April 08, 2024 , in technology

Ask any young person in your life what they want to be when they grow up, and there is a good chance they will tell you they want to be a YouTuber or some other type of content creator. In fact, “social media influencer” continues to be the top career aspiration for Gen Z. It’s understandable; getting paid to share your enthusiasm online is an attractive business model. Still, like everything that seems too good to be true, there are many questions to be answered before undertaking a career in the creator economy. It’s important to understand how creators get paid, which platforms are most lucrative, and more. In this article, Eidosmedia will explore how lucrative the creator economy really is and how the relationships between the creators and platforms are evolving.

Earning paths: Where creators make their money When it comes to making money as a content creator, there are as many ways to make money as there are platforms to create content. However, most creators still consider themselves amateurs. Zippia tells us that of the 50 million people who call themselves creators, only about 450,000 consider themselves full-time professionals and only 12% of the full-time creators make more than $50,000 annually. With that in mind, let’s explore the main ways that influencers and content creators make money. Creator funds User-generated content is the lifeblood of platforms like TikTok, Instagram, and YouTube. Without people willing to create a constant stream of new and interesting content, these platforms would not have a business model. During the height of the pandemic, TikTok introduced a creator fund to help compensate the people whose content is so important to making the apps successful. Essentially, these funds allow the platforms to pay creators based on engagement metrics. Each platform has its own formula, but back in 2021, TikTok creators needed at least 100,000 video views in the last 30 days to be eligible. Since then, disappointing payouts have led creators to complain. By the end of 2023, TikTok announced it was shutting down the original fund and starting a new “Creativity Fund.” Clearly, depending solely on the platforms themselves to monetize content is not an option. Ad revenue Another option for some creators is to share in ad revenues. This option should be familiar to YouTubers. The YouTube Partner Program (YPP) gives creators an opportunity to share in the revenue generated by ads played against their videos. In order to qualify, content creators must have 1,000 subscribers with 4,000 valid public watch hours in the last 12 months, or 1,000 subscribers with 10 million valid public Shorts views in the last 90 days. According to Forbes, “The partner program offers a 55% share of revenue share on long-form videos, and was expanded to include Shorts in 2022. Short-form video creators earn 45% of allocated Shorts revenue based on their share of total views.” Kapwing reports, “the average YouTuber makes $0.18 per view. That works out to $18 per 1,000 views. And the average payout from YouTube in the US in 2022 was $1,154 per week.” TikTok introduced a similar ad revenue sharing scheme in 2023, but only for premium content brands. The Pulse Premier program gives premium publishers, like Conde Nast, an opportunity to earn ad revenue on their content. This option, however, isn’t open to the average influencer. Brand deals Direct deals with brands are by far the most lucrative option for content creators and influencers. A Goldman Sachs report found that brand deals account for almost 70% of revenue in the creator economy. Meanwhile, “Only about 4% of global creators are deemed professionals, meaning they pull in more than $100,000 a year.” The report also predicts the total market could grow to $480 billion by 2027, but competition for those dollars is also likely to increase. Selling premium content When we think of content creators, we don’t always think about people who are creating in-depth content that they can sell direct to consumers, but that is often the case. The coaching industry has soared as the web gave coaches more direct access to audiences all over the globe. According to CoachRanks, in 2023, the coaching industry market size reached $5.34 billion. That could reach $6.25 billion in 2024. You don’t have to be a coach to sell premium content, though. Platforms like Patreon make it possible for content creators of all stripes to put content behind a paywall, allowing their most dedicated supporters to pitch in and pay for more content. Other ways for creators to make money Above, we have explored some of the most common ways for creators to make money, however, they are not the only options. Influencers and creators often sell merchandise, join affiliate programs, or make money through livestreams. Getting creative and diversifying income streams may be the key to success. Platform tactics: Supporting or exploiting creators? Creators and the platforms they use to distribute their content have a tense relationship. Without each other, they could not survive, but the power dynamics have traditionally been lopsided. Not only do platforms rake in millions — or even billions — of dollars on the backs of content creators, but they have, historically, shared very little of it with the content creators. This is changing, in large part due to a shift in dynamics. Savvy creators are realizing that different platforms have different strengths and weaknesses — and they are using each to their advantage. For instance, TikTok is especially good for discoverability, making it a good place to build an audience and possibly redirect them to a YouTube channel, where creators can make more money for a view. To attract creators, social platforms need to offer monetization incentives and other products that make finding and engaging audiences easier. Additionally, creators are starting to understand the importance of channels that they own and bring their content directly to their audiences. Even creators with millions of followers are at the mercy of platforms’ algorithmic changes. A hacked account — or a catastrophic takeover like Elon Musk’s purchase of Twitter — can completely shake the foundation of the creator economy. Increasingly, social media is a marketing platform for creators looking to cut out the middleman. With these factors looming large, the rise of Substack, old-fashioned email newsletters, blogs, and other channels that connect creators more directly with their audience are critical — and changing the way we think of the creator economy.