IN THIS ARTICLE
- What Is the Creator Economy?
- How Does the Creator Economy Work?
- What Does It Mean To Be a Creator?
- How Do Companies and Brands Fit In?
- The Rise of Creators
- Creator Economy FAQs
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After being accepted to the prestigious Parsons School of Design, and earning a merit scholarship worth over $100,000, Sharon Yeun Kim was barraged with messages from social media users who wanted to know how to submit a winning application.
Kim—a graduate of Springboard’s UI/UX Design Career Track—soon decided to start her own YouTube channel, where she shares videos offering advice on how to ace a design challenge, build UX case studies, and choose a bootcamp. The purpose of her channel, she says, is to create transparency around what it takes to become a successful UI/UX designer.
When Kim recently landed a summer internship at Amazon, she posted a video detailing how she walked the hiring manager through her UX portfolio. “I want to show aspiring designers that whatever they’re struggling with, I have been in that position, too,” said Kim.
Kim is part of what’s known as the creator economy and is an excellent example of how creators are carving out a new niche in the digital landscape. Want to learn more about how the creator economy works, how creators like Kim make money, and why this billion-dollar industry is only getting bigger? Then keep reading.
What Is the Creator Economy?
The creator economy is comprised of the side hustles and independent businesses built by content creators, social media influencers, bloggers, and videographers. According to venture capital firm Signalfire, over 50 million people worldwide consider themselves independent creators.
The creator economy also encompasses a broad swath of businesses that support creators, including companies that provide content creation, web analytics platforms, and website hosting services.
How Does the Creator Economy Work?
The creator economy represents an ecosystem of creators, consumers, and advertisers. Creators rely on people to consume their content so they can attract advertisers, who pay them in exchange for promoting products to their audience through sponsored posts, product placements, and shout-outs during live streams.
Research shows that millennials don’t respond to traditional advertising, which makes influencer partnerships a crucial part of a brand’s marketing strategy. Creators can also sell content such as ebooks, courses, podcasts, and newsletters on their own website in exchange for a monthly subscription, pay-per-view, or donation.
Social media networks remain the primary conduit for creators to distribute and monetize their work. Creators receive a percentage (anywhere from 55-100%) of ad revenue generated by their content, and many “creator-first” platforms have emerged to help influencers pocket more of their earnings. For example, a creator-first platform like Patreon enables micro-influencers to accept subscription fees, donations, and crowdfunding. These platforms take a small cut (typically no more than 20%) of a creator’s earnings in exchange for publishing, hosting, and paywalling their content.
Finally, publisher advertising networks and influencer agencies broker deals between advertisers and influencers for sponsorships, referrals, and endorsements. These partnerships allow advertisers to build brand awareness with audiences they wouldn’t otherwise reach through traditional advertising, while also enabling creators to earn commissions for sales they helped generate.
What Does It Mean To Be a Creator?
Creators produce videos, blog posts, photography, artwork, audio content, and other digital assets. Being a content creator can be a side hustle or a full-time business.
The most effective creators provide their audiences with candid advice they won’t find elsewhere. For example, Rahil Jetly, a former Springboard employee, started a podcast called The Actual Job to raise awareness about lesser-known jobs, such as being a corrosion engineer or a lighting technician.
Ways To Make Money
As a creator, the first step to earning money is to post high-quality content and build a base. Creators can upload their content to social platforms to receive a share of ad revenue, accept donations on creator-first platforms, or monetize content directly on their own website.
For podcasters, sponsorships are the most common way to make money. This means creating an ad spot to promote an affiliate offer or including a mention of a product or service as part of regular content. Brands provide a tracking link or coupon code so the influencer receives credit for sales they generate. Podcasters can also accept crowdfunding and donations through podcast hosting platforms.
Influential podcasters can charge a subscription fee for exclusive content, such as additional interviews, behind-the-scenes content, or an ad-free version of the podcast.
Bloggers can make money through ads, affiliate marketing, sponsored posts, and selling other services. For example, freelance copywriter Elna Cain runs a blog about freelance writing, which she also uses to promote her copywriting, SEO, and email marketing services.
Bloggers with a sizable following can join an ad network to host ads on their site. Most of these networks use targeted ads, meaning the ad changes depending on the viewer’s recent site activity, which is tracked using cookies. Bloggers can also join affiliate networks to promote a company’s products using a tracking link. The blogger then receives a commission when someone makes a purchase via their link. Professional writers can also offer paywall-restricted newsletters on their own website, or through content platforms like Substack.
One of the most common ways to monetize video content is to upload videos to YouTube. Creators must have at least 1,000 subscribers and 4,000 watch hours in the past year to apply for YouTube’s Partner Program, which allows creators to monetize their channels through ads, subscriptions, and channel memberships. YouTube takes a 45% cut, and the creator gets the rest. Video creators who specialize in tutorial videos or video lessons can monetize their content directly by putting videos behind a paywall on their website.
Influencers are social media personalities whose authority has the power to affect their viewer’s purchasing decisions. Brands hire influencers to create sponsored posts or to serve as brand ambassadors. Instead of promoting a brand through a one-off sponsored post, brand ambassadors regularly discuss the brand’s products to generate brand awareness, usually in exchange for a monthly stipend.
Art & Design
NFT (Non-Fungible Tokens) marketplaces and stock image sites allow creators to sell digital art, photography, and video in exchange for royalties or commissions. While homeschooling her five children, generative artist Melissa Wiederrecht made extra income by contributing seamless patterns to stock image sites. Selling art online is a “numbers game,” says Wiedderecht, a graduate of Springboard’s Data Science Career Track. She currently has over 24,000 images for sale on Shutterstock.
“It’s totally possible to make a full-time income creating, uploading, and selling seamless patterns on Shutterstock,” said Wiedderecht. “I’m not there yet, but it’s totally possible.”
How Much Money Can a Creator Make?
While the top 1% of influencers earn six figures for a single sponsored post, just 41% of creators make a living wage ($69,000 or more annually), according to Stripe. Major influencers—typically celebrities, like soccer player Cristiano Ronaldo or actor Dwayne Johnson—can command over $1 million for a single post.
A creator’s earning potential largely depends on the type of content they create (lifestyle content is the easiest to monetize), the size and demographics of their audience, how regularly they post, and which platforms they use to distribute their content.
How Do You Become a Creator?
Before thinking about monetization, start by creating and posting engaging content about a topic you care deeply about. Formulate a content strategy and use a mix of content categories such as courses, newsletters, podcasts, and short-form videos.
“The real secret sauce is finding the kind of content that people want and getting it out there,” said Roger Huang, director of growth at Springboard. “Then there’s this layer of understanding the algorithm and learning how to grow your audience.”
Next, finalize a posting frequency and schedule for increased visibility. Once you’ve reached a certain follower threshold, join an affiliate program or apply for an official creator account on the platform of your choosing. This gives you opportunities to access creator funds, partner with brands, and increase exposure.
Creators Worth Following
Top creators offer relevant content in a specific niche, post regularly, and find ways to start conversations with their audiences. Here are a few examples.
- Patrick Shyu. This ex-Facebook engineer went viral after posting a series of videos exposing the company culture. Shyu posts a mix of educational videos about learning how to code while also sharing videos about his personal life.
- Delyanne Barros. A former employment attorney turned self-made millionaire, Barros is an investing coach who creates courses, podcasts, and blog posts to teach people about long-term investing in the stock market.
- Liza Koshy. Comedian Liza Koshy is one of the most-followed YouTube stars, and is admired for using her platform to raise awareness about issues like voter registration.
- Michelle Lewin. One of the biggest stars in the fitness industry, Michelle Lewin offers content for fitness enthusiasts, including workout videos and health tips. She also diversified her source of income by acquiring a line of supplements and releasing two mobile apps offering personalized workouts and meal plans.
How Do Companies and Brands Fit In?
By working with content creators who are trusted by their fans, businesses can piggyback on an influencer’s credibility. Businesses usually partner with influencers who have a following that they’re trying to reach.
A study by influencer marketing firm Tomoson found that 59% of digital marketers surveyed planned to increase their influencer marketing budget over the next 12 months. Micro-influencers are especially appealing to small businesses because they minimize a campaign’s advertising cost per action, while still widening a brand’s reach. On average, brands spend around $174 for each piece of content that an influencer generates.
While follower counts were once the prime metric businesses used to select influencers, today brands use more sophisticated evaluation criteria to understand an influencer’s audience and how to engage them.
The Rise of Creators
While influencer marketing was once dominated by major celebrities and corporations, “micro-influencers” have taken social media by storm. Unlike traditional influencers—who have millions of followers, and whose end goal is to score lucrative brand endorsements—micro-influencers share their expertise with a smaller audience through tutorials, how-to guides, and day-in-the-life vlogs. The focus is not on selling a product or aspirational lifestyle but on becoming a thought leader in a niche area.
Since micro-influencers are far less expensive to partner with, small businesses can now hire influencers to market their products to a niche audience.
Let’s dive deeper into how the creator economy first emerged, and where the industry is headed in the coming years.
A History of the Creator Economy
The “formal” creator economy emerged circa 2012, as platforms like WordPress, YouTube, Instagram, and Facebook empowered everyday people to cheaply produce and distribute their content. While social media giants originally relied on free user-generated content to attract advertisers, creators began demanding compensation for bringing traffic and ad revenue to these sites.
Creators also began to get “discovered” on these platforms. Singer-songwriter Shawn Mendes and pop star Justin Bieber each showcased their talents on Vine and YouTube respectively, further affirming that creators could become lucrative assets to both brands and the platforms that host their content. The term “creator” was coined by YouTube in 2011—as an alternative to “YouTube star”—to describe users with a large subscriber base who weren’t “celebrities” in the traditional sense.
Creator Economy Trends
Many creators are not content to make their living off of inscrutable social media algorithms. So many creators have begun hosting their content on their own websites. The most successful creators are becoming founders, building teams, and assembling tools to help them start businesses so they can focus on their creative endeavors, or use their star power to promote their existing businesses.
“We still have those big-ticket social media stars with 50 million-plus followers,” said Huang, “but now that we’ve vastly reduced the cost of content creation, there’s a new paradigm where more and more people will be able to build things they love, put their content out there, and get rewarded for it.”
Meanwhile, social media giants are launching creator funds to lure influencers back to their platforms. They’re now promising better monetization tools, live events, opportunities to partner with brands, and direct compensation. In November, Snapchat began giving away $1 million a day to content creators who posted on the app’s Spotlight feature, which functions similar to TikTok. Dominic Andre, a mental health therapist turned TikTok science video creator, earned $966,546 last year from Snapchat’s Spotlight.
The Future of the Creator Economy
If creators have their way, they’ll soon be regaining financial control. The creator economy attracted over $1.3 billion in funding last year, but the lion’s share went to social media companies and publishing platforms rather than the creators themselves.
Platforms that fail to offer monetization options stand to lose their creators. Vine—a now-defunct video-sharing app acquired by Twitter in 2012—went out of business after creators abandoned the platform en masse because the platform lacked a monetization tool.
Creator Economy FAQs
How Big Is the Creator Economy?
Influencer Marketing Hub says that the creator economy is now worth $104.2 billion and that it will continue growing at a similar rate as the overall gig economy.
Is the Creator Economy a Fad?
No. The creator economy has exploded in recent years, and recent industry predictions indicate that the market is growing rapidly. Not only are creators becoming their own businesses, but startups are rushing to make tools and services to help creators manage these enterprises. Moreover, the fact that creators are establishing new monetization models, rather than being dependent on platforms, will help make the creator economy more sustainable and will enable creators to earn more for their work.