Over the past couple of years, we have experienced an increase in the creator economy, i.e., creators gain income from web content production and distribution. The practice of monetising creator-based web content is not a new or fresh concept. A clear example of this is the existence of platforms like Patreon, KickStarter and Drip etc. These platforms are now helping the creator economy ease into what is called the New Normal. And the world is slowly moving away from the Attention economy and the prospect of pleasing a larger audience to gain traction. However, if these platforms have been in the webspace for almost a decade, why and how is it that the creator economy is becoming our new normal only now?
Before we explore the answer to that question, let us understand what the Creator Economy is.
The creator economy operates on a simple theory. Create something and use it to generate your income. The most significant step in the process is the publication of content on different creator innovation platforms, such as YouTube, Instagram, and Facebook, which eventually creates a sizable profit for the creator.
One of the reasons the internet has changed the game is that it encourages content sharing amongst a far and wider audience. Now the developers have the option of working on more specific target markets (creator economy) rather than catering to a larger audience to gain enough revenue to be profitable (attention economy), as was the case just a few years back.
HOW AND WHY IS THE CREATOR ECONOMY BECOMING THE NEW NORMAL?
The discussion about the sudden popularity of the creator economy can never be complete without bringing up the model that started it all - The Attention Economy, which required the creator to cater to a large audience to become profitable. The revenue was ad-based, implying the viewer attention was imperative, unlike the new Creator Economy Model. Even after the existence of crowdfunding platforms for almost a decade, it is only now that the economy is starting to pick up a lot more pace, and hereunder I list the major factors which have significantly contributed to this new development.
The journey from sixdegrees.com to Instagram.com has been long and full of surprises when it comes to the case of content creation. It perfectly explains the sudden shift in paradigm, where the world moves from an Attention Economy, one of the world's most valuable developments that dominated the creative industry in the 21st century, to a Creator Economy, which consists of networks, markets and resources that liberalise creative expression and entrepreneurship and allow an autonomous creative class to make a living with its passions and hobbies.
The rise of the creator economy is due to the practices undertaken by the attention economy. Though a very progressive concept, it was doomed to see this day. The reason behind it is the market situation it created, where people around the world were allowed to explore larger public forums. There was a gradual but acute power shift as the creators and their influence grew. This helped in reducing obstacles to micro-entrepreneurship and helped individuals with niche passions to find like-minded people to convene against the so-called mainstream. Hence, the existence of the New Normal of the creator economy can be attributed to the various practices of the Attention Economy. It seems as if for the creator economy to come into existence, the rise and the subsequent downfall of the attention economy was crucial. It almost seems that the creator economy was the hidden result of the attention economy.
But the most surprising factor, which has heavily contributed to the sudden and stark rise of the creator based economy into becoming a regular part of our lives, is the Global Pandemic. COVID-19 has operated as an unanticipated stimulus for digital and social media activity. Consumers are investing more time online, and businesses, artists, and developers are realising the value of establishing their niche communities. The amount of time spent deepening relationships with the audiences and the platform's profitability is strongly linked, which is especially true when a network is run by people who share the same passion rather than a corporation.
The searchlights have turned off as COVID-19 is disrupting legacy media creation and distribution. Moreover, many regular folks are trying to be Content Creators, and with a modern comprehensive tool-stack of platforms to help them earn money, if there was ever a time for these new and small content creators to make an impact, it is now. Thanks to COVID-19, the number of content creators has gone up significantly, as small business owners, youtube content creators, tiktokers, etc.
Another reason for this sudden change in interests is the Gig Economy. This economy offers a new set of opportunities for gig workers and side hustlers to benefit from their ingenuity by linking them with authentic and engaging audiences that share their interests. For customers, this ensures a wide range of innovative goods and services and easier access to them. They can hope to see platforms and marketplaces that stress uniqueness on both sides of the spectrum. The creator economy is deep-rooted in the concepts on which the Gig Economy works. Hence, it should not come as a surprise that it has contributed a lot to its rise.
WHAT DOES THE FUTURE LOOK LIKE FOR THE DIGITAL MARKET AMID THE RISE OF THE CREATOR ECONOMY?
More than 50 million people around the world believe themselves to be creators, making enough money from their hobby to make it a full-time career. Notably, YouTube accounts for half of all creative artists' income, with Instagram accounting for 25% (500,000). Twitch, which has 300,000 professional streamers, is another large forum for professional creators. The remaining 200,000 (approximately) create revenue for their creators in other ways, such as performing, music, and so on. The largest group here (30 million) comprises Instagram influencers, but there are still a significant number of YouTubers who make a living (12 million).
The digital market is expected to touch new heights in the future, with the creator economy bringing even more revenue than ever before. A notable example of this is the growth that many social media giants have registered in the past year. For instance, Etsy sold $346 million worth of masks between April and June 2020, making it one of the best-performing S&P 500 stocks of the year. OnlyFans currently has 450,000 Creators, all of whom earn over $100,000. As per YouTube, the number of channels receiving five and six figures is increasing by 40%, while the overall number of new channels is also increasing by 40%. Patreon (which allows individual artists to receive fees directly from fans) and Shopify (which quadrupled in size to £133 billion after the pandemic and is now the world's 87th largest company) also hit $1 billion in value this year.
Overall, the market seems to be making remarkable progress. While it is still in its initial phases, the trend seems to be towards monetising connections rather than products and services. While the technological resources and expertise required to enforce this are still in their infancy, many developers are already achieving tremendous success on these platforms. The prospects for creators will only expand in the future, while the rewards to customers will be extensive. The creator economy is its own little Truman Show, and we are witnessing it right now.
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Written By: Shubhi Pandey (firstname.lastname@example.org)
Edited By: Priyanshi Kapoor