The White House gives instructions to TikTokers about the Ukraine war. Twitch streamer's PS5 giveaway sparks bona fide riots. A 25-year-old YouTuber from North Carolina is a 100 most influential people in the world according to Time magazine.
If you underestimate the power of Internet personalities, you are not paying adequate attention.
In Silicon Valley, thecreator economy» used to be a buzzword almost as hot as «AI» is right now. But while content creators remain at the forefront of culture, the numbers behind venture capital investments tell a different story: Last year, the amount of money invested in venture capital companies creative economy fell about 68% from the first to the third quarter.
But creative economy investors are unfazed by what may seem like a sharp decline. Several investors said they knew the entertainment industry would weather some twists and turns as the world emerges from pandemic-era lockdowns and that trends in businesses may be cyclical. Some investors even said that the creator economy has not yet reached full maturity.
To learn more about the state of the creator economy industry and how investors think, we gathered answers from seven venture capitalists on where the industry is headed, the rise of short-form video, the changing role of influencer marketing and what is the launch of new platforms. omen
We spoke with:
- Brian Harwitt partners, Coventry
- Sasha Kaletsky co-founder and managing partner, Creator Ventures
- Julia Maltby Director at Flybridge
- Jose Constine Investor, Signalfire
- Katelyn Holloway Founding partner, 776
- Ali Hamed Co-founder and general partner, Crossbeam Venture Partners
- Sima Gandhi Founder of Creative juice; Investor and advisor at G3
Brian Harwitt, partner, Coventure
Is Twitter's accelerated launch of new competitors a boon or impediment to creator success?
Competition is good for creators as platforms will have to compete for their time, which is a limited resource. To attract and keep creators, platforms will need to continue offering monetization opportunities, spurring potential bidding wars, as we saw with Kick and Twitch.
The creator economy has seen a slowdown in business funding in recent years. Did you anticipate this and how are you preparing your portfolio companies to navigate a saturated market with less capital available?
Growth in the creator space was driven by two aspects: COVID and the rise of E-commerce (the main advertiser in the creator economy). People have largely returned to their daily lives and the E-commerce has returned to its usual pace, so the slower growth of the creator space is not surprising.
Despite this, we still expect significant growth in the coming years and believe the market has not yet reached maturity. The best companies still have access to capital, while the slower growing companies hold on to the cash they have.
Many venture capitalists backed businesses of creators of long tail (pending significant position but still very low) or those with a web3 focus, who have largely struggled to gain traction, so their attention has shifted to other areas such as AI.
What do you see as differentiated business models in this space given the intense competition?
Differentiated business models are those that can serve the largest creators or serve the long tail with minimal human touch required.
What types of creator economy companies are you most excited to invest in right now?
We are excited about companies that provide access to capital or some form of predictable monetization. We anticipate that predictable monetization and monetization infrastructure will continue to make the creator economy more attractive to debt and equity investors alike.
Will the economics of the digital economy be better for creators and creator-focused startups in the second half of 2023 than in the first? How will 2024 compare to 2023?
A rising tide lifts all boats, so what's good for the creator is good for the creator-focused startup. With all the changes in the last 12 months, many creators are simply catching their breath.
This year remains challenging for the ecosystem, as brands have reduced advertising budgets, capital markets have frozen and many fear an economic slowdown. Looking ahead to 2024, we hope to see a reversal in those three trends and enable a more secure creator economy.
Social platforms have yet to figure out how to share advertising revenue from short-form videos. Where do you see the platform creator economy faltering in the coming quarters?
YouTube's 55% to 45% model is a good paradigm for platforms to reflect, but ultimately the economic split will depend on competition and scale.
The introduction of Kick has forced Twitch to improve its payouts, so the platforms' competitiveness is expected to be a benefit for creators as they continue to look for the best monetization opportunities.
How can companies protect their creators if they go out of business?
It depends on the company and whether or not they are genuinely creators first. However, companies interested in protecting creators are likely to merge or sell rather than go out of business entirely, as this would create a better outcome for their investors and customers.
How does an unequal economy affect consumer spending on creator products?
Creator products are a nascent category and there is likely to be some pent-up demand to purchase their products, at least in the short term. Creators offering products with a lower average order value (AOV) are likely to see sustained demand, while items with a higher AOV may see a slowdown.
Consumers have nearly exhausted their excess COVID savings, so the next six months will be telling of the state of consumer demand.
Do you think influencer marketing is becoming more or less powerful? How does this compare to traditional marketing avenues?
Micro-influencers have the highest ROI for advertisers, but obviously the least amount of scale. Therefore, CMOs and ad buyers will focus significantly more on ROI as they approach creators and influencer campaigns.
What trends in the creator economy do you think are being overlooked?
Access to capital and predictable monetization. These are the pillars of a stable and mature industry.
Many social platforms have developed programs for creators in recent years. What are the different metrics you look at to measure the success of a creator program? Which one leads the pack?
Predictability and consistency of monetization are the most important.
TikTok is an interesting case study because it launched a monetization platform for its creators, but viewership and revenue per thousand impressions (RPM) vary greatly from video to video, meaning a creator can predict how much money each will make. month. even if they produce 10 videos a month.
Sasha Kaletsky, Co-Founder and Managing Partner, Creator Ventures
Is the accelerated launch of new Twitter competitors an advantage or an impediment to the success of creators?
Despite its ubiquity among venture capitalists and other professional creators, Twitter is virtually irrelevant to most creators. Word-based platforms are difficult to monetize (for both creators and platforms… just ask Twitter's creditors), so Twitter and the like work better as a tool to amplify messages rather than making money or attracting audiences. .
Basically, no one cares much about Twitter's new competitors.
What types of creator economy companies are you most excited to invest in right now?
Venture capitalists investing in the creator economy may find themselves swimming in fool's gold. It is essential to be very selective about which business models work and which do not.
There are three main spaces that we consider investable and have actually invested in:
Creative software platforms: These are products that creators enjoy using, are happy to pay for, and talk to their audience about.
Influencer marketing platforms: They represent the only consistent way for most creators to monetize, and brands' ACVs can be extremely high.
AI tools – This is a very rapidly changing space and the dislocation it will cause will certainly create opportunities. We are also aware that, in some cases, the hype has outweighed the opportunity at this time.
We've been skeptical about the vast majority of tools for creators outside of these three groups, so we're generally less excited about tools that help creators with their workflow, funding tools, community engagement. audience and brand building.
These are all attractive at first, but suffer from the same three problems: monetizing, retaining, and acquiring creators.
Social platforms have yet to figure out how to share ad revenue from short-form videos. Where do you think the platform creator economy will develop in the coming quarters?
YouTube used to be a monetization haven for creators as they had enormous influence over the platform. Users came to YouTube to watch them, and long-form videos meant that user time spent (and ads viewed) depended on the quality of each creator's video.
With TikTok, Shorts and Reels, creators don't have that influence. Users come to watch the platform and each creator who makes a short clip has a smaller individual role to play. Structurally, this should make shorts much more difficult for creators to monetize.
That's been the case so far, but let's see how it plays out in the long term as competition between platforms intensifies.
Do you think influencer marketing is becoming more or less powerful? How does this compare to traditional marketing avenues?
It is becoming much more powerful and prevalent. Influencer marketing budgets used to be separated from other lines of marketing. Now it usually represents its own line item. Case studies of brands seeing a dramatic positive impact from influencer marketing are starting to filter through to marketers, and most marketers are now taking it seriously.
Reddit launched a program earlier this year that allows creators to get paid for creating collectible blockchain-based avatars. Do you think platforms should continue leveraging cryptocurrencies to get creators paid? What blockchain use cases in the creator economy space are you excited about?
Cryptocurrencies in the creative economy are a red herring. It's a venture capital trend we've never been able to understand. Its main advantage is to make the assets liquid. . . . Why would a creator want that? It means your audience can lose money on them, which is the nightmare scenario for people whose sole purpose is to make their audience happy.
It's like trying to open a casino at Disneyland! We completely avoid the intersection of cryptocurrencies and the creator economy, and believe that even if cryptocurrencies have another bull run, we won't touch anything that tries to involve traditional creators. Maybe we are missing something, but so be it. We are happy to leave cryptocurrencies to crypto funds.
Julia Maltby, Director, Flybridge
How can creator economy companies protect their creators if they go out of business?
Unfortunately, many creator economy companies funded during the last boom are unlikely to find scalable business models and will be forced to close operations. Platforms need to be honest about the state of their business with creators.
This is especially true for platforms where creators host and manage their followers and fans. Migrating these communities elsewhere will require careful coordination: platforms owe it to creators, the backbone of their businesses, and they must provide the time to do so.
Do you think influencer marketing is becoming more or less powerful? How does this compare to traditional marketing avenues?
Influencer marketing remains incredibly powerful in driving consumer purchasing decisions. However, more and more of this content, which many consumers still believe to be organic, is carefully curated by corporations.
The most obvious and current example of this is Barbie's masterful use of influencer marketing to drive merchandise and ticket sales. In addition to carefully selecting influencers to promote the film (with different messages and followers), she also leveraged dozens of corporate partnerships to tap into other brands' communities.
All this is to say: influencer marketing is alive and well; It's just incredibly regimented and deliberate.
How does it is affecting the economy unequal to consumer spending on creator products?
For creators with highly engaged and loyal communities, we haven't seen a huge drop in consumer spending on creator products.
Popchew, for example, provides the infrastructure for creators to launch national food brands and has seen impressive growth and loyalty over the past year. Importantly, Popchew's creators sell food, which may be less subject to spending declines in more discretionary categories.
What types of creator economy companies are you most excited to invest in right now?
We're excited about the intersection of the creator economy and AI (surprise). While there are obviously tons of use cases for using AI to generate content, we're also seeing AI applications that use user engagement data to generate actionable campaign ideas and recommendations, for example.
Josh Constantine, Investor, SignalFire
Is Twitter's accelerated launch of new competitors a boon or impediment to creator success?
Alternatives to Twitter are a boon for creators, but also an additional source of work, as the new platforms offer possibilities for rapid follower growth before people fill their feeds. But gaining that initial momentum requires investing too much time in great content tailored to each app, even if they might fizzle out. Therefore, it may temporarily increase the workload of creators while they wait to see which one will be successful.
La creative economy has seen a slowdown in venture funding in recent years. Did you anticipate this and how are you preparing your portfolio companies to navigate a crowded market with less capital available?
We anticipated a slowdown as the pandemic subsided. Social apps had to repay user loan quarantine I wrote about, so we advised our companies to stock up on funding first and be cautious with staffing, and created a series of webinars and growth mastery guides to help them build capital-efficient growth strategies instead of spending money in advertising.
What do you think are the differentiated business models in this space given the intense competition?
Creators are not sophisticated buyers of enterprise software nor do they have software integration teams. Creator startups win when they take a percentage of fan spending, so They only make money when the creators do..
For example, Truffle doesn't charge subscription fees for its initial products, but it makes money in other ways. And Karat offers creators fee- and interest-free credit cards and then sells accounting services.
What types of creator economy companies are you most excited to invest in right now?
I'm looking for startups using AI to help creators scale their relationships with fans. Instead of having to ignore the majority of their comments and direct messages, I want to see tools that help creators respond more frequently while integrating fan feedback into their creative process. That feedback loop is what separates creators from distant celebrities.
How can creator economy companies protect their creators if they go out of business?
Any startup that closes should try to notify users as soon as possible, allow data downloads and, ideally, the ability to transition paid subscriptions to another platform. They should also keep the archive of user-generated content publicly accessible for as long as possible.
How does an unequal economy affect consumer spending on creator products?
As the tough economy discourages more expensive consumer activities and people spend more time at home, spending money to connect more intimately with your favorite creators can be an affordable form of entertainment. We've also seen the continued resistance of creator merchandise, as fans seek to represent their online interests in real life.
Do you think influencer marketing is becoming more or less powerful? How does this compare to traditional marketing avenues?
Influencer marketing will become more important due to:
- Weakened ad targeting due to new privacy regulations.
- The shift towards simpler, meme-focused marketing.
- The continued rise of micro-influencers who appeal deeply to niche demographics.
- The growing realization that representative one-size-fits-alls are less able to shape purchasing behavior.
- SAG-AFTRA strike blocks promotional ties with traditional celebrities.
Fans want recommendations from creators they trust, not ads.
What trends in the creative economy do you think are being overlooked?
Game development will be the next big space for creators. We've been on a constant march toward vividness in user-generated content, from text to photography, video to live, and now games.
Katelin Holloway, Founding Partner, 776
Is Twitter's accelerated launch of new competitors a boon or impediment to creator success?
With all the obvious potential downsides of a fragmented market, I'd like to believe there are great opportunities for creators here. From the most optimistic point of view, new platforms diversify the audience and sources of income. There is a wave of platforms social media new and exciting things that are flourishing in our digital landscape.
For creators, it's not just about broadening their horizons, but also about weaving a safety net of diversity. If a platform decides to change the rules, modify algorithms or change payment systems (in a way that doesn't quite align with the creators) there is no need to worry.
That said, more platforms equals more rivalry, both within the platforms themselves and among the creators who rely on them. Competition can be a fierce motivator, but let's not ignore the other side of the coin: the landscape is changing and, with it, the rules of engagement. Standing out is no longer an option; it is a necessity.
At the end of the day, it all comes down to the key issue of each platform. The magic, however, lies in how creators respond to the twists and turns of these platforms, how they embrace change and make it work in their favor.
The creator economy has seen a slowdown in venture funding in recent years. Did you anticipate this and how are you preparing your portfolio companies to navigate a crowded market with less capital available?
Trends in venture financing tend to be cyclical. The cooling of the current funding landscape for the creative economy is not exactly a surprise. But even as the pace of funding slows, featured products can still raise substantial capital.
Ultimately, startups that can demonstrate high-quality, differentiated products with strong user value, growth potential and financial viability will continue to attract investment, regardless of broader funding trends.
Our advice to portfolio companies is fairly standard:
- Focus on unit economics.
- Achieve profitability sooner.
- Diversify income sources.
- Maintain a strategically agile operational structure.
What do you think are the differentiated business models in the creator economy space, given the intense competition?
There are a few business models that have attracted us and that are proving to be very successful within our portfolio:
- B2B services for creators: This could include analytics tools, tools for managing fan relationships, or services that help creators with legal, accounting, or other business issues.
- Premium Fan Experiences: Creating unique, high-touch experiences for superfans can be a powerful business model. These could include virtual meetings, personal thanks, exclusive content among other things.
- Education and courses: Creators with expertise in specific areas can develop and sell courses or offer coaching/consulting services. This model can generate significant revenue, especially if creators can expand their offerings using online course platforms.
Other models that I think will excel in this economy include creator cooperatives or collectives, decentralized platforms, and creator-led product lines.
What types of creator economy companies are you most excited to invest in right now?
We've prioritized investments in services that allow creators to better manage their personal brand. We believe there is enough room for any platform that can successfully serve creators who specialize in certain types of content or who have a particularly passionate community.
Will the digital economy be better for creators and creator-focused startups in the second half of 2023 than in the first? How will 2024 compare to 2023?
Absolutely. Twitter (X)'s decision earlier this month to share ad revenue with verified creators to keep them on the platform is a huge indicator that the creator economy is here to stay. Since X aims to become the best platform for creators to make a living, every other platform has a real motivation to up their game. I also believe that consumers will continue to value and pay for personalized and independent (aka authentic) content, which will greatly benefit the creator economy.
Social platforms have yet to figure out how to share ad revenue from short-form videos. Where do you think the platform creator economy will develop in the coming quarters?
Competition between platforms will drive this race to serve, attract and retain creators. In turn, this could prompt platforms to offer better economic conditions.
Trends we're seeing beyond simple ad revenue sharing include direct monetization features (subscriptions, tips, paid events, etc.); brand associations; and enhanced analytics (tools to help creators understand their audience and optimize content).
Any platform that can find the best way to support these features or incorporate these considerations into its economics is sure to capture the biggest content creators on the market.
How can creator economy companies protect their creators if they go out of business?
One trend we are seeing across the industry as a whole is an increase in mergers and acquisitions. It is no different for companies in the creative economy. I think it's especially important for companies in the creator economy to be aware of the impact it would have on their users in the event of an acquisition or liquidation.
To start, transparent communication is key. Keep creators informed about the company's prospects. If there is a risk of closure, let them know as soon as possible so they can begin planning the transition.
Next is data ownership and portability. Make sure creators own the rights to their content and have a way to export all of their data, including content, followers, and interaction history. This can help them transition more easily to another platform.
Finally, educational and support resources for creators. This could include guides on how to transfer your content to another platform or how to communicate the change to your audience. The goal should always be to minimize the impact on creators as much as possible and help them move forward.
How is the uneven economy affecting consumer spending on creator products?
The economic climate absolutely affects the way consumers relate to the creative economy. The most financially secure could afford to support creators and enjoy premium experiences. Those facing financial challenges could tighten their belts, lean toward free content, and support creators with views and likes instead of cash.
The type of content consumed can also change depending on how the economy is impacting people. Consumers may be more interested in educational content that can help them learn new skills, improve their job prospects, or address financial challenges.
Regardless of the temper of the economy, articulating the value of a creator's contributions remains crucial, and people crave authenticity. I still believe there is a lot to learn at this point.
Do you think influencer marketing is becoming more or less powerful? How does this compare to traditional marketing avenues?
Consumers crave authenticity and demand trust. When you sell something, the important thing is to reach the right people in the right way. Influencers have their own unique niches and demographics that they serve, giving brands a direct line to their target audience. Collaborating with influencers can also do wonders for brand awareness.
I'm not saying traditional marketing is dead. Traditional marketing stands out for its massive notoriety, its established platforms, its B2B marketing and its non-visual products. Influencer marketing shines through trust, authenticity, and engagement with specific audiences. Ultimately, the effectiveness of any marketing strategy depends on the objectives, the target audience, and the nature of the product or service being promoted.
The reality is that influencer marketing is now a vital part of any marketing strategy.
What trends in the creative economy do you think are being overlooked?
The mental health of creators: Being a creator can be a stressful job, with the pressure of constantly producing new content, handling negative comments, and managing an online persona. As awareness of mental health issues grows, the industry desperately needs to find ways to better support the well-being of creators.
The role of AI: AI and machine learning can help creators edit, recommend content, and analyze audience engagement. They can also create new forms of content, such as AI-generated art, music, or text. Creators who embrace new technologies can produce more content with less effort, increasing their ability to create sustainable revenue streams.
Many social platforms have developed programs for creators in recent years. What are the different metrics you look at to measure the success of a creator program? Which one leads the group?
Creator Program Success Metrics:
- Creator Retention and Satisfaction: How successful is the platform in retaining its creators? A stellar program should offer enough incentives and support for creators to stay and continue producing content. Are the creators happy with the show? Surveys or qualitative feedback can provide insight into how creators feel about the support they receive, platform policies, and monetization opportunities.
- Income: Monetary benefits are crucial for creators. What is the average income of the creators of the program? What percentage of creators make significant income?
- Increase: How fast is the program growing? This can be measured in terms of the number of creators that join the program, the amount of content that is produced, or the audience that the program can reach.
- Audience Participation: Yes, the old standards: likes, comments, shares, watch time, and other engagement metrics.
There seems to be a renewed race to capture creators and influencers in the market right now. The YouTube Partner Program was historically the gold standard for creators because of its comprehensive program (different ways to make money, educational resources, and a massive audience with a clever algorithm), but TikTok has demolished it in recent years.
Now that X and Instagram are making big moves to unseat YouTube, I'm curious to see how the second half of 2023 plays out.
Reddit launched a program earlier this year that allows creators to get paid for creating collectible blockchain-based avatars. Do you think platforms should continue leveraging cryptocurrencies to get creators paid? What blockchain use cases in the space are you excited about?
You all know that I am a blockchain advocate and I believe that the adoption of this technology in the creator economy can be a big win. Reddit has proven this theory, but what will make it work more broadly? Direct payments, fair compensation through transparency, tokenization, copyright protection and global reach. Are we there yet? Not completely. We have a lot of work to do across the board regarding regulation, scalability, education, and simple UX/UI hurdles. But I still think blockchain technology is a core part of our online experiences.
Products and platforms that invest now in this technology to create user-friendly interfaces will likely drive long-term retention of top creators.
Ali Hamed, Co-Founder and General Partner at Crossbeam Venture Partners
Is Twitter's accelerated launch of new competitors a boon or impediment to creator success?
It's already difficult for creators to create an audience that is large and engaged enough to monetize. While owning more channels will be good for the long tail, the long tail doesn't make enough money for creators to go professional or produce professional content.
All in all, there will be too many channels, too much noise, and more lower-quality content.
The creator economy has seen a slowdown in venture funding in recent years. Did you anticipate this and how are you preparing your portfolio companies to navigate a crowded market with less capital available?
The creator economy has always been primarily YouTube. YouTube is the premier platform for creators to monetize, build a consistent audience, and unlock catalog value through viewing past content. This is all relative, but until they improve significantly, the creator economy will continue to be primarily YouTube.
We don't think the creative economy is as small as most people think it is now, and we don't think it was as big as most people thought then. It is an interesting space where it is worth financing some companies, but it is not the only market that exists, or an infinite market as some people claim.
What do you think are the differentiated business models in this space given the intense competition?
Much of it is based on the platform. We must serve the most important creators who have enough financial resources to become significant customers, and it is necessary to serve them on the platforms where they can monetize.
We also focus on creators whose audience is “bought.” The bar for becoming a follower of someone on TikTok is really low. The bar for watching someone's entire 20-minute YouTube video is higher. And the bar for paying for someone's newsletter is even higher.
We're looking for audiences that have something to do with the game and aren't just passively clicking a follow button.
What types of creator economy companies are you most excited to invest in right now?
Everything that Help creators better monetize their awareness It focuses on creators who produce quality content and has a level of differentiation.
Will the digital economy be better for creators and creator-focused startups in the second half of 2023 than in the first? How will 2024 compare to 2023?
We are in a wave in which social networks are no longer social. The content we see is not published by our friends, but by professionals. This is causing a decline in network effects where barriers to entry are disappearing, making it easier than ever to create new platforms.
The more competition there is between platforms, the more they will have to provide economies to creators and capture less value. It will probably improve over time.
The question is: will venture money over- or under-fund the space as it grows?
Social platforms have yet to figure out how to share ad revenue from short-form videos. Where do you think the platform creator economy will develop in the coming quarters?
The short format video will be to generate audience. The real monetization tools will be paid subscriptions, long-form subscriptions, and alternative forms of monetization such as events or online product sales.
How can creator economy companies protect their creators if they go out of business?
Creative economy platforms are like governments. They have rules, regulations and moral values. The best thing a government can do is be predictable and rational. That's also the best thing platforms can do.
How is the uneven economy affecting consumer spending on creator products?
I'm not sure yet, but it will be a cheaper alternative form of entertainment or limit discretionary spending on limited edition items. My hunch is that it won't have much of an impact because it's already a cheaper form of entertainment than movies or, sadly, real-life entertainment.
Do you think influencer marketing is becoming more or less powerful? How does this compare to traditional marketing avenues?
Less so, because people are used to it. Every advertising platform is as good as new. This may be an exaggeration, but I can't think of any advertising platform that has become more attractive over time.
What trends in the creative economy do you think are being overlooked?
Creators as media companies and all the services that those broader media companies need.
Many social platforms have developed programs for creators in recent years. What are the different metrics you look at to measure the success of a creator program? Which one leads the group?
Can shows identify creators who have true fans, where they would appear only for that creator? I've always loved how cable or streaming networks think about bundling. Just as Spotify made certain podcasters exclusive, platforms that have creators dependent on the platform have rigidity.
Sima Gandhi, founder of Creative Juice, investor and advisor at G3
Is Twitter's accelerated launch of new competitors a boon or impediment to creator success?
New platforms provide more distribution opportunities for creators, which is a good thing. At the same time, it's a big help if creators can monetize the content they produce.
YouTube continues to be a leader in its thinking about revenue sharing with its content creators, and I'd like to see more platforms adopt it. clear revenue sharing policies that are more like an association, with a more equitable distribution of income.
The creator economy has seen a slowdown in venture funding in recent years. Did you anticipate this and how are you preparing your portfolio companies to navigate a crowded market with less capital available?
It is critical for companies to “read the market” and right now the market values efficient growth and doing more with less rather than maximum growth with easy capital. Companies must quickly adapt to this reality as they look to the future and prepare to adapt to the metrics they will need to achieve in the future.
What do you think are the differentiated business models in this space given the intense competition?
Many creative companies focus on services, but there are not many technologies and infrastructure for construction. The companies that will thrive will have strong tech teams that create unique products that don't necessarily rely on service revenue (e.g., taking cuts from deals with creators' brands).
Companies must also combine the business and creative aspects of creation. Today, too many companies focus on one or the other.
What types of creator economy companies are you most excited to invest in right now?
I'm most interested in companies that are developing technology rather than service-oriented companies that scale by adding more people.
Will the digital economy be better for creators and creator-focused startups in the second half of 2023 than in the first? How will 2024 compare to 2023?
It depends on the broader macroeconomy. As more and more creators monetize significantly, whether part-time or full-time, interest in the market will increase.
A growing appreciation of the scale of the monetizing creator economy coupled with macroeconomic rebounds will hopefully turn things around.
Social platforms have yet to figure out how to share ad revenue from short-form videos. Where do you think the platform creator economy will develop in the coming quarters?
YouTube remains one of the leading platforms with its 45/55 revenue split. An equal split should be a standard for all platforms, because creators and platforms are on a level playing field. They need each other and both benefit.
Creators pay almost 50% of the money they earn in exchange for distribution rights, technical support, content moderation, etc. It is fair that platforms pay 50% of what they earn from creators' content.
Another big opportunity is how to add financial liability on platforms for when they don't live up to their end of the partnership. Platforms must compensate creators for losses that occur due to platform failures, policy errors, or other issues not caused by the creator.
How can creator economy companies protect their creators if they go out of business?
There are multiple ways to safeguard, including proper notification, referral partners, strategic partnerships and acquisitions.
How is the uneven economy affecting consumer spending on creator products?
Spending on creator products will likely follow broader consumer spending trends. One of the biggest opportunities is helping consumers find products from creators.
I'm still waiting for a company to improve search so that people can "upgrade" the algorithm to find the content and product that is best for them instead of content that is best for gaming the algorithm.
Do you think influencer marketing is becoming more or less powerful? How does this compare to traditional marketing avenues?
Definitely more. Along with the decline of television and traditional publishing, digital marketing and advertising they keep growing. The reality is that the next generation of consumers is informed differently and influencer marketing is a fundamental piece of generating awareness and spending.
What trends in the creative economy do you think are being overlooked?
Creators are the best example of individual entrepreneurs: people who work on their own. Most people think that creators are “all or nothing,” but the reality is that many people are part-time creators who can monetize significantly.
The median household income in the United States is about $70.000, so even earning $10.000 is a 15% increase in annual income. That's huge! There is a huge opportunity to give creators and solopreneurs the business tools they need to ensure they capture value from their side businesses.
Many social platforms have developed programs for creators in recent years. What are the different metrics you look at to measure the success of a creator program? Which one leads the group?
It's not always easy to tell from the outside, but I look at which shows last the longest. I also look at the sustainability of the income provided and the transparency of the terms.
Ideally, creators know what they need to do to monetize and have an approximation of what they can earn. YouTube continues to lead the pack because it has a long-standing and sustainable creator program, and while it can do more for accountability and helping creators understand that they are businesses, I appreciate the “partnership” mentality and sustainable approach that has adopted YouTube.
