How The $100B+ Creator Economy Is Going To Be Shaped By Big Tech - CB Insights Research

How The $100B+ Creator Economy Is Going To Be Shaped By Big Tech - CB Insights Research

The rise of the creator economy has been a game-changer for content creators, who have long felt that big media platforms were reaping the rewards of their high-traffic content while offering them relatively little in return. However, big tech giants are now realizing the importance of supporting and retaining these creators, as they understand that losing their labor force could have dire consequences. As a result, they are making strategic moves to capture a bigger slice of the estimated $104 billion and growing market.

One such platform is Facebook, which has been actively working on ways to reward content creators. The number of creators on Facebook earning significant amounts of money has been steadily increasing. In fact, from 2019 to 2020, the number of creators earning $10,000 a month from ads and fan support grew by 88%, while the number of creators earning $1,000 per month nearly doubled. To further incentivize creators, Facebook has introduced features such as Stars, its native tipping system, which allows users to tip creators. Additionally, Facebook plans to allow creators to charge for one-time or recurring access to Live Audio Rooms and has launched an Audio Creator Fund to support emerging creators. By integrating these features, Facebook aims to become a more attractive platform for content creators.

Another platform making waves in the creator economy is Substack, a newsletter platform that allows creators to monetize their content. Substack takes a 10% cut of creators' earnings, and it has seen significant success in recent years. Newsletters have become a flourishing part of the creator economy ecosystem, and Facebook recognizes the potential in this space. As a result, it is looking to integrate newsletters into its platform, further expanding its reach and offerings for creators.

Amazon, too, has been making moves to tap into the creator economy. Its Amazon Live Creator app allows influencers to livestream and earn commissions through livestream sales. While Amazon Live may not be as well-known as platforms like YouTube, it has found significant success in the livestream shopping realm. For example, Taobao Live, Taobao's livestreaming platform, generated a whopping $7.5 billion in the first half hour of presales for China's annual shopping festival. Amazon hopes to replicate this success and expand its presence in the livestream shopping space.

Twitch, Amazon's game streaming service, also plays a crucial role in the creator economy. Creators have flocked to Twitch, with its user base streaming 206 million hours in Q3'20, nearly double the previous year. While Twitch currently derives the majority of its revenue from subscriptions, it is looking to increase its ad revenue. To fuel subscription growth, the platform recently launched tiered subscriptions that differ by country to account for local pricing. This pricing model could potentially attract more creators and subscribers, further solidifying Twitch's position in the creator economy.

YouTube, one of the pioneers in the creator economy, remains a dominant player in the space. With over a billion hours of video watched every day and more than 500 hours of content uploaded every minute, YouTube is a powerhouse for content creators. The platform is expected to generate $30 billion in ad revenue in 2021. However, YouTube's platform fee has been a point of contention for creators, as it takes a 30% cut of their earnings. Some argue that this fee is too high and hinders the growth of the creator economy. For comparison, other infrastructure platforms like Stripe only take a 3% cut from retailers using their payments processing platform. This discrepancy highlights the need for platforms to reevaluate their fees and create a more favorable environment for creators.

The shift of big tech into the creator economy is driven by the desire to retain users. By offering more opportunities for creators to monetize their content and providing them with the tools they need to succeed, these platforms hope to keep creators engaged and loyal. However, creators are increasingly favoring platform-agnostic approaches, where they become independent brands and reduce their dependence on any one platform.

While big tech giants continue to shape the creator economy, there are actionable steps that creators can take to thrive in this evolving landscape:

• 1. Diversify your revenue streams: Relying solely on one platform for income can be risky. Explore different monetization options, such as sponsored content, merchandise sales, or even launching your own products or services. By diversifying your revenue streams, you can safeguard against changes in platform policies or fluctuations in audience engagement.

• 2. Build a strong personal brand: As creators become independent brands, it's crucial to invest in building a strong personal brand. Define your unique voice and niche, and consistently deliver high-quality content that resonates with your audience. Building a loyal following will not only attract brand partnerships but also give you more leverage when negotiating with platforms.

• 3. Learn in public and collaborate: The Feynman Learning Technique, popularized by physicist Richard Feynman, can be applied to the creator economy. Pretend to teach a concept you want to learn about to someone else, identify gaps in your understanding, go back to the source material to deepen your knowledge, and simplify and organize your learnings. By learning in public and collaborating with others, you can expand your knowledge and gain valuable insights from different perspectives.

In conclusion, the creator economy is being shaped by big tech giants who are vying for a larger share of this lucrative market. Platforms like Facebook, Substack, Amazon, Twitch, and YouTube are all making strategic moves to support and retain content creators. However, creators also have a role to play in shaping the future of the creator economy. By taking actionable steps to diversify their revenue streams, build a strong personal brand, and continue to learn and collaborate, creators can thrive in this evolving landscape.