First, there was the side hustle. In a world undergoing rapid digital transformation, it felt like everyone was turning their hobbies and skill sets into additional revenue streams. Whether selling handmade crafts on popular marketplaces like Etsy, picking up jobs on freelancer platforms like Fiverr, or monetizing proprietary content through membership platforms such as Patreon, legions of creatives suddenly created supplemental income streams, achieving greater financial security in the process. As Covid-19 drove us indoors, more individuals honed in on their passions — and found ways to make money from them, too.
Recently, we've seen this evolve, with creators turning their side gigs into their primary sources of income. As traditional employment models turned on their heads throughout the Covid-19 pandemic, more and more creators are finding innovative ways to turn their entrepreneurial side hustles into liveable salaries.
We're witnessing the real-time rise of a creator middle class, bolstered and supported by tech platforms that put power into the hands of creators and enable an easy path to monetization. With over 50 million content creators spanning influencers, videographers, bloggers, and community builders, the creator economy is thriving, and will have a seismic impact not only on the wallets of its entrepreneurs, but on our economy as a whole.
Shifting "ownership" into the hands of creators
It's no surprise that the pandemic has changed the way we work, live, and play. Perhaps the greatest change has been in the acceleration of a shift from physical environments to virtual ones. From remote work and online learning environments, to surges in e-commerce and online shopping, most aspects of our lives can be played out online.
This has come with widespread social shifts. We're more attuned than ever to fair working conditions, work-life balance, and having agency over how and where we spend our time. Creators who have found success as their own bosses may be hesitant to head back to a cubicle anytime soon.
Alongside these social changes, we've seen an influx of new platforms that make new business models possible. Entrepreneurs have lower barriers to entry than ever before — and more ways to cut out the middleman between their services and products and their audiences.
For starters, whether creators are offering digital services, entertainment, or physical goods, they're increasingly empowered to have direct customer relationships.
Take, for instance, a personal favourite creator of mine: Peter "Pete" Mckinnon, an acclaimed photographer, filmmaker, and YouTube creator. Pete garnered an impressive YouTube following — to the tune of 5.67 million currently — by putting out regular video content coaching others on photography and delving into other niche topics such as Game of Thrones and coffee culture.
But Pete also created a unique sub-brand: Pete's Pirate Life, a password-protected site where he drops limited edition merch including pocket knives, axes, and luxury watches. Generating hype under the hashtag #flytheflag, Pete's Pirate Life has developed a cult following of consumers eager to get in on the next product drop.
It may sound random for a professional photographer to easily veer into an axe and watch business, but that's the beauty of it: Pete has built such audience loyalty, that it doesn't really matter what he sells, his audience will buy it. (In fact, I would predict that the Pete’s Pirate Life brand will garner much more revenue in the long run than that earned from Google ad revenue and paid sponsorship combined).
Pete is just one example of how creators can earn money through multiple revenue sources — benefitting from ad revenue shares, spon-con, product placements, physical and digital sales, exclusive events, merch, and so on. Savvy creators realize that through customer loyalty, they have a fair bit of leverage — and the more direct income streams they can build with their audiences, the better.
We're seeing more entrepreneurs take a chance on their own brands and products, and finding much success. At the same time, the success of this class is deeply intertwined with the platforms that make it possible.
The third-party platforms driving the creator class revolution
Technology has given makers the ability to build their personal brands and audiences, with content they produce and distribute on social platforms. These creators are often learning how to build their own businesses in real-time, relying on communities of makers, their followers, and large volumes of content that guide the way.
A recent study by venture capital firm SignalFire found that out of 50 million+ content creators, 2 million are making their full salaries as content creators, with the remaining 47 million working part-time.
Based on the 2M+ professional full-time creators, the reigning creator platforms are YouTube, Instagram, and Twitch — but it's worth noting that third-party platforms cater to all stages of the professional content creator journey.
- Social media and streaming platforms such as Twitter, Twitch, Instagram, Spotify, Apple Music, Youtube, and Tik Tok work to connect creators with audiences and content they produce as well as earn revenue for ad sharing and livestream donations.
- No code apps like Canva, CapCut, and Adobe Creative Cloud Express have enabled makers to produce high-quality content at no or low cost to the creator.
- Youtube Paid Subscriptions, Patreon, and membership-based platforms are facilitating a rise in subscription models, allowing creators to be paid for their gated content in exchange for rewards, perks, and exclusionary content.
- Printful, Shapeways, and other product and manufacturing companies are catering to D2C culture. With the development-to-production stages handled by third parties, makers no longer have to establish their own in-house departments or acquire their own materials. Rather than own a factory, they simply need to have great ideas.
- Fiverr, Upwork, 99 Designs to source other creators to support in the area of design, video editing, music production and just about any other odd job or part support work that creators need to scale.
- Udemy, Thinkific, and other educational content is easy to find and just as easy to produce. Third-party platforms are filled to the brim with "how to" content, making it simple for creators to learn from their communities of peers and sharing their own tips in turn.
- Storyblock, Epidemic Sound, and Artgrid to sell video, sound, and other production assets for other creators to use in their work.
- E-commerce marketplaces and social media platforms like Etsy, Shopify, and Instagram allow greater exposure and global audiences. It's now easier than ever to create demand, drive traffic, and reach consumers within these platforms' established infrastructure and capabilities.
The list goes on. With entertainment platforms (think: live concerts through platforms such as Dreamstage) changing the performing arts sectors; embodied virtual-reality experiences and the Metaverse taking VR to new heights (see platforms such as Gumroad, which specialize in virtual goods); NFTs sparking widespread disruption in how we own, sell, and transfer art; and a constant influx of new tech platforms that continue to change how we build and engage with audiences and communities, the creator economy has endless ways to create, distribute, and monetize their creativity.
Some monetization models are better than others
When it comes to the creator middle class, third party platforms might be the ultimate double-edged sword. On the one hand, they make it easy for creators to get their work in front of audiences. But creators are also at the mercy of platforms' rules, regulations, and the dreaded algorithms.
YouTube is a prime example of this. Creators on the platform make money indirectly, through a share of ad revenue. But financial success through this model is difficult — with YouTube's algorithms driving users back to its top creators, it can be difficult for new creators to break through. Spotify is another platform that may not have its creators' best interests at heart, with musicians paying artists a measly $0.003-$0.005 per stream on average.
Other platforms, like TikTok or Twitter, have experimented with direct payment options, adding tip jars or enabling users to send digital gifts. The benefit here is that creators receive the bulk of the pay, but the model remains imperfect, with the potential for creators' hard work to go uncompensated.
Returning to the notion of "ownership", the best platforms in my opinion are those that enable users to set their own prices and retain ownership over their content in full. Marketplaces like Shopify or membership platforms like Patreon largely free creators from the imbalances of skewed algorithms, instead empowering users to find the content or products that interest them most, and for creators to profit accordingly.
At the end of the day, digital creators are at an interesting inflection point. It's clear we're not returning to a pre-Covid economy—nor should we want to. If third-party platforms can continue to support the rise of our creators, it could mean excellent things for income equity, and even disrupt the power imbalances in our systems at large. Best case scenario? Content creators and third-party platforms alike will realize this potential—and push for an ecosystem that allows the "creator middle class" to truly thrive.