The Future of the Creator Economy: How Big Tech is Shaping the Landscape

Kazuki

Hatched by Kazuki

Sep 20, 2023

4 min read

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The Future of the Creator Economy: How Big Tech is Shaping the Landscape

In recent years, the creator economy has experienced exponential growth, with influencers and content creators gaining more power and recognition. Big tech companies, such as Facebook, Amazon, and Google, have taken notice and are making moves to capture a larger share of this lucrative market, estimated to be worth over $100 billion and growing.

One of the main reasons behind big tech's interest in the creator economy is the realization that creators hold the power. Influencers have been frustrated with platforms that receive a significant amount of traffic and engagement from their content but offer relatively little in terms of rewards. This power shift has prompted big tech companies to add features and tools that cater to the needs of content creators.

Facebook, for example, has seen a significant increase in the number of content creators earning substantial amounts of money from ads and fan support. The platform has introduced features like Stars, a native tipping system, which allows users to directly support their favorite creators. Facebook also plans to allow creators to charge for access to Live Audio Rooms and has launched an Audio Creator Fund to support emerging talent. By offering these monetization options, Facebook hopes to retain its labor force and prevent creators from migrating to other platforms.

Substack and Revue are two examples of platforms that have successfully integrated newsletters into the creator economy ecosystem. While the material profit from newsletters may not compare to advertising revenue, newsletters have become a flourishing part of the creator economy. Facebook seeks to tap into this market by further integrating newsletters into its platform.

Amazon, on the other hand, is utilizing livestreaming as a way for influencers to earn commissions through livestream sales. The company's Amazon Live Creator app allows influencers to engage with their audience in real-time and monetize their livestreams. Twitch, Amazon's game streaming service, has also seen significant growth in terms of hours streamed and viewed. To fuel subscription growth, Twitch recently launched tiered subscriptions that differ by country, taking into account local pricing.

Livestream shopping is expected to be a critical aspect of social commerce, and Amazon is actively expanding in this area. China's Taobao Live, for example, generated billions of dollars in sales within just half an hour. Amazon aims to capitalize on this trend and further grow its e-commerce sales through livestream shopping.

Microsoft's CEO, Satya Nadella, has also recognized the importance of the creator economy. In a statement back in 2016, he emphasized the company's focus on finding a balance between consumption and creative expression. Nadella believes that the next decade will be as much about creation as it is about consumption, and he sees this phenomenon becoming more democratized.

YouTube, owned by Google, remains one of the dominant platforms for content creators. With over a billion hours of video watched every day and an expected $30 billion in ad revenue for 2021, YouTube offers creators a massive reach and financial success. However, the platform does take a 30% cut of creators' earnings, which has sparked controversy. Some argue that this high platform fee hinders the growth of the creator economy and that a lower percentage would lead to even greater expansion.

Apple, another major player in the tech industry, has faced criticism for its 30% platform fee. Sahil Lavingia, the founder of Gumroad, believes that the creator economy would be much larger if Apple's fee was reduced to 3%. The high fee has been identified as a bottleneck to the growth of the creator economy.

Ultimately, big tech's foray into the creator economy is driven by its desire to retain users and prevent creators from flocking to other platforms. However, creators are recognizing the importance of being platform-agnostic and building their independent brands to avoid dependence on any one platform. This shift highlights the need for big tech companies to provide creators with the tools and features they need to thrive, while also ensuring fair compensation and lower platform fees.

In conclusion, the creator economy is undergoing rapid transformation, and big tech companies are playing a significant role in shaping its future. By recognizing the power of creators and implementing features that cater to their needs, these companies aim to capture a larger share of the market. However, creators themselves are becoming more platform-agnostic and independent, seeking to avoid dependence on any single platform. As the creator economy continues to evolve, it is essential for big tech companies to strike a balance between retaining users and empowering creators.

Actionable Advice:

  • 1. Embrace and support content creators: If you're a big tech company or platform, prioritize the needs and rewards of content creators. Offer features and tools that enable them to monetize their content effectively and build their brands.
  • 2. Consider lower platform fees: If you're a platform charging a high percentage of creators' earnings, reassess your fee structure. A lower platform fee can incentivize creators and contribute to the growth of the creator economy.
  • 3. Foster platform-agnosticism: Creators should also strive to become platform-agnostic and build their independent brands. By diversifying their presence across multiple platforms, creators can avoid over-dependence on any single platform and maintain control over their content and monetization.

By taking these actions, big tech companies and creators can work together to shape a thriving and sustainable creator economy.

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