🤑 creating content is for the 1%
The growing GDP of the 'creator' economy and how talent & taste influence it
The internet has enabled us to pursue our passion and turn that into a financial reward of some kind, and that can be anything from making a bit of money on the side to making a decent living - see much-hyped Passion Economy.
But it’s still a game for the 1% 💸
People creating physical products and selling on Etsy and Shopify are prime examples of the commercial side of the passion economy. What could previously only be done at the level of a craft market can now be done on a global scale, and that's the case for the millions of people around the world selling their wares on those sites.
So when you look at creators using online tools to post creations to sell or monetize (whether that's Etsy sellers or YouTubers or creators on Twitch…) the overall picture is another story of the top 1% of the 1%. A study done last year showed that there are about 17 million such creators in the US, with aggregate earnings of $7B, but fewer than 1% of those 17 million earn $10,000 or more per year.
Of the 30 million+ YouTube channels only about 20,000 or so have a million subscribers or more, which is where one needs to be to be 'in the game', so to speak, and in that 20,000 figure are the broadcasters and media organizations and recording artists who are already major brands, with infrastructure and marketing budgets, so that's now a really challenging place to make one's mark.
Here's an example of the distribution of views on YouTube for 2019. I think people tend to think there are more YouTube stars or YouTube millionaires than there actually are, but the numbers show that close to 90% of videos posted get under 1000 views and not even 3% get between 10,000 and 100,000 views. And to get over a million views puts you in the 0.1%. I think people think there are a lot more PewDiePies out there than there actually are and these numbers back that up.
The bright side of these stats is that there are hundreds of thousands of people in the US alone able to earn at least a nice 'side hustle' level of money, if not a living, doing things that were either not doable from a logistical point of view or not feasible in the sense that a broadcaster or publisher was probably never going to give them the go ahead to do a show or write a column.
Importantly, the GDP of the ‘creator’ economy is expanding 🥧
1% of artists are getting 90% of streams. But the more important stat is that that 1% is now 16,000 artists and the 99% represents about 160,000 artists. A huge uptick compared to the previous world.
more & more consumers becoming creators and curators (with ↑ incentives & easier tools)
better methods to monetize creative output online
higher willingness to pay online creators
In terms of how that $ will be distributed, we will likely see a flattening of the head, with wealth being distributed more equally across creators. However, only slightly. 😢
We’re seeing an obvious shift to a more creator-centric model. Patreon estimates that their creators will be earning at least $1 billion a year. A story about AWAL recently reported that somewhere between about 100 and 300 of the artists on AWAL earned over $100,000 last year and that AWAL's parent organization, Kobalt, believes there could be as many as 100,000 artists in this tier in the next five 5 years.
Markets naturally pick winners and talent is distributed by a very skewed power law. Most people only want to see content from the best creators. And we generally have similar assessments of what the best is.
However, what constitutes content, talent, and even creation, has never been more voluminous or varied. And at the center of all of this is the question of taste.
For the first time, possibly ever, we're seeing all tastes represented, expressed, distributed, and consumed. Wattpad is a good example with its (very) long tail of sub-genres. Everything from Christian zombies and vegan vampires to angry mermaids, and more recently angry mer-men. TikTok is another great example. They’ve helped to keep a huge range of distinct subcultures, with their different tastes, separated. And in the words of Eugene Wei: “one person’s cringe is another person’s pleasure, but figuring out which is which is no small feat”.
With platforms’ higher resolution of taste preference, creators have more opportunities and more choice between monetizing by earning a little off of each fan from mainstream content or earning a lot off of deeper connections with a smaller set of fans through niche content (see SignalFire’s recent report).
In the end, it comes down to curation. Curation involves multiple vectors, and taste is the term for the component vectors of curator preference. As soon as taste enters the definition of talent, so does distribution and market segmentation. The idea that creation is for the 1% and the winner-takes-all $ dynamic relies on creators being judged simply by an excellence (or talent) standard. And curation only determines the size of the $pot. But when creators are judged by a taste standard, curation and creation are intertwined. And we’re seeing more of that now than ever - and with that, we’ll see large welfare gains and more opportunities for people to make $ creating and curating online.
- Jad & Leora with thanks to Prof John Deighton
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