resales.
Of course, marketplaces will still be required, but selling virtual goods on OpenSea has a more reasonable take rate of only 2.5%. Understanding the tax costs and energy transactions are issues to be resolved for creators, but this is at least the start of a real ownership-driven economy.
New tools and platforms will be built on web3 that will allow creators to not only manage their content but also manage their network of fans across any service or platform.
Web3 Startups will be centered around empowering creators to seamlessly monetize and provide innovative forms of engagement with their audience.
In Conclusion
Today’s web offers a great foundation for creators to build businesses and create communities of followers, but there are challenges with monetization and a sustainable economic model. As the web moves towards a user-centric, decentralized, and ownership-driven world, it will become increasingly more creator-friendly.
