Golden Age For Creators: not everyone gets rich, but a middle class emerges
Let’s quickly revisit a May briefing by The Economist on social, big tech, media wars. Most interesting is where creators sit in all of this. I believe it’s the golden age of creators not because every creator gets rich now, but because there may finally be a reliable creator middle class emerging. This is a huge positive for people who want to replace decades of corporate servitude with creative and lifestyle control.
Below are a few key excerpts on these themes, and link to full briefing below. Also linked below is a post I did last year about 6 ways to make money as media, advertising, and management consulting all converge. Because it’s rarely just about content if you’re moving your career in this direction. The content you post (whatever type of content it is and wherever you put it) might make some money, but the reliable money comes from a combination of these other 6 areas. Comment below or reach out with your thoughts on the matter.
[Since tech and social platforms] set the conditions for a piece of content’s success, via algorithms, [content creators] have to adapt to their rules, thus commoditising themselves. In this world of abundant supply, content providers become as interchangeable, and have as little bargaining power, as Uber drivers.
…Yet something in this model is changing. Though there is more content than ever, platforms are competing harder than ever to get it.
…Substack gives writers 90% of the subscription fees they charge for newsletters; together its top ten authors earn more than $15m a year. Twitch gives its game streamers more than half of its subscription fees, plus a cut of ad revenue and the money paid to “cheer” their performance. Cameo, a platform on which 40,000 celebrities sell personalised videos to fans, passes 75% of the spoils to contributors. Brian Baumgartner, an actor in “The Office”, an American sitcom, was its top earner last year, making over $1m.
…Twitter was in danger of becoming a promotional tool for Substack writers and Clubhouse broadcasters. It is now trying to beat both at their own game. In January it bought Revue, a newsletter firm, and cut its commission to 5%, half Substack’s. On May 3rd it added Spaces, a Clubhouse-like audio feature; soon it will let users sell tickets to chats they host. The ability to sign up for a newsletter or join an audio room directly from Twitter, without the friction of moving apps, gives the company an edge over its startup rivals, says Mark Shmulik of Bernstein, a research firm.
Facebook is also trying to make creators stick around. Last year it made paid subscriptions widely available and enabled tips. It is now testing a Cameo-like feature called “Super”, a Substack-esque newsletter platform, and is paying gamers big bucks to join Facebook Gaming, its tribute to Twitch. In all, it says, the number of content-makers earning over $1,000 a month on the platform almost doubled in 2020.
“In developing all of these things, we’re actually really focused on the creator side, even more than on the consumption side,” said Mark Zuckerberg, Facebook’s boss, in a recent interview with Casey Newton, author of the Platformer newsletter. In an effort to attract more of them, it is offering creators not just money but power: newsletter authors will own their recipient list and be able to take it to another platform, the equivalent of being allowed to move one’s Facebook friends over to Twitter.
YouTube, which has long given regular video-posters a 55% cut of ad revenue, is developing new features including tips in the form of paid “applause”. It says the number of channels joining its paid “partner programme” in 2020 was more than double that in 2019. In all it has paid contributors $30bn in ad-revenue shares and subscription fees in the past three years, far more than any other social platform. Last year TikTok, a short-video app, launched a “creator fund” which it says will dispense more than $2bn to users in its first three years. Douyin, its Chinese twin, is investing $1.5bn with the aim of doubling its creators’ revenues. Snapchat, another social-video app, last year launched Spotlight, a sharing feature through which it is paying $1m a day to the creators of its most popular clips.
Newer types of media are joining in. Douyu and Huya, China’s largest game-streaming platforms, each paid out 7.1bn yuan ($1.1bn) to streamers last year, 31% more than in 2019. Spotify and Apple, the two biggest podcast platforms, are wooing amateur broadcasters. Last month Apple announced that it would let podcasters charge subscription fees, of which it would take a 30% cut for the first year, then dropping to 15%; days later Spotify followed suit—but said creators could keep the lot (from 2023 it will take 5%).
As platforms fight over the most popular content, bargaining power is being transferred to the people who make it.
The share of revenue that creators can earn seems to depend on how easily they could leave. Moving one’s email list away from Substack is simple, so the firm lets writers keep 90% of their revenues. Game-makers on Roblox, who are basically stuck there, keep about 25%.
The dancers of TikTok and pranksters of YouTube, whose popularity rises or falls on the tweak of a recommendation algorithm, may seem easily replaceable. In reality, the opportunities for interaction with online stars may make their audiences more loyal than those of other celebrities.
…“After a decade of building their audiences, a class of Super Creators have emerged that have leverage over their aggregators,” wrote Rameez Tase, head of Antenna, an audience-measurement company. “They simply built such large, engaged audiences that those audiences would follow them anywhere.”
…Spotify says it wants to give “a million creative artists the opportunity to live off their art”. But only about 0.2% of the 7m-plus musicians on the platform make more than $50,000 a year in royalties; just 3% make more than $1,000. There are 20m gaming “experiences” on Roblox, but nearly 15% of all play takes place on one game, “Brookhaven rp”, according to analysis by Ran Mo of Electronic Arts, a game developer. On Patreon, where people can subscribe to creative services of all sorts, 200,000 creators earn a total of $1bn a year. The top earner makes around $2m, but about 98% make less than the federal minimum wage of $1,257 a month.
…Making real money requires a huge audience: even 1m views on YouTube might make the poster only about $2,000. Some types of content attract even lower ad rates. PornHub says its amateur contributors earn an average of $0.60 per 1,000 views; 1m hits would net just $600. Ads can make megastars rich, but cannot provide a living for small-time foot goddesses and other niche creators.
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Reference:
– Golden Age For Creators: not everyone gets rich, but a middle class emerges
– 6 Ways Creators Of Business-Focused Content Can Make Money