The age of creator economy is upon us. In the digital age, mixing the right niche and combining it with passion can translate into a daily job with an above-average salary for millions of people.
Information overload. Privacy concerns. The banality of content. Addiction, peer pressure, annoyance… Those are just some of the main reasons why people decide to quit Facebook. The social media giant isn’t exactly in trouble yet, but signs of decline are already here. The numbers of users are down in the US and Canada, and it’s definitely not on the list of young people’s priorities. The overload of grumpy users spreading fake news doesn’t exactly scream fun. Could Facebook be “getting old”?
While it’s still the most popular social network, it does look a little lost in the age of the creator economy, amplified by the current pandemic. If a netizen wants to connect with engaging content, Instagram would be a better match. And if they’re keen to follow the niche that hits their sweet spot, it’s easier to find than ever.
Less is becoming more
Creator economy in the digital space isn’t a new phenomenon. YouTube, Blogger, and Medium led the way years ago, and today: just make your pick. Interested in curated newsletters from your favorite writer? Substack. Keen to learn while driving? Podcasts. Like to put your money where talent is? Patreon. And then there’s TikTok, Twitch, OnlyFans, and so much more. These platforms are not only redefining how and what content masses consume, but they are also changing the future of work. They eliminate the gig economy’s uncertainty and instead let creators build a steady base of supporters willing to pay for their niche of choice.
If something seemed like a very unlikely profession ten years ago, the chances are that today, it’s a standard. According to SignalFire, more than 50 million people worldwide are creators: vloggers, podcasters, gamers, bloggers, and writers. Almost one-third of American kids want to become YouTube stars when they grow up, similarly to their beloved idols.
Traditional platforms have always favored quantity: the more followers and views you have, the more you get paid. Today’s creator economy is synonymous with the so-called “passion economy”, where all you need is to find your niche and a couple of those who will consistently pay attention. As Kevin Kelly of Wired famously said back in 2008, all you need is 1000 true fans who pay 100 USD a year for your content to reach a decent salary.
Li Jin, Founder and Managing Partner at Atelier Ventures, takes this theory even further and suggests it’s perfectly possible to monetize as little as 100 superfans. She points out that the pattern is already apparent throughout the platforms, and individuals are willing to pay more than ever to support their favorites. Jin uses Patreon as an example: the average initial pledge amount has increased 22 percent over the past two years, and since 2017, the share of new patrons paying more than $100 per month has grown 21 percent.
The digital middle class
Allowing creators to capitalize on loyalty instead of quantity is crucial for solving a problem society already knows very well: diminishing middle class. As Jin analyses in her deep dive for Harvard Business Review, “sustainability of nations and the defensibility of platforms is better when wealth isn’t concentrated in the top 1%”. She mentions Spotify that infamously doesn’t provide a living wage for the vast majority of its artists. Only roughly 1.4 % of all artists make 90 % of royalties. Don’t think they are swimming in wealth either – it translates to only 22k USD per artist per quarter. For the rest of the artists, revenue from Spotify can be barely pocket money.
Platforms that are similarly carried by a few superstars walk on thin ice. If a talented creator can do better somewhere else, they are easily lured with financial and creative incentives, and the fans go with them. If they carry the platform, they could bury it, too – remember Vine?
In her HBR article, Jin suggests more solutions to diversify the portfolios. Just as in the “real world”, the creator economy needs to open up opportunities for a thriving middle class in the digital world. Besides monetizing loyalty, it’s spicing up all those sophisticated recommendation algorithms with a healthy dose of randomness.
The addictive randomness
If someone’s popular on a digital platform, amassing more fans gets easier thanks to algorithms designed to do just that. Their calculations can pinpoint what you’ll like based on what you already like, reinforcing the initial tastes and opinions. Wildly popular TikTok openly stated that the time came to disrupt the “filter bubbles”, thus giving a chance to less-known creators and diversifying the interests of users.
The video-sharing social network explained that they want to avoid the repetitive patterns and keep their feed exciting and varied. “To that end, sometimes you may come across a video in your feed that doesn’t appear to be relevant to your expressed interests or have amassed a huge number of likes. This is an important and intentional component of our approach to recommendation: bringing a diversity of videos into your For You feed gives you additional opportunities to stumble upon new content categories, discover new creators, and experience new perspectives and ideas as you scroll through your feed,” TikTok explained. Considering their growth, they are clearly doing something right.
Passion as future of work
Journalist Adam Davidson claims that the economy of the 21st century is undergoing a dramatic shift. He argues that the twentieth-century economy of scale has given way to an economy of passion. In his book titled The Passion Economy, he digs deeper, showcasing that scaling intimacy, finding your niche, and combining it with genuine passion make for a successful career.
“Don’t be a commodity – is one of the most important rules in the passion economy. If you want to be a commodity, then be like Mark Zuckerberg – Facebook, Cargill, Unilever… You’d better be selling billions of units because you’re going to be making a fraction of a penny. What you want to do is to serve your audience so fully that they really have no choice. You are the one that knows them best,” Davidson outlined for Passion.io.
The emergence of digital platforms represents a new frontier in creator economy. Creators can easily monetize skills that previously couldn’t possibly translate into “a job”.
All in all, if these platforms manage to accommodate a broader range of creators and their niches, as Li Jin suggests, it’s great news for the future of work. Because the “love what you do” cliché becomes a daily reality for more people than ever.