The Creator Economy is booming. Empowered with publishing platforms and recurring revenue streams, thousands of people are striking out on their own as paid creators. This isn’t just about well-known journalists leaving established brands anymore. Today, anyone can become a media company. As The New York Times says in an article titled “Why We’re Freaking Out About Substack”:
“This new ability of individuals to make a living directly from their audiences isn’t just transforming journalism. It’s also been the case for adult performers on OnlyFans, musicians on Patreon, B-list celebrities on Cameo. In Hollywood, too, power has migrated toward talent, whether it’s marquee showrunners or actors. This power shift is a major headache for big institutions, from The New York Times to record labels. And Silicon Valley investors, eager to disrupt and angry at their portrayal in big media, have been gleefully backing it. Substack embodies this cultural shift, but it’s riding the wave, not creating it.”
All of this new activity is prompting some media outlets to call content creators the new start-ups. Creators with recurring revenue, such as paid subscriptions or established ad streams, can even get advances on their future earnings. Pipe, for example, is a marketplace where companies can sell their customer subscription contracts for up-front financing. And many VC firms are now backing portfolios of content creators.
“We say ‘you’re a young creator. Maybe you have a couple of YouTube channels — you have a following. … We will buy 5% of everything you do for the next 10 to 30 years,’” says Slow Ventures partner Sam Lessin, whose VC firm has carved out $20 million from its latest fund to back creators, tells Axios.
Take the newsletters space, which has been recently dominated by Substack but is growing and diversifying in all sorts of interesting ways. As Marc Andreesen once famously put it, there are two ways to make money in business: one is to bundle, the other is to unbundle. Today the newsletter industry is rife with both dynamics.
As the competition heats up, creators are forming new collectives in order to pool resources and create differentiated offerings. Sidechannel, a brand new tech media venture currently comprised of just eight writers, recently hosted Facebook CEO Mark Zuckerberg on its own discord server.
“As we get our legs underneath us, we plan to use Sidechannel as a home base for all sorts of collaborations,” says founder Casey Newton. “We’ll host audio chats using Discord’s new Clubhouse-like features; we’ll spin up little podcasts; we’ll invite authors in to host temporary channels about their new books; and we’ll bring in other independent reporters to contribute their expertise and grow their own communities.”
Mark Zuckerberg isn’t the only tech leader to take notice. All the major social media platforms are rolling out monetization programs for individual creators. Facebook is rolling out a newsletter product, and Twitter launched one last January. Instead of chasing page clicks for fleeting advertising dollars, there’s a new incentive at work: build and maintain a dedicated audience through compelling content.
Josh Sternberg’s excellent media newsletter The Media Nut neatly captures the broader context for this shift:
“As legacy publications transitioned to digital they got caught in the whirlwind of the ‘disruption model’ of the whizbang websites that, backed by venture capital money, didn’t have a circulation department because they didn’t have a print product to circulate. Instead, they ballooned web traffic as a proxy for paying eyeballs and tried to get an industry to build up ad rates to coincide with that rise. Look at all this potential money we could charge advertisers by saying ‘scale’ and ‘reach’ over and over. This was a fool’s errand, as we now know. Higher traffic doesn’t equate to more money.”
In short, the Subscription Economy is helping creators ditch quantity for quality. And we’re all benefiting as a result.
Download the Zuora 2021 Media Industry Report.