This is the creator economy, where stars are self-made in suburban living rooms and millions of fans peek through the curtains.
With lines between the creator economy and entrepreneurship blurring, independent creators are having a moment.
Once, a few large media companies, music labels, and publishers owned the creator-to-fan pipeline, deciding who and what audiences see, and wielding financial power over creators and their content. But in the past decade, a new, digitally native playing field emerged, allowing creators to become their own publishers. Platforms like Twitch, Patreon, and TikTok democratized distribution and enabled creators to reach audiences directly. Monetization tools soon followed, and the audience-first business was born.
Many are now anchoring their brands to owned channels and building platform-agnostic communities. And with lines between the creator economy and entrepreneurship blurring, independent creators are having a moment.
What is the creator economy?
The creator economy refers to a type of business run by online content creators who monetize their audiences through paid partnerships, ad revenue, tipping platforms, and product sales. An estimated 50 million influencers, artists, curators, and community builders make up the creator economy.The easel to this canvas is yet another group of entrepreneurs—the founders building the technology that scaffolds this economy. This includes everything from content creation apps to ecommerce-enabled social media platforms and monetization tools like Patreon. With this tech, creators are able to build personal brands, attract viewers, and earn money.
A brief history of the creator economy
The phenomenon of the creator economy has been growing for more than a decade, but its roots can be traced back even earlier. In the late 1990s, Web 2.0 ushered in an era of user-generated content and interactivity, and the rise of mobile contributed to always-on internet consumption. Blogging platforms came first, evolving from online diaries to one-person media machines, feeding these “extremely online” audiences.
Monetization options like ads and brand sponsorships allowed some to live on blogging alone, amassing audiences that rivaled major media publications. Huffington Post and BuzzFeed were among the first to adopt the spirit of the blog as a formal media property. “Real people” began to appear in major ad campaigns, replacing traditional celebrity endorsements, and the early signs of modern influencer marketing emerged.
Reality TV accelerated the trend, catapulting the unknown to celebrity status overnight. And as YouTube launched to the public in 2005, aspiring stars no longer needed production deals to gain viewership. The next decade would welcome a wave of new social platforms and, in the past few years, creator incentives like YouTube Shorts. Progress happened slowly, and then all at once.
The creator economy today
In recent years, the creator economy has welcomed a diverse mix of influencers, bloggers, social media personalities, comedians, activists, podcasters, videographers, artists, musicians, and athletes. They range from side hustlers to full-time entrepreneurs, micro-influencers to massive stars.
But that number is exponentially bigger if we consider the entire ecosystem. “People look at a very successful creator and don’t realize how many team members are behind them,” says creator Samir Chaudry, one half of the filmmaker duo Colin and Samir. These behind-the-scenes roles are key to helping creators transform personal brands into mature companies.
In 2022, creators are raking in earnings directly from platforms, but only a fraction of them actually make a enough to live on these earnings alone. On Spotify, 98.6% of artists make just $36 per quarter, and on Patreon, only 2% of creators earned a monthly minimum wage.
The future arrives early
While the pandemic’s impact on small businesses was severe—in many cases, it forced businesses to close, sometimes for good—a surprising trend saw business formation rise in the US in mid-2020. Entrepreneurial spirit rose, as many out-of-work creatives sought alternative, independent sources of income. And even in 2022, as the economy slows, entrepreneurship is on the upswing.
We were all having a relatable experience, and with TikTok, we were able to express it with a very low barrier to entry.
Samir Chaudry
Remote work increased everyone’s screen time, and the creator economy was bolstered by our collective isolation and need to connect. It was the perfect storm for creators to build the one-to-many online relationships that define them. “We were all having a relatable experience, and with TikTok, we were able to express it with a very low barrier to entry,” says Samir.
Entrepreneurial spirit rose as many out-of-work creators sought alternative sources of income.
What young people recognized naturally—that maybe a Reel is as interesting as the silver screen—came to the forefront of conversations about modern culture.
Meet the creator economy’s middle class
Top earning influencers paint an unrealistic picture of what’s possible. Only a small fraction can fund lavish lifestyles on ad revenue and promoted content alone.For the rest—the “middle class” of the creator economy, as Li Jin writes—a mix of income sources is the reality. Creators can monetize social audiences directly on-platform in multiple ways, like ads, subscriptions (say, Patreon), sponsored content, shoutouts (think Cameo), and tips.
An emerging class of creators are now moving their audiences to less volatile spaces—spaces they own. Through a website or online store, creators can grow communities and trade value for a closer, more direct relationship with their fans. This includes giving subscribers access to exclusive content or virtual events, selling fan club subscriptions or merch, and creating sponsored on-site content for partner brands.
Income diversification for creators
While creators now have countless tools to build and access audiences, for the most part, they don’t own them. “The permissionless internet that we all celebrated has reached its limits,” says serial entrepreneur and angel investor Hugo Amsellem.
Though many creators have already realized the benefits of diversified income, one survey found that only 5% of creators reported their own brand as their primary revenue stream.
Community is a creator’s most valuable asset. “If you’re building a community, they will come with you,” says Samir. True fans often clamor for ways to support their favorite creators beyond “hitting like.” Branded products and owned communities are a gateway for audiences to spot and connect with fellow fans, all while strengthening relationships. It’s a shift that can’t happen soon enough.
Entrepreneurship in the creator economy
Even before launching, creators solved one of the biggest pain points afflicting traditional entrepreneurs: capturing attention. The success of the creator economy rests on these built-in buyers, hungry to own a piece of their idols.
The barrier to entry for traditional entrepreneurial pursuits is lower for those who have acquired a business education by osmosis. Creators are, by necessity, experts in marketing, customer (audience) retention, brand building, and brokering deals. Many—dancers and athletes and comedians alike—who never considered themselves business people figured out some of the hardest parts on the fly.
Starting a creator business
For creators considering entrepreneurship as a path to independence, there are a few best practices to consider.Build the right tech stack
A London Business School study found that smaller brands using low-code tools like Shopify have seen substantial growth and returns on investment while requiring less capital upfront. “A decade ago, creating an online presence called for substantial upfront investment,” says the study’s creator, Dr. Gary Dushnitsky.
As such, low-code tools have had a leveling effect, giving access to a group that previously lacked opportunities to financially benefit from the creator economy.
“These tools can be stacked and expanded to serve the needs of a focal business,” says Gary. And for many creators, commerce is the ideal way to turn content into cashflow long before they reach seven-figure follower counts. Sonja Detrinidad, TikTok plant mom and founder of Partly Sunny Projects, is one such entrepreneur who’s grown her business in lockstep with her fandom.
The creator economy tech stack is growing to include new content creation tools and platforms almost daily. While social media apps enable creators to build audiences, it’s critical to migrate those audiences to owned channels where they can support creators through buying products, online courses, or paid subscriptions.
Create a simple store in minutes
The Shopify Starter Plan offers an easy, no-code setup. It's perfect for sharing products across social.
Develop meaningful partnerships
Creator influence should not be underestimated—or undervalued. In one survey, 45% of buyers reported they are eager to purchase products promoted on social media by creators, and 73% said trust was increased by a creator’s in-depth product knowledge.
A well-placed promoted social post with a relevant creator can send a brand’s product into out-of-stock status. Creators cash in on this partnership, generally through a one-time payment per post, but the value for the brand can extend beyond the lifetime of the partnership.
The takeaway? The best brand for creators to endorse is their own.
If done strategically, though, brand partnerships can provide long-term value for a creator, says Samir. “It’s a good relationship when the advertiser becomes a character in your universe,” he says.
While many content creators focus on telling their stories to audiences, Samir suggests putting in equal effort to tell your story to the market. “The whole business is storytelling,” he says. “And what we saw was, when we started telling our story properly, relevant advertisers came to us.”
Prioritize audiences over advertisers
Brand partnerships may always be part of a creator’s monetization mix, but Colin and Samir have held a longtime view that audiences will always pay more than advertisers.
Samir explains that when the duo launched an online course, 800 people each paid $100 to take it. “In what world are we getting 800 views on a post and getting $80,000 [from advertising] in exchange?”
Learning from engagement and optimizing content toward audience preferences is a long-term strategy that isn’t dependent on ad dollars.
Make the most of the “attention phase”
Social platforms are and always will be a key part of this ecosystem, even as creators diversify income and migrate audiences. They are first the springboard for emerging creators to capture attention and grow audiences. For established creators, they will always serve as a pipeline to funnel new audiences into owned channels.
Superpowered social links
Linkpop is a tool that lets you create a customized landing page for all your brand links. It’s free, customizable, and best of all: shoppable.
Diversification across these non-owned channels is another insurance policy to consider while in what Hugo calls “the attention phase” of the creator lifecycle. Most creators find their groove with one platform, whether it’s the format or the audience that jibes, but will reach a threshold where expanding into new channels makes sense. Basically: pick a lane, but don’t stay there.
The same advice applies to monetization. Creators that earn money across multiple revenue streams avoid the pitfalls of volatile platforms and ensure they always have a plan B.
Case study: The accidental influencer
Yin Qi Xie entered the back door of the creator economy. “I’ve had Instagram since I was 12, when I wanted to be an influencer,” she says. Instead, the college student stumbled upon an untapped market: boxing gear for women.
Yin took to TikTok with her idea and, encouraged by her growing community, launched her brand, KOStudio. “I would hate to actually be an influencer now,” she says.
But as the face of her brand’s 160,000-follower TikTok account, Yin has entered influencer territory, building value for audiences-turned-customers. Now, after TikTok success, she’s diversifying by revisiting an old friend: Instagram. “We’re building a separate audience on Instagram,” says Yin, who adds that the platform is catching up as a top driver of sales.
The approach not only mitigates platform risk (algorithm changes, for example) but also lets creators uncover new audiences. The audience overlap for creators on multiple channels is typically in the range of 10% to 20%.
Think like a brand
Successful creators are those who have grown loyal audiences around their particular style of content. These personal brands are susceptible to the same pitfalls as any brand if they are not backed up by a strategy.
As creators make the leap to building a brand from their influence, it should be approached with the same vigor as a product-first brand. Understanding the audience, creating a set of values, and developing a style guide are all critical steps when starting a business. This exercise will help creators develop the right products and paid content for the audiences they serve.
The creator’s path from influence to ownership
The instability of the systems that underpin the creator economy is balanced by promising trends toward more independence for creators. The increase in adoption of remote work and polywork, and the slew of features and tools that accelerate the creator-to-founder lifecycle, are cause for optimism.
Literally just create—that’s who you are. Keep making and you’ll find your path.
Samir Chaudry
The creator economy’s bright future is best exemplified by the success of underrepresented creators, historically victims of bias and tokenization at the hands of institutions. Many are now accessing equally underrepresented audiences hungry for faces that look like theirs and content that reflects their lived experiences.
“Do whatever it takes to make stuff,” says Samir. “If someone’s going to pay you to make stuff, do that. Literally just create—that’s who you are. Keep making and you’ll find your path.” And, as your influence grows, make sure your independence grows with it.
Illustrations by Brian Stauffer
Additional contributions by Greg Ciotti
Read more
- How This 17 Year Old Turned a Love of Watches Into a $13,500 a Month Business
- What Is Affiliate Marketing and How to Get Started
- AliExpress Dropshipping- How to Dropship From AliExpress
- What To Sell on Shopify: Top 12 Things To Sell (2024)
- Unlock Recurring Revenue with a Subscription Business Model
- How to Write a Perfect Business Plan in 9 Steps
- Investing in Influencers- 13 Funds Paying Online Creators for Content
- The Creator Economy Tech Stack- 160+ Apps, Tools, and Platforms Powering Creator Businesses
- How to Network in Today's World- Tips and Tactics for Creating Priceless Connections
- 13 Public Speaking Pros Share Their Best Tips and Horror Stories
Creator economy FAQ
What is a creator?
The term “creator” evolved from the term “influencer” to include a wide range of groups—from artists to athletes—creating unique niche content and building audiences online through social media platforms. Successful creators earn money through a variety of income sources, including selling products, advertising revenue, and tips.
Why is the creator economy important?
The creator economy is important because it has enabled monetization and independence for artists and other creators. In the past decade, independent creators have been able to access tools to reach audiences directly and on their own terms.
How do you get into the creator economy?
Joining the creator economy simply means taking the step to create online content, finding or building an audience for it, then using monetization tools and methods to earn money from your personal brand.
How do you make money in the creator economy?
There are several ways to make money online as a creator. If you build a small but loyal following, start a merch line and sell products on an owned channel to that built-in audience. As you grow your influence, you may be able to partner with brands to develop paid social content, or create a subscription tier for superfans to access exclusive content.
