The unsustainable creator economy
If you’ve had the experience of working with me, especially if that experience is recent, you’ve probably heard me say, “[term x] is one of the most overused in marketing and communications”. The most common words I insert into this phrase are ‘content’ (oh, how I hate and have always hated this word) and ‘digital’ (particularly common given this is what I ‘do’).
The problem with words becoming as ubiquitous as ‘content’ and ‘digital’ is that they lose any sense of inherent meaning. That is, of course, if they ever had meaning in the first place.
Alongside this loss of meaning is a multitude of definitions to different people. A basic example: for a B2C brand, content is synonymous with videos, GIFs and images. For a B2B company, content is white papers, infographics and webinars.
I raise this as it feels that the word ‘creator’ has recently crossed the Rubicon into this territory. A look at Google Trends for the topic ‘creator’ shows a steady climb of interest over the past 15 years, with a distinct lockdown spike (April 2020) and a slight recent decline.
This spike of interest at the beginning of lockdown one represents a confluence of trends: the rise in usage and media attention around platforms such as Patreon, Substack and OnlyFans; the increase in social networks adopting Twitch-style monetisation features; the explosion of TikTok into the mainstream, and the associated democratisation of becoming a ‘creator’ that TikTok brings.
This confluence of events led to ‘the rise of creators’ turning into a bona fide trend you’ll find in PDF reports up and down agency-land — at first, it was called the subscription economy. But that sounded boring, so we followed Li Jin from A16Z’s lead and switched to the passion economy. And (it seems) we’ve now landed on the creator economy.
The central tenet of the creator economy is the idea that anyone can earn money from creating…stuff by selling it via the internet. As a trend, we often align it with the future of work and the great resignation (I know I’m ticking all the overused trend buzzwords here). The logic goes: it’s easier than ever for people to make money from selling their creations, even if their creations are words, images and videos.
And it’s true; this is something of a revolutionary concept. I’m old enough in the tooth to have worked with bloggers to promote brand campaigns back in the day. For most bloggers, keeping their site updated was a passion, a labour of love. They might sell advertising, but this was unlikely to earn enough cash to make blogging a full-time job for most people (particularly those in more niche industries). In 2022, it’s much easier for writers to monetise their readers — and many writers/bloggers/journalists can make good money with paid subscriptions from just their top 5% most devoted readers.
The other idea that the creator economy unlocks is doing what you love full-time. Your Twitch streams or podcasts will no longer be a side hustle that you produce when you’re not working. By going direct to your audience and bypassing cultural “gatekeepers” (thanks to Rex Woodbury for this descriptor), you can, in theory, at least, make enough money from your creative pursuits to pay the bills. According to recent research by Morgan Stanley, 41% of people currently making money through “content creation, e-commerce and NFT/trading platforms” plan to leave the traditional world of work in the next two years.
You can see the attractiveness of the creator economy model. Who wouldn’t want to earn a living by doing what they love?
The challenge the creative economy is likely to face has troubled any breakout social/digital platform over the past 15 years — how do you deal with scale? How do you marry up the demand and supply of basic economics with a nebulous term like creator that has no limits on supply?
As Benedict Evans regularly points out, this is why all the major social media platforms now have algorithmic newsfeeds. At some point, there is just too much to wade through, so you need a way of being able to sort through and find what you’re interested in quickly. For many hundreds of years, the gatekeepers mentioned above performed this role. Yes, there are probably some great works they’ve overlooked, but there’s plenty of rubbish they’ve kept us from. The modern gatekeeper is the algorithm programmed to give you more of what you want and less of what you don’t.
Human beings don’t do well with too much choice. The book the Paradox of Choice argues that having too many options causes consumers to become overwhelmed and choose nothing. That’s precisely why we rely on curators and algorithms to do the sifting for us. The process of sifting means that some posts/articles/streams grab attention, and some don’t. And if the creator economy continues to grow exponentially, it stands to reason that trying to stand out and get people’s attention will get tough and tougher.
The recent Twitch data hack provides an example of this. The amount of money each streamer made directly from Twitch was included in the leak, meaning we could see just how many of the platform’s active streamers are making meaningful money from the Amazon-owned service. According to an analysis by PC Gamer, you’d need to be in the top 0.015% of streamers to make something approaching living wage from Twitch.
Now, these numbers don’t consider any side deals streamers might do (i.e. brand partnerships), but it gives an insight into the long tail of the creator economy. The most prominent accounts make big money; most people make very little from their creations. The likelihood of all the people planning to quit their job and take up creating full-time earning enough to do so are pretty small.
You might argue that Twitch is only one platform and that gaming is a more specific creator vertical than, say, writing a newsletter or doing TikTok comedy. But I still believe that the promise of the creator economy is many times larger than the actual rewards waiting for people who want to make a living by doing what they love. And that’s leaving aside the burden of being a creator. As Nadia Eghbal argues eloquently in her piece on the creator economy, “if you’re obligated to create something every day, rather than when it feels right, you’ll start putting things out there that aren’t very interesting to fill the space.” There are plenty of long reads out there that unpack the physical and mental burdens on Twitch streamers and famous YouTubers.
All this isn’t to say that the creator economy is going away or that if you see it in a trends presentation, you should immediately discount that session. The options for those who create (whatever form that takes) for a living to make money from it are easier to access and more popular than ever, and that isn’t likely to disappear in the short term.
I struggle to see, based on the current models, a future world where millions of people can entirely give up the traditional world of work in favour of making a living from their creative pursuits. There isn’t enough attention to go around.
I see a continued steady increase in people moving to more flexible working patterns to protect their time on their passion projects (whether that’s ‘creating’ or something else). A gradual shift that fits aptly with my philosophy for 2022 of focusing on long-term trends and things that don’t change.
We already know that many gig economy workers work as much as possible for short periods to unlock longer chunks of time that they then devote to other pursuits. The four-day working week has moved from “ridiculous suggestion” to “viable idea”; again, it fits the rebalancing of work and life. But it’s important to remember that this process is just that — a rebalancing. As much as we love more drama in marketing and communications, the reality is much more mundane. We’re not all becoming creators overnight.