The rise of creator economy and the explosion of investment
For decades media outlets have dominated entertainment and news feeds but in the last decade a seismic shift has been taking place. The rise of social and video streaming platforms has created a captive audience of those seeking to be entertained and informed. This has shifted the media market from being a one-to-many model whereby a few publishers create content for the many, to a many-to-many model were hundreds of millions of shows and pieces of content are being created by individuals to cater to billions of people. The has given rise to the content creator economy which has seen an explosion of investment over the past 12 months with $1.3billion ploughed into platform investment and social platforms themselves making major plays into the creator economy.
The who, what and why of the creator economy
The creator economy is a term that describes the class of businesses built by over 50 million independent content creators, curators, and community builders including social media influencers, bloggers, and videographers, plus the software and finance tools designed to help them with growth and monetization.
Today these 50million creators globally comprise of 2million+ professional individual creators making content full-time and 46.7million amateur individual creators monetizing content creation part-time. Broadly speaking, there are four main types of creators, bloggers or vloggers, entertainers, guides/experts and existing celebrities.
Creators are using an array of platforms to publish and distribute their content. From YouTube to Instagram, Snapchat, Twitch, TikTok, Substack, Patreon, and OnlyFans there is no shortage of platforms out there enabling creators to reach a niche audience and distribute their content. And they are afforded an array of options and avenues to monetise their content from fan clubs to VIP meet ups, digital content subscriptions, shout outs and more.
While Instagram and Instagram Stories remain the most popular social platforms for creator campaigns, TikTok has forced marketers to rethink their approach for finding and engaging with consumers. About 96% of brands and 88% of influencers reported regularly using Instagram Stories, while 46% of brands and 42% of influencers said they regularly use TikTok.
How platforms are doubling down on the creator economy
As the creator economy grows, social media platforms are heavily investing in features and technology that enables creators to create high-quality content, reach the right audiences and monetise their products.
To enable creators to better monetise their audiences, TikTok has launched a Creator Next program which includes tipping and gifting to enable audiences to give back to those who content they enjoy as well as a creator marketplace to connect brands to creators. The channel also has its $200 million creator fund, which launched in the U.S. in 2020 with a growth trajectory of reaching $1 billion by the end 2023. TikTok’s creator fund, per influencers, is accessible as it is open to creators who have a comparatively smaller follower size (at least 10,000 followers and 100,000 video views within a 30-day period).
As the race intensifies, Instagram has further invested in more tools and features for creators to monetise their content and audiences over the last year. Some of those initiatives include Instagram Reels Play Bonus Program which allows creators to earn money based on the performance of their Reel. The payout is calculated by the number of views a creator gets on their reels over the course of a 30-day period in the program. The platform has also introduced Instagram Live Badges, where users can send monetary tips during a livestream as well as shops for creators to sell directly to fans, in-stream video ads, branded content, affiliate programs and bonuses. Last year, CEO Mark Zuckerberg announced that by the end of 2022, Facebook and Instagram plan to invest more than $1 billion in creator monetization programs meaning there will be further opportunities for creators to monetise their audiences looking ahead.
Previously YouTube has offered revenue streams to creators through ad revenue from video advertising and their partner program where creators are paid for the number of views on a video. More recently however YouTube, like others has introduced its own creator fund called the YouTube Shorts Fund, dedicating $100 million to creators over the course of 2021 and 2022.
YouTube as well as Twitch have also started to build infrastructure for their creators to charge a subscription fee directly on their channels.
All these investments are leading to a rise in C2C commerce – enabling consumers to increasingly buy direct from creators whether that be content or products, without having to leave a platform.
For example; Meta is testing a new livestreaming platform for influencers called “Super”. The new platform enables influencers to host livestreams, earn revenue and engage with viewers. The platform, which looks to have similar functionality to Twitch, is currently being tested with fewer than 100 creators, including tech influencer Andru Edwards and TikTok star Vienna Skye.
How brands are collaborating with creators are leveraging the creator economy
In 2021, IKEA partnered with an array of creators – DJs, artists and other creators to launch a 24 hour festival which aimed to celebrate, and engage viewers around life at home. From concerts in intimate settings to being able to tune into chefs in their home kitchens – the festival enabled viewers to tour over 100 homes globally. It is one of many brands that is now thinking more strategically about how to tap into the opportunities that the creator economy affords and demonstrates the true opportunity and potential beyond simply sponsoring content and product placement.
As audiences’ fragment and the power shifts to the creator, brands need to consider;
The role of the content creators in their strategy to reach core audiences
How to best leverage the talents of content creators that they seek to partner with for mutual benefit and
The need to move beyond tactical executions to more strategic partnerships if they are to benefit from the opportunity the creator economy has presented
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