Compete or Coexist? Social Media and the Creator Economy
The Creator Economy is on fire. With all the buzz about the spotlit creator economy, and new creator-focused companies popping up left and right (the more the merrier) — it’s becoming increasingly clear that we are headed for an era of innovation in models that reward the ultimate contributors, creators. Further, this week Influencer Marketing Hub pegged the greater creator economy space at a whopping $100 billion — a figure only expected to grow.
The social media giants (Instagram, YouTube, TikTok, etc.) have allowed so many of us creators to find new ways to express ourselves and build audiences of millions. As creators gain popularity, these platforms have built lucrative ad businesses that incentivize building bigger and bigger audiences — with most of the value created being retained by the platforms.
Meanwhile, in the past year or so, investors and entrepreneurs have also noticed that creators — artists, personalities, comedians — are increasingly turning content creation into full-time jobs and looking for new tools to empower them to do so. In parallel, we’ve seen the fans demonstrate an increased willingness to directly support — monetarily — the folks they watch/interact with everyday. This has given way to an influx of new creator tools that support direct monetization.
The question is — who will own these creator tools? New creator focused platforms have taken off in the past few years — from OnlyFans, to Patreon, to Substack. Almost certainly in response to this explosive growth we’ve seen a slew of announcements from the social media giants that new tools are coming. Will the incumbents be able to squash the newcomer creator platforms?
History suggests no. This posturing from the big platforms is not new. YouTube announced paid subscriptions in May 2013, the same month Patreon launched. In the time since, YouTube has become a dominant force in the media landscape — but Patreon has grown to a $4 billion valuation as the go-to choice for YouTube creators looking to monetize, despite YouTube’s built-in solution. In 2016, I personally joined creator focus groups for IGTV that promised better monetization solutions for creators that ultimately never panned out.
New platforms are succeeding because they are developing features not for your largest audience but for your strongest audience. Building for this north star leads to fundamentally different product decisions. There are several core features needed to build for your strongest audience:
- Focus on the creator, not the content — The social media giants are focused on pieces of content — serving the latest viral tweet or an algorithm for an infinite stream of videos to keep you glued to your screen (TikTok, YouTube). Whereas these new creator-centric platforms are focused on the relationship between a specific creator and their audience (Patreon, OnlyFans).
- Cater to a subset of the creator’s audience — Creators amass followings for a variety of reasons. Platforms that are able to double down on serving the interests of a specific subset of the creator’s followers will succeed in migrating them over so the creator can best engage with this subset without alienating their broader fanbase. Depop, for example, has thrived in capturing the creator’s audience specifically interested in their fashion.
- Create new ways for fans to engage — These new platforms also provide creators’ fans with materially new ways to engage. One of the best examples of this is Cameo, which brought the “digital autograph”, a deeply personalized experience previously unattainable, on a public feed.
These features are not focused on building a wider audience, but instead deriving increased value from a core set of users. Such a path runs counter to the ad-based models that are dependent on reaching as wide an audience as possible. To develop for stronger rather than larger audiences, risks the lucrative ad models that made these social giants so successful in the first place.
In the end, these creator platforms will exist symbiotically alongside YouTube, TikTok, Facebook. These social media giants will continue to mint new creators and attract them with wide audiences, driven to consume. But as more creators are minted, and as monetization and fan-engagement opportunities become available elsewhere, creators will continue to leverage new platforms to diversify their revenue streams. This will lead to targeted audiences (ie. the top fans of these creators), shifting their focus to these new platforms, where they’re offered more experiences, more authenticity, and more connections with their favorite creators.
Ultimately, what we’re seeing in bloom is a wonderful ecosystem, where the current major networks can continue to thrive on the ad-model, and continue to seed new creators. Where we come in (creator platforms), is embracing this apparent evolution by building new environments for fans and creators who have graduated from the ‘kick back and consume’ mentality, and are looking for the next iteration of creator-led social — a place where creators can devote more time and energy to creating and engaging with their most supportive fans.