The Shaping of the Creator Economy: From Big Tech to Independent Brands

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Jul 11, 2023
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The Shaping of the Creator Economy: From Big Tech to Independent Brands
In recent years, the creator economy has been on the rise, with influencers and content creators gaining more recognition and influence. These creators have become frustrated with big media platforms that reap the benefits of their high-traffic content while providing relatively scant rewards. As a result, big tech companies are now making efforts to capture a bigger slice of this $104 billion and growing market.
Facebook, for example, has recognized the shift in power from platforms to creators. The number of content creators on Facebook earning $10,000 a month from ads and fan support grew by 88% from 2019 to 2020, and the number of creators earning $1,000 per month nearly doubled over the same timeframe. To further support creators, Facebook has implemented features such as Stars, a native tipping system, and plans to allow creators to charge for one-time or recurring access to Live Audio Rooms. Facebook is also looking to integrate newsletters into its platform, following the flourishing trend of newsletters in the creator economy ecosystem.
Similarly, Amazon has made moves to tap into the creator economy. Its Amazon Live Creator app allows influencers to livestream and earn commissions through livestream sales. Twitch, Amazon's game streaming service, has also seen significant growth in creator activity. In Q3'20, creators streamed 206 million hours, nearly double year-over-year, and users viewed 4.7 billion hours of video on Twitch. Twitch generates the majority of its revenue from subscriptions, but it is reportedly looking to increase its ad revenue. Livestream shopping is another critical aspect of social commerce that Amazon is exploring, as demonstrated by the success of Taobao Live, which reaped $7.5 billion in the first half-hour of presales for China's annual shopping festival.
Microsoft has also recognized the importance of the creator economy. CEO Satya Nadella has emphasized the balance between consumption and creative expression. He sees the next 10 years as being just as much about creation as it is about consumption and believes that the phenomenon will become much more democratized. Microsoft's Minecraft, in particular, has inspired a generation of creators who see themselves as not just players of a game but creators of a world they dream up.
YouTube, one of the pioneers of the creator economy, continues to dominate the market. More than 500 hours of content are uploaded every minute, and more than a billion hours of video are watched every day on the platform. YouTube expects to generate $30 billion in ad revenue in 2021. While YouTube takes a 30% cut from creators' ad revenue, other infrastructure platforms, such as Stripe, take a smaller percentage. The controversy surrounding platform fees has led to discussions about their impact on the creator economy's growth, with some suggesting that reducing fees could lead to a 10x increase in the size of the creator economy.
The shift of big tech into the creator economy is driven by the desire to retain users. By offering features and services that cater to creators, these platforms hope to keep creators on their own platforms. However, creators are increasingly favoring platform-agnostic approaches, aiming to become independent brands and reduce dependence on any one platform.
In conclusion, the creator economy is being shaped by big tech companies that are recognizing the power and influence of content creators. Facebook, Amazon, Microsoft, and YouTube are all making efforts to support and retain creators on their platforms. However, creators themselves are seeking independence and platform-agnostic approaches to ensure their long-term success. As the creator economy continues to evolve, it is important for both creators and platforms to find a balance that benefits all parties involved.
Actionable Advice:
- 1. Diversify your platform presence: While it may be tempting to focus solely on one platform, it is important to establish a presence on multiple platforms to reduce dependence and reach a wider audience.
- 2. Explore alternative revenue streams: Relying solely on ads may not be sufficient for long-term success. Consider other monetization options such as sponsorships, merchandise sales, or paid memberships to diversify your income sources.
- 3. Advocate for fair platform fees: Engage in conversations and discussions about platform fees to ensure that they are reasonable and conducive to the growth of the creator economy. Lobby for lower fees that allow creators to thrive and maximize their earnings.
In the ever-evolving landscape of the creator economy, it is essential for creators to adapt and stay ahead of the curve. By leveraging the opportunities provided by big tech platforms while also pursuing independence and brand-building, creators can establish themselves as influential figures in this rapidly growing industry.
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