Although influencers come to mind when we hear the term "creator economy," this market extends beyond social media stars with millions of fans. Consumers — hungry for authenticity — support independent creators as they monetize their creations, personal brand, or skills. Indeed, more than 50 million people worldwide report being independent creators.
But what is the creator economy, and how does it work? Discover how entrepreneurs use the creator economy to turn their passions into revenue, and learn why SignalFire calls it the "fastest-growing type of small business."
What is the creator economy, and how does it work?
In the creator economy, creators make money directly from their audience. It consists of consumers, entrepreneurs that cater to their audience, advertisers, and companies that market to artistic entrepreneurs.
Platforms like TikTok, Teachable, and Patreon connect creators to consumers. Other businesses, such as analytics software and content creation tools, support independent creators. And, of course, consumers looking for unique niche content are willing to pay money to be a part of a community dedicated to their passion.
More than two million professional individual creators make content full-time, and around 46.7 million do it part-time, according to SignalFire. These include innovators wanting to pursue artistic activities, such as musicians, writers, craftspersons, and animators. Many creators rely on third-party platforms to build a following, and Influencer Marketing Hub said social media remains the "primary conduit for creators to distribute and monetize their work."
Creator economy platforms include:
- YouTube.
- TikTok.
- eBay.
- Etsy.
- Instagram.
- Facebook.
- Twitch.
- Mixer.
- Tumblr.
- Substack.
- Gumroad.
- Teachable.
- Spotify.
- Pinterest.
- Amazon Publishing.
- OnlyFans.
- Patreon.
- WordPress.
- Medium.
Many creators rely on third-party platforms to build a following, and Influencer Marketing Hub said social media remains the "primary conduit for creators to distribute and monetize their work."
How do creators earn money?
Creators earn money by monetizing their artistic activities, knowledge, or skills. Developing an avid base of supporters can turn a creative side hustle into a full-time business. But there isn't a one-size-fits-all way to make money. Gaming livestreamers may leverage Twitch and Mixer, whereas videographers monetize YouTube and TikTok. In each case, creators share earnings with the marketplace or platform.
CB Insights reported, "Substack writers take home 90% of subscription revenue" and "Patreon creators get paid between 88% to 95% of their subscriptions." Brand partnerships also generate money for creators, from shoutouts during a livestream to sponsored blog posts. You can monetize your website, email newsletter, and more with a solid strategy.
However, according to Influencer Marketing Hub, "97.5% of YouTubers don't make enough to reach the U.S. poverty line," and "the vast majority of creators on Patreon make between $1 and $100 per month from the platform." Hobbyists wanting to pursue creative endeavors may be thrilled with funding that covers their supplies. It only takes 100 loyal supporters or super fans spending $100 a year to earn $10,000. But, 1,000 engaged followers can get you closer to pursuing your passion full-time if you're looking to quit your day job.
Revenue-generating activities in the creator economy include:
- Online courses.
- Livestreaming.
- Newsletters.
- Coaching and consulting.
- Merchandise.
- Affiliate links.
- VIP meetups.
- Ad revenue.
- Subscriptions.
- Book and e-book sales.
- Sponsored content.
- Fan clubs.
- Tipping.
- Non-fungible tokens (NFTs).
- Live and virtual events.
- Podcasting.
- Product placement.
- Crowdfunding.
- Speaking engagements.
[Read more: How to Monetize the Metaverse: Big Brands' Tech Partners Share Tips]
Succeeding in the creator economy
If you post on social media, you may already be part of the creator economy. However, getting likes and shares isn't the same as monetizing Facebook. While social channels are a good start for any small company, turning a side hustle into a full-time business requires a comprehensive plan.
Succeed by developing a brand strategy that identifies solutions to creators' main barriers. Podia said the biggest challenges include audience growth, time constraints, and "how to monetize their work." The right tools can help you automate sales and marketing tasks, freeing up your time for engagement and artistic activities. Moreover, your approach should outline multiple revenue streams, ensuring you're not beholden to one online platform.
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