The $100B+ Creator Economy: How Big Tech is Shaping the Future

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Sep 07, 2023

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The $100B+ Creator Economy: How Big Tech is Shaping the Future

In recent years, influencers have become increasingly frustrated with the lack of rewards they receive from big media platforms despite generating high traffic and engagement. However, big tech giants are now realizing the potential of the creator economy, estimated to be worth over $104 billion and growing. They are making efforts to capture a larger share of this market before losing their labor force to other platforms.

Facebook, for example, has seen a significant increase in the number of content creators earning substantial amounts from ads and fan support. From 2019 to 2020, the number of creators earning $10,000 a month grew by 88%, while those earning $1,000 a month nearly doubled. To further monetize their platform, Facebook introduced Stars, a native tipping system that allows users to tip creators. Additionally, they plan to enable creators to charge for access to Live Audio Rooms and have launched an Audio Creator Fund to support emerging creators. Facebook's integration into the newsletter space, which is another thriving part of the creator economy, shows their commitment to expanding their reach.

Amazon, on the other hand, has been focusing on livestreaming as a way to empower influencers and generate revenue. Their Amazon Live Creator app enables influencers to earn commissions through livestream sales. While Amazon Live has seen success, their game streaming service Twitch holds even more potential. In Q3'20 alone, creators streamed 206 million hours, almost double the previous year, and users viewed 4.7 billion hours of video on Twitch. Twitch currently relies heavily on subscriptions for revenue but aims to increase its ad revenue by offering tiered subscriptions with localized pricing.

Livestream shopping is an emerging trend in social commerce, and Amazon aims to leverage its success in this area. Taobao Live, a livestreaming platform owned by Alibaba's Taobao, generated $7.5 billion in the first half-hour of presales for China's Singles' Day shopping festival. The trend is projected to account for up to 20% of total e-commerce sales by next year. Amazon's foray into livestream shopping demonstrates their commitment to innovation and staying ahead in the creator economy.

Microsoft, under the leadership of CEO Satya Nadella, has also recognized the importance of the creator economy. Nadella has emphasized the balance between consumption and creative expression, highlighting the significance of creators in shaping the future. Microsoft's Minecraft, a game that encourages creativity and world-building, has been a testament to this vision. Nadella sees the next decade as being about creation and community, with a democratization of the creative process.

YouTube, one of the largest platforms for creators, acknowledges the competitive landscape but believes that offering the most reach and financial success will attract creators. With over a billion hours of video watched daily, YouTube is expected to generate $30 billion in ad revenue in 2021. However, the platform fee, which takes a 30% cut from creators' earnings, has been a point of contention. Gumroad founder Sahil Lavingia, for instance, argues that the creator economy would be much larger if Apple's fee was lower than 30%. This highlights the importance of fair pricing models for creators to thrive.

Ultimately, big tech's entrance into the creator economy is driven by the desire to retain users. By providing products and services that cater to creators' needs, these tech giants hope to keep creators within their platforms. However, creators are increasingly looking to become platform-agnostic and establish themselves as independent brands to reduce dependence on any single platform.

In light of these developments, here are three actionable pieces of advice for creators navigating the evolving landscape of the creator economy:

  • 1. Diversify Your Platform Presence: While big tech platforms offer significant reach, it's important for creators to establish a presence on multiple platforms to reduce reliance on any one platform. This ensures that your content reaches a wider audience and minimizes the risk of losing your labor force due to platform changes or limitations.
  • 2. Embrace New Monetization Opportunities: Stay informed about the latest monetization features and tools offered by platforms. From native tipping systems to livestream sales and subscription models, explore different avenues to generate income from your content. Be proactive in adapting to changes and experimenting with new opportunities.
  • 3. Prioritize Learning and Curiosity: As a creator, focus on your personal learning journey and share your insights and discoveries with your audience. Engage in conversations around your content to foster a deeper understanding and inspire others. Use tools that facilitate a more active learning process, such as public and private highlighting platforms, to enhance your knowledge retention and engagement.

In conclusion, the creator economy is undergoing significant transformations as big tech giants recognize its potential and aim to capture a larger share of the market. By empowering creators and offering new monetization opportunities, these platforms seek to retain users and drive innovation. Creators, however, should strive for platform-agnosticism and prioritize their own learning and curiosity to thrive in this evolving landscape. By diversifying their platform presence, embracing new monetization opportunities, and fostering a culture of learning and sharing, creators can navigate the creator economy successfully.

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