In my last post on the creator economy, we shared why we think this space is so exciting today and some of the factors fueling its rapid evolution. Creators are, for the first time, being empowered to eliminate the institutional constructs standing between them and consumers and share their content directly with those who want it. In this post, we’ll explore some of the trends defining what the creator economy will actually look like for this new group of enabled creators, and where we believe there’s opportunity for new solutions to emerge.

We have four core beliefs on what is characterizing the needs of creators today:

1. Creators are on more platforms than ever before.
2. Creators have more ways to make money than ever before.
3. Creators need to make more frequent and unique content than ever before.
4. Creators are facing more competition than ever before.

Let’s dive into what each of these means. But, before we do that, we’ll caveat by saying that the company logos we’ve included in this post are by no means exhaustive. This is a broad landscape with many innovative companies emerging, and here we’re simply trying to highlight a few of the ones we’ve seen.

Creators are everywhere

In the past, creators often gained their footing on one platform and for the most part, stuck to it. They would be titled as an “Instagram influencer” or a “YouTube creator” or a “Twitch streamer”. Now, changing consumer behavior and new economic opportunities are pressuring creators to be multi-platform.

As we discussed in my past post, Gen Z is core in shaping how creators share their content and engage with their audience. While they’re not the only relevant consumer group, as their buying, and influencing, power increases at an accelerated pace, creators are realizing the importance of focusing their attention on this population. It just so happens that this specific population is more fragmented than any other. 66% of Gen Z’ers use more than one device at a time¹, and Gen Z-ers have an average of 8.8 social media accounts, up 83% from 2014²! Clearly, share of mind is being spread broader over more and more mediums, and the pressure is on for creators to capture as much of this as possible. This means meeting consumers where they are, which is now more platforms than ever.

Alongside consumer fragmentation, unfavorable economic structures of incumbent platforms are also pressuring creators to balance multiple sites.

• For instance, Twitch takes a hefty 50% of subscription revenue and 19–29% of bit donations³
• OnlyFans takes a 20% cut on every transaction⁴
• YouTube takes 45% of ad revenue⁵, and 30% of tip revenue⁴
• Instagram takes 45% of ad revenue generated by creators on IGTV⁶

With platforms taking such high scrapes off the top, most creators are left unable to sustain themselves via one platform or revenue stream alone without large scale. While this has always been the case, now creators actually have other places to go, as hundreds of new creator platforms have emerged to help them monetize.

As proof, we can turn to real life examples. One of my favorite creators has an Instagram, Patreon, merch site, and blog, each of which I interact with differently. This is not atypical for creators of any size, as you can see from some of the profiles I’ve included below:

Example TikTok bios⁷:

Example Instagram bios & aggregated landing page⁷:

With this type of material fragmentation becoming more prevalent, creators are having a harder time understanding their audience, especially the interconnectivities between each channel. I view this problem similar to what retail brands faced over a decade ago with the rise of eCommerce and mobile apps. As they were pressured to sell via new and multiple channels, understanding their customers became more complex. In response, omnichannel solutions, CDPs, and analytics tools emerged to help brands provide a uniform experience to their customers on the frontend, while creating a holistic picture of them on the backend. We think there’s an opportunity for similar tools to solve for creator fragmentation. Purpose-built analytics layers, CDPs or CRMs, and content aggregators that help consolidate audience activity across platforms and revenue streams would provide a scalable way for creators to understand and engage with their fans. There’s a handful of companies beginning to attack this problem, and we’re excited to see how they, and new entrants, evolve.

Some we’ve seen include:

Money is everywhere

“Everywhere” is definitely an exaggeration, but monetization modes have evolved drastically so that creators can make money in new and in more ways than before. Traditional models of ad revenue and brand sponsorships, while fairly predictable based on subscriber count, were only attractive for top creators with large followings. This made way for new income streams to emerge to enable a broader base of creators to earn a living. Now, we’ve seen a rise in popularity for alternate avenues such as membership subscriptions, live engagements, digital goods, and tipping. Not only have many new startups surfaced to enable these types of transactions, but we’ve even seen incumbents try to play with tip-like features, such as YouTube’s Super Thanks, Twitter’s Tip Jar and Instagram’s Badges.

While this opportunity to earn more is unarguably positive, the drawback is that this income is less predictable. For instance, when an artist releases a new song, fans that like the song may give a tip to show their support. In this case, what’s motivating a consumer to donate is a positive emotional response to the content, not one of their unmet needs being fulfilled. This behavior is inherently hard to predict, as no one knows what piece of content will be the next big hit versus what will fall flat on its face. If we could predict it, why would anything bad ever be released?

Because cash flow is becoming more variable in nature, creators are often deemed as ‘high-risk’ from traditional financial institutions. These institutions don’t have the underwriting mechanisms in place to account for high unpredictability, leaving creators unable to access the financing and credit they need. We think there’s a large opportunity here for solutions to come in and help bridge the gap between traditional financial services and these non-traditional earners.

On the flip side, however, because there’s so many new modes of monetizing, there’s a larger available pool of money to be made. This has attracted and empowered a higher number of people, especially long tail creators, to make creation their primary income stream. With more individual revenue now flowing through this industry, there’s an opportunity for personal finance tools specifically for creators to come in and add value.

Some we’ve seen include:

Content is everywhere

Content has become commoditized as enterprise-grade tools made their way to the masses and the many applications like Canva or Garage Band made it possible for any individual to create from the comfort of their living room. Alongside this, mobile-native social media apps like Instagram and TikTok popularized on-the-go, high frequency content creation, facilitating the rise in the volume of content we see online today. Pretty much anyone who wants to put something online, can, and based on how much content is being produced, they are!

To stay relevant and keep up, creators are being pressured to produce content at a rapid pace. But it can’t be just any content. It has to be fresh and engaging to keep viewers coming back. To alleviate some of the creative burden, we think there’s appetite for tooling that fosters collaboration.

Parallel to the concept of open innovation for the enterprise, there’s an opportunity to invite more people to participate in the creative process. We’ve seen this being done via marketplace solutions that link creators to other creators, and via crowdsourcing mechanisms that open the door to fans to ideate what they want to see. This opportunity is still nascent, and there’s a lot of room for new winners to step up to the plate.

Some we’ve seen include:

Competition is everywhere

All of the trends mentioned above including more platforms, more money to be made, and more content online, have empowered more people to be creators. As a result, competition has intensified. With so much out there to pick from, the battle for consumer view time is at a peak. The good news is that with the new monetization models that exist, creators don’t need as many fans as they once did to sustain themselves but, they do need to deeply engage with the few loyal ones they do have in order to retain them.

To address this, we think there’s a real opportunity for better community building capabilities, specifically within curated or verticalized platforms, to enhance fan loyalty. We know that demand for niche communities is on the rise, as it’s something we’re seeing across platforms and industries:

• Discord, a platform specifically designed for creating communities and popular in the gaming space, has 140 million active users, double what they had at the end of 2019⁸
• Reddit boasts over 130,000 active communities, curated discussions receiving at least 5 comments from members, a day⁹
• TradingView, a social network for retail traders and investors, has over 30 million active monthly users and is the #1 traffic-ranked investing site in the world¹⁰
• When BiliBili launched, a Chinese video-sharing website focused on comics and gaming, they required aspiring members to pass a 100-question quiz just to ensure their dedication to the curated community¹¹ — and has reached over 220 million monthly active users even so!¹²

Vertical platforms focused on a specific topic or offering such as mentorship, music streaming, or gaming, are best suited to cultivate these niche communities because their user base is “pre-filtered”, in that they all share a specific interest. For creators this is advantageous because by linking a fan to other likeminded people, their loyalty towards the platform instantly multiplies, increasing their likelihood of being retained.

These platforms also provide an edge to creators in enabling better discovery. Given the consumers on these applications have a vetted interest in a specific vertical, they likely want to discover new talent in that space. This is especially beneficial for emerging creators who are having an increasingly difficult time being discovered on broad social media platforms where discovery suggestions are in large part influenced by creator popularity.

There are many promising platforms surfacing in this segment, and we think there’s room for multiple winners, but some we’ve seen include:

Overall, we believe there’s quite a few pockets of opportunity throughout the creator lifecycle, and we’re excited to see what winners emerge to forge the path ahead.

Disagree with our thoughts or know any companies we should be looking at? Let us know.

Sources

1. https://www.entrepreneur.com/article/334791
2. https://backlinko.com/social-media-users
3. https://agcpartners.com/wp-content/uploads/2021/06/AGC-Gaming-Jun-2021.pdf
4. https://www.theinformation.com/articles/ti-creator-economy-a-table-of-tipping-take-rates-cameo-gets-a-new-rival
5. https://fortune.com/longform/youtube-advertising-ads-revenues/
6. https://www.inputmag.com/culture/instagram-will-now-give-creators-a-55-percent-cut-of-its-ad-revenue
7. TikTok, Instagram — all screenshots were edited to remove any personally identifiable information
8. https://backlinko.com/discord-users
9. https://www.oberlo.com/blog/reddit-statistics
10. https://www.tradingview.com/features/
11. https://www.goldthread2.com/culture/gain-full-access-these-videos-you-must-pass-exam-100-very-niche-questions/article/2157030
12. https://www.chinainternetwatch.com/31131/bilibili-quarterly/