What Is the Creator Economy, and How Does It Work?
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The creator economy is the system creators use to monetize internet content. Creators with larger audiences have more opportunities to make money in this economy. Anyone can join the creator economy by posting content online, gaining a following and using platforms with various business models.
Television, radio and newspapers were the main three options for consuming entertainment and learning new information for a long time. Eventually, however, the internet took over.?
Though many people still watch TV and listen to the radio, numerous use the internet to stream their favorite television shows or listen to their preferred music. It is also the preferred medium to read the news.?
The internet is a place for almost anything people love to enjoy, and since it is all in one place, it becomes a convenient way to consume content.?
As the internet evolves and continues to dominate, more people create content they enjoy rather than just consume it. As a result, people are designing, managing, producing and sharing their creations online. This trend impacts how content reaches audiences but also affects how people consume or understand the content.
All these factors have led to the creator economy.
Understanding the Creator Economy
The creator economy is an economic system designed and boosted by content creators. Anyone that creates content meant for internet audiences (or businesses online) is part of the creator economy.?
These individuals own their creations and determine how they want to share content with others.
The content found in the creator economy ranges from digital books to videos to online games. Creators in the creator economy make money on these pieces of content by:
Who Participates in the Creator Economy??
For some, the creator economy is a haven to specialize in something they care about, are an expert at or know others will enjoy. Instead of doing their favorite activities as a hobby, certain people who make their money in the creator economy live their dreams by making money from these same activities.
The creator economy is full of different types of people and personalities. Content creators can become influencers that affect how their large following of people choose to purchase or act. Other content creators create content for entertainment purposes only.?
Anyone that makes content designed for audiences online is part of the creator economy. This would include:
Some also include marketplaces that sell creative talents online, such as Etsy or eBay, as part of the creator economy.
How Does the Creator Economy Work??
Content creators use their content to communicate and share information with their audiences. This includes information designed to educate, persuade or entertain.?
Audiences will pay for the content or engage with it in another way to generate monetary support for the creator. Additionally, audiences might purchase from the brands and companies the content creator is endorsing to support their favorite creators.?
The creator economy is an ecosystem between brands, advertisers, creators and consumers. There are standard business models within the creator economy, including:
Tech companies are still creating new business models for the creator economy, which shows that the market will continue to change.
To make money, creators rely on their audience members to consume and interact with their content. Content creators will grow and maintain their audience base by connecting with audience members, and continuously delivering desirable content.
Is the Creator Economy Here to Stay??
The creator economy is strong because of tech companies competing for ways to monetize their platforms and create a business model for creators (and consumers) to use. For instance, YouTube and TikTok have become powerhouse platforms for this purpose.?
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They have completely altered how audiences find and consume content. More people that use these platforms as consumers show interest in becoming content creators, which feeds the cycle and strengthens the creator economy.
Brands partner with influencers as part of a marketing campaign due to the popularity of these platforms. When consumers hear about a brand, product or service from their favorite influencers, they feel more inclined to act.
As more business models develop, the creator economy will continue to grow.?
“Yes, this industry feels like it's quite saturated, but it is not oversaturated,” influencer Rene’ Daniella told Brandi Fowler of LinkedIn News. “At the end of the day, the way we are consuming social media and digital content as a society is rising. So, don’t be discouraged because you see so much content out there.
“You have a voice, You have an opinion, you have your own unique experiences, which influence what you have to say and share on a topic. You never know who you will influence or inspire through your content pieces. As you [continue], you'll learn invaluable information, and any failures you might think you've experienced are just lessons and opportunities for you to learn new skill sets and market research.”
Platforms Used in the Creator Economy
More platforms continue to develop and grow to attract more content creators, especially since the creator economy is becoming so popular.
Different platforms exist for different types of creators and their content styles. For instance, live-streaming creators benefit from using Twitch or Mixer as their platforms rather than Tumblr or Pinterest because of their content type and target audience.
Social media platforms are a common place for creators to start, but it depends on the type of content you plan to make. Examples of social media platforms that offer payment for top content creators include:
However, there are some more general platforms available that benefit many types of content creators. Choosing the best option depends on which business model they prefer. A few of the most popular platforms include:
Entering the Creator Economy
If you’re considering joining the creator economy, now is a great time to begin. More platforms and opportunities to create a personal brand and develop unique content ideas are available.?
Remember that only about 41% of creators make their entire living from content creation at $69,000 a year or more. Only the top 1% of creators (such as celebrities) make $100,000 or more from a single post. This means that the creator economy is not a place to make a fortune overnight, and it takes a lot of time to demand your audiences' attention.
The earnings that a creator takes home depend on:
To join this economy, create and post engaging content about topics you care about.
Think about the content you and others like you enjoy on your favorite platforms. Austin Belcak, the founder of Cultivated Culture, makes a great point about how not everyone will love every piece of content a creator posts, but it still benefits them to gain visibility and grow their brand. If you’re concerned about this, it may help to look at what your favorite creators do for inspiration but don’t copy their ideas; come up with creative alternatives or something original.?
Understand the algorithm for any platform you use and determine which audience will most likely interact with the content you create. Remember to post regularly on a schedule to increase how many people see your posts and channel.
After you gain enough followers, you can start monetizing your brand through business models that appeal to you the most.?
“Think about what difference you want to make, how you can be impactful,” influencer Rachel McCord told Brandi Fowler of LinkedIn News. “There are so many different areas you can go into. So, if you focus on being impactful, it is bigger than simply being an influencer because it carries more weight, and [your influence] is more purpose-driven.”
Top Takeaways
What is the creator economy, and how does it work?
(Reporting by NPD and Brandi Fowler)
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