The false creator economy
They shoulder the risks, make platforms more sticky, and many of them work for free. It's no wonder platforms love creators.
The Dispash has been quiet due to work and family priorities. It’s why I’m always slightly suspicious of industry experts who spend vast amounts of time cultivating their brand on social media. Where do they find the time?
PS I’m testing out a few of Substack’s new buttons this week. Don’t like them? Just let me know and I’ll take them out of the next edition.
Onwards
Content without cash: the creator conundrum
A few years ago I gave a talk at my old college to a bunch of A Level students about embarking on a career in social media. The talk itself probably wasn't anything special, but at the end, one of the students came up to me and asked if I had any advice on how to make more money from his fashion-focused YouTube channel.
Given I'm spectacularly unqualified on the channel topic and YouTube has always been one of those channels I've never quite cracked, I was a bit doubtful I could add much value. Turns out I was right.
The kid had more followers than 2/3rds of the brands my team looked after and was earning a decent sum from regular brand endorsements that put my Saturday job at Electronics Boutique to shame.
Other than a bit of advice around not underpricing himself, and a few YouTube analytics tricks he didn't know about, there was very little I could tell him that he probably didn't already know.
I sometimes wonder if that student made a living out of his meticulously well-run channel, or whether he abandoned it. I hope he did carry on as his channel was successful.
He set out to make money from a side interest and did just that. He was, in many respects, unusual in that he actually made money. Many - or rather most - creators barely make enough to live off.
Are we all creators now?
At some point over recent years, influencers have morphed into creators. It's probably a better fitting name for a catch-all industry that covers everything from teenagers streaming video games through to podcasters and people posting Microsoft Excel hacks on TikTok. Not everyone can be an influencer. But anyone can be a creator.
It's an appealing idea: my potential audience is everyone with an internet-connected device. To be an influencer - or an influential voice, which is a better description - then you need to build up an audience to influence. Creators are more like Kevin Coster's Field of Dreams: build it and they will come.
Except they don't. At least not to the majority of creators. Spotify added 1.2m new podcasts in 2021. But Buzzsprout's podcast data from March 2022 suggests that 30 downloads in the first seven days is the median. Get more than that number and you're in the top 50% of podcasts. Podnews estimates 13% of downloaded podcasts are never listened to.
That's 600,000 creators who are creating audio content that is consumed by fewer people than their extended family, with the majority barely scraping into double digit listenership.
This is not just a podcasting creator problem. The top 1% of streamers on Twitch earn over 50% of the revenue. For every Mr Beast posting videos with over 1m views on YouTube, there will be thousands of other aspiring creators who barely crack 100 views. A thousand views will earn the creator somewhere between $2 and $12.
Hollywood stars make up a small percentage of professional actors but account for the majority of the sector's earnings. Similarly, the creator economy is made up of a few big hitters, some who earn good but not spectacular money, and a lot of people scraping to get by, plus those who don't earn much (or anything) but do it for enjoyment.
Creating as a career
Creating YouTube videos, TikToks, newsletters, podcasts or live games streams may sound more glamourous than working as a food courier but the employment challenges are similar in both sectors.
Sick days reduce the ability to earn. There's no workers' rights. Uber Eats does, though, do the marketing. Creators have to do that part of their job themselves. And unlike freelancers, who are engaged directly by clients, creators do not have the same relationship with the platforms.
Venture capital founder Li Jin summed up the state of affairs in The Economist:
"Despite directly contributing to the value of platforms by uploading content that engages users, creators resemble an underclass of workers, lacking the benefits and protections of employees or the share options that would let them benefit from platforms’ success. I’ve called these dynamics “taxation without representation” or “21st-century serfdom”."
Or, to put it another way, businesses such as Meta, Alphabet and Substack love creators. There is no risk to the platform itself and a lot of upside.
More content means more engaged users. More users means more ad impressions. More content means more monetisation opportunities. Social networks today - with the exception of LinkedIn - are far more viewing platforms than they are social media
Meta may be paying creators $1bn this year, but it’s a calculated cost, in the same way TV networks invest in talent. And that $1bn is still a drop in the ocean compared to the amount of content pumped onto the platforms each day.
Meanwhile, creators are forced out of necessity to hitch their wagons to platforms over which they have no control.
TikTok stars complain that their compensation is too low (and the UK shopping experiment will have done nothing to assuage those fears). YouTube is just about the only platform that has anything approaching certainty for payment
Many creators don’t have access to agencies or platforms with standardised rate cards for brand collaborations, making it hard to charge a fair price for their services. If it’s frustrating for advertisers, it’s doubly frustrating for creators.
The end result: creators are dependent on platforms they don’t have any control over and have very little support in terms of marketing, legal, finance and sick days.
They're also required to post a lot of free content that a platform can monetise before they start getting compensators , and have very little idea on what a fair price for their services is.
The house always wins
Jin thinks decentralisation will be the next step for creators. I’m not so sure.
It's time consuming enough planning, shooting, writing, and creating without having to worry about setting up token issues or the legal and moderation risks that come with owning their own platform instead of just utilising free tools.
As with other forms of media, those with the largest following and most capital will be the best resourced to set up a decentralised network or build their own platform from scratch, although there may be a middle ground monetising communities on Discord, for example.
The benefit of more advanced creator platforms lie in their centralised nature. Substack is easier to use than building your own platform and designing newsletter templates, as well as offering scale clear ways to monetise your following. Those who outgrow Substack can exit without penalty.
Uploading video to YouTube and or podcasts to Spotify makes it easier to reach existing audiences on the platform as opposed to building a marketing campaign that has to lure users onto a new platform as well as building the tech behind it.
The challenges for creators are the same as many other businesses: how do we scale, what's the trade off, and am I making enough money to make this work?
The answer to the last question will be no for many creators. That’s not to say they won’t in the future, but it’s a lot of time and effort to get to this stage. For many the slog won’t be worth it. Meanwhile, the house always wins.
Recommended reads
Inflation hits Facebook
It’s not just food and pantry staples that are going up in price. Social media CPMs (cost per thousand impressions) are going up to levels that are somewhat unsustainable. Recent data suggests its risen by 33% in two years. But it’s not just Amazon’s ad business has seen rising CPCs (cost per click), BVOD and other streaming is going up at a slower pace. TV is also rising. For smaller businesses, this will mean some very tough strategic decisions on where to spend their budgets. For advertisers investing in more traditional above the line channels, there’s the twin challenge of declining, fragmented reach and rising costs. LINK.
What’s an influencer worth?
Picking up on one of the points in the main article, knowing what “good” looks like for brands working with creators is often no more accurate than putting a finger in the air. US trade body the ANA has tried to set standardised metrics for influencer campaigns. The trouble with influencers, or creators, or however you refer to them, is they’re sold as able to be effective through the funnel. This is true to an extent, but many marketers don’t entirely know what part the medium plays when they commission campaigns or how they should measure. Clicks and views are easy than brand awareness but a looping TikTok video seen multiple times has a very different frequency to a single unique view YouTube video. It’s a start, even if it’s far from perfect. LINK.
Web3 is going great part 745
Minecraft has unequivocally rejected using NFTs on their platform. Noteworthy, as Minecraft - along with Roblox, Fortnite and other gaming platforms - is as close to a definition of the metaverse as you’ll find. NFTs should be a natural fit, but there are two problems here. The first is perception - heavy gamers don’t seem that keen on tokens. The second is more practical. Coding NFTs to work across multiple games is hard, if not impossible in some cases. Making a bracelet that could be transferred between Minecraft and Fortnite would require a lot of coding, assuming the two different businesses wanted to allow the transfer in the first place. LINK.
What is social media anyway?
Gen Z don’t seem to be too keen on any of the more public social media platforms, with the exception of TikTok. The same social platforms have continually downgraded connections with people over sticky engagement and are arguably more broadcasters than social media. We’re now at the 21st century equivalent of The Ship of Theseus: if a social network has all the features that made it social stripped out, is it still a social network? LINK.
Everything happens so much
How does a meme get born and become embedded across multiple communities. The story of the @Horse_ebooks account’s viral and evergreen Tweet encapsulates a lot of elements of how the internet works from a culture perspective. LINK.
Thanks for reading this far. Hopefully you’ve found it mildly diverting. Like what you’ve read? Forward it onto somebody and ask them to subscribe.
Playing us out this week: Kasey' Chambers’ live cover of Eminem’s Lose Yourself. Turns out what the world really needs right now is an eight minute alt-country banjo led cover of one of the most iconic rap tracks. The lyrics lend themselves surprisingly well to a folk-led approach, although once it hits around four and a half minutes, the gears shift quite considerably. One of those performances that genuinely needs to be watched on YouTube rather than listened to on Spotify.