"Ask a kid today in the U.S. what they want to be when they grow up. No longer is musician or athlete the top answer. It's a YouTuber—an answer 3x more popular than an astronaut," reported Forbes.
I mean, sitting in a small dark room, going to different worlds, talking to far-away people on a headset, not seeing your friends and family for months on end...they don't sound too different really. I guess that Youtuber probably wins out only because you get to wear your PJs while you're at it.
In fact, 50M people will soon consider themselves to be creators. So, these dreams don't seem too unfathomable.
And with more and more funding options for creators, outside the traditional ad revenue and reliance on platforms, a decentralised and community-focused creator economy seems all the more likely.
But let's start with some definitions. What even is the creator economy?
Well, the term 'creator economy' refers primarily to the monetisation of work made by independent creators.
From vloggers to streamers, to influencers, to YouTube dog chefs, the creator economy implies a shift in the dynamics of power in entertainment.
This also encompasses the companies supporting these creators, from brand deals to creation tools and analytics platforms. Anyone who makes, or benefits from, independent content creation is affected by the creator economy.
"For years, the creator economy was based around earning money through ad revenue sharing and brand sponsorships. The sponsorship market reached $8 billion in 2019 and is estimated to hit $15 billion by 2022."
- Mediakix 2021 research
But right now, the creator economy appears to give creators more agency. Rather than constantly trying to keep up with changing algorithms, or brands, they can rely on income from loyal supporters. This means deciding how, and when, they take on work. And the income goes straight to them.
So, let's have a look at the current state of the creator economy, where creators are making their money, and what the future for creators looks like.
The Creator Economy and...Investment and Funding
- Investors poured a record $1.3 billion into the creator economy space in 2021
- There’s even been a stronger middle class, with 41% of creators earning a living wage ($69,000 annually or more) year-over-year.
- Social platforms introduced creator funds in 2020 as a measure to bring creators onto platforms. TikTok led the charge with its $200 million fund.
- In November 2020, Snap started shelling out $1 million daily to creators who used its short-form video feature Spotlight. (The company announced in December that it had paid out more than $250 million in 2021 to 12,000-plus creators.)
- In June 2021, Meta, which was still called Facebook at the time, threw its hat in the ring by announcing its $1 billion investment in programs to give creators more ways to earn money.
- 31% of creators cited influencer marketing as their main source of income.
- Creators' main source of income is brand deals (31%), followed in second place by their own brand/business (25%) and creator funds (15%)
The Creator Economy and...The Leading Platforms
- Half the professional creators (one million approximately) earn their money on YouTube, with 25% (500,000) making their money via Instagram (predominantly as influencers)
- One sizable platform for professional creators is Twitch, with 300,000 professional streamers.
- The remaining 200,000 (approximately) earn their creator income from other sources, such as acting, music, podcasting, blogs, writing, and illustrating.
- 2,187,107 U.S. creators earned $4,004,000,000 on YouTube
- 5,639,996 U.S. creators earned $460,100,000 on Instagram
- 9,796 U.S. creators earned $87,147,723 on Twitch. As all three social network statistics were up considerably on the previous year's figures, current figures are likely still higher.
- 177,042 U.S. creators earned $220,447,368 on Amazon Publishing
- 928,343 earned $1,458,513,952 on Etsy
- 4,851,266 earned $347,737,771 on WordPress blogs and websites.
The Creator Economy and...Creator Categories
- According to a 2021 report from App Annie, more than 70,000 fitness and health apps launched globally in 2020.
- McKinsey states that 92% of consumers who tried online shopping in 2019 became converts, and discretionary spending is spiking on apparel, footwear, travel and the newly entrenched “homebody economy.”
- According to Skift’s Lebawit Lily Girma, post-pandemic brand marketing dollars will favor those in the creator economy who get “hyper-creative, hyper-local and hyper-talented.”
The Creator Economy and...Mega-Influencers and Professional Creators
- 2 Million Global Creators Make Six Figures
- More than 50 million people worldwide consider themselves to be creators. Of these, 46.7 million think themselves to be amateurs, with two million-plus considering themselves to be professional creators, earning enough from their passion to consider it their full-time income.
- Teachable released data relating to the creators on its platform in 2020. They observed that creators earned a total of $456.7 million.
- They launched 183,744 new courses and 17,686 coaching products in that year. The average price of a coaching product was $167, and the average one-time payment for a course was $120. Teachable hit the milestone of having $1 billion in creator sales in 2020.
- 22 Thousand YouTube Creators Have More Than 1 Million Subscribers
- 500,000 Instagrammers Have More Than 100,000 Followers
- 300,000 + Twitch Streamers Are Either Partners or Affiliates
The Creator Economy and...Micro-Influencers and Amateur Creators
The largest group of amateur creators (30 million) makes their money as Instagram influencers, although there is also a sizable number of YouTubers making some money (12 million).
MBO Partners has classified participants in the gig and creator economies are independents and splits them into:
- Full-time independents – people who work more than 15 hours per week doing their chosen activity, who don't plan on altering it for the foreseeable future
- Part-time independents – those who regularly work for less than 15 hours per week at their chosen activity as a way to supplement their other income
- Occasional independents – those who work at their chosen activity sporadically but do so at least once a month.
This generation of micro-entrepreneurs is currently valued at $20 billion with estimations that it could grow to a $104.2 billion market in 2022 — with $800 million in venture capital invested in these creator ventures year over year.
YouTube alone is expected to generate $30 billion in revenue by the end of this year from self-made entrepreneurs.
The Creator Economy and...Community Support
- According to a survey from the ad agency Wunderman Thompson, 73% of Gen Z Americans want a brand that understands them, and 76% want a brand that’s accepting of different identities and experiences, which is precisely where content creators at various levels of reach are bridging the gap.
- 58% of users say that, in the next 12 months, they would pay a monthly subscription fee between $1 and $15 to access their favourite creator's exclusive content
- 63% of users have tipped creators at least once
- What drives users to support creators: (1) they try to support them in any circumstances, (2) they feel inspired by the creator, (3) they trust (almost) everything they advertise
- $21 Million Estimated Monthly Payouts on Patreon
- 52% of Creators Spent 0-39 Hours Per Month Devoted to Social Content
The Creator Economy and...Creator Struggles
- Half of Consumers Use Ad-Blocking Technology
- 97.5% of YouTubers Don't Make Enough to Reach the U.S. Poverty Line
- Ad Revenue for Creators has Declined by 33% During COVID
- 77% of creators still earn their revenue from brand deals
This post is part of our Martech stats series, which compiles key data and trends. Others include: