THE CREATOR ECONOMY: WHAT IT IS AND HOW TO WIN IN IT
According to Taylor Lorenz’s report for The Atlantic, the term creator was originally marketed by YouTube, as an alternative to “YouTube star,” which was a time when only a few famous public personalities could succeed on the platform. However, the term is now used to describe practically anyone producing any form of content online.
TikTok users are “TikTok creators.” Members of the invitation-only real-time voice-chat app Clubhouse are “audio creators.” Instagram users are content creators and so on and so forth. What this means is that everyone and anyone who posts content on any social media platform can be considered a “creator”. Creators are not influencers, but nearly all influencers are creators who have achieved a large following because of the content they create within the creator economy.
What is the Creator Economy?
Yuanling Yuan in her article for SignalFire defined the Creator Economy as:
“the class of businesses built by over 50 million independent content creators, curators, and community builders including social media influencers, bloggers, and videographers, plus the software and finance tools designed to help them with growth and monetization”.
The Creator economy is a new generation, a fast-paced economy which emerged with the growing popularity of the digital economy with far-reaching influence on people and the digital economy. The Creator economy is made up of individuals who started out as ordinary internet consumers and have evolved into sophisticated internet savvy users primarily earning a living as content creators, influencers, YouTubers, etc. Basically, anyone who uses social media alongside software and finance tools to monetise their content, knowledge and skills online is considered a creator.
The new digital economy has sprung up giving rise to an ecosystem built around this new creative community. You will be familiar with analytic platforms and content creation tools which help us track, monitor and capture the metrics and outputs of the digital economy. Interestingly the Nigerian government has also recognised the importance of capturing metrics in the creator economy and has recently inaugurated a panel to measure the audience levels and size of the digital economy in an effort to understand where the revenue shortfalls are.
According to a report by SignalFire, a venture capital firm, approximately 50 million people around the world are part of the creator economy with roughly about 46 million of them considered amateurs, Many people including those who have blue-collar jobs media to showcase their skills and/or teach using videos, podcasts or blogs. It is exciting to think that finally, many more people can make money from their passion, from the comfort of their homes.
With the advent of software and finance tools and the resources provided by the various digital platforms, independent creators and digital businesses discovered that money could be made from using social media to share their content. By having a trusted audience catering to their style of content, creators can now earn unimaginable figures.
Brands now recognize the influence of creators and their ability to harness social media to market products and services to a lot of people. Creators have begun to understand the power of branding whether personal or business-advisory corporate and have learnt to grow their small business and mom and pop shops into businesses with recognisable brands boasting multiple streams of revenue.
Subsequently, there has been a rise in the digital and ancillary support industry, i.e. companies and agencies designed to help creators earn money by selling digital products and services using tools e.g. Advertising and sponsored content, brand management and representation, paid subscriptions, Digital content sales, Merchandise, books/ebooks, Live and virtual events, fan engagement, speaking engagements and so on. As a result, creators can retain the trust of their followers and audience and can focus on creating more unique niche content that caters specially to their audience’s interests.
There has been a shift from using only social media platforms like Youtube for ad revenues to being paid by brand sponsors on Twitter, Instagram and Snapchat, and popular platforms like Tiktok, and Onlyfans. Creators have been able to largely attract people to different platforms using their influence, hereby incentivizing platforms to reward them. For instance, Patron is known for rewarding content creators and creators receive between 88% to 95% of their subscriptions, Substack writers earn 90% of subscription revenue.
Companies like Facebook are positioning strategically for the creator economy and making plans to build a suite of Influencer tools on Instagram which includes creator shops, native affiliate links and a marketplace to connect influencers with brands. Even platforms like Tik Tok which is a B2C (Business to Consumer) app that originally was not designed to collect revenue, however, have built a marketplace that connects advertisers to creators and has launched a $200M fund to invest in its top creators. Youtube’s new feature, “Shorts” allows creators to express themselves in very catchy short videos and increases the chance of being invested in by Youtube itself. Podcasters are not left out and platforms like Spotify do not intend to take a share from creative profits until 2023 when it will begin to take a 5% cut. This shows the influence and evolution of the creator economy and how companies are tapping into this newfound treasure.
The creator economy has given rise to a new profession and the participants are referred to as influencers. Nowadays, celebrities are not just popular actors or actresses or musicians. Content creators who have built their brand and amassed followers who support and enjoy their content become influencers and eventually celebrities. Influencers are very important because they have the ability and power to affect the purchasing decisions of their followers. They also have the power to attract their following to support whatever it is they are involved in or a brand they are representing. Brands that seek to remain relevant have seen the potential of engaging with the creator economy.
Recent surveys show that the creator economy, particularly the influencer marketing industry grew by more than 550% between 2016 and 2020. It has been predicted that by the end of 2021, the industry will grow to be a $13.8 billion industry.
Partnerships/relationships between brands and creators have proven to be a driving force for the growth of the creator economy.
In addition, written content creators or bloggers can sell their creative talent online on sites such as Amazon Publishing and platforms such as Tumblr, WordPress, Substack and Medium. For live streamers, there are the options of Twitch, Mixlr, Instagram live, Facebook live amongst others. Photographers can make use of Instagram and Pinterest for their content. For audio content like music and podcasts, there are media platforms like iTunes, Spotify, Pandora, Tidal, Boomplay, Deezer and Soundcloud. These platforms have been instrumental in the growth of the Creator economy and this is evident in the recent acceleration of the creator economy.
According to Forbes, the top-performing YouTube channels reaped $211M between June 2019 and June 2020. Famous Instagram influencers and celebrities can make up to 6 figures per post. In September 2021, Yahoo Finance reported that 58% of users are willing to pay a monthly subscription fee between $1 and $15 to access their favorite creator’s exclusive content. This is an upgrade from the times when users will refuse to pay for content that they believed they could get for free. Top Substack writers can earn up to $1M annually.
The early phase of the COVID-19 Pandemic forced billions of people to stay at home which had a positive impact on the creator economy, with a surge in online gaming, online shopping, DIY home care, etc social media platforms also enjoyed a massive surge in the numbers of subscribers and users throughout the pandemic. There has been an increase in consumer engagement and content consumption on media platforms. This has led to the growth in revenue for these platforms, and in turn, an increase in revenue for content creators which will make them more willing to pay for tools that help them.
How Can Creatives Win in The Creator Economy?
We live in a time where anyone can become a self-styled “Creator” however succeeding in the creator economy requires a lot more than a visual presentation, and requires strategic planning and good execution.
For example, a performing artist, releasing music alone may not be sufficient to become successful in this new creator economy, it is important that artists understand the importance of making content for fan engagement, promotion and marketing of their music The competition for attention is fiercer than ever before and these additional steps are needed to get the right level of attention for their music but may also open themselves up to a larger audience of people.
A good example of a musician who understands these elements is Blaqbonez, in promoting his music Blaqbonez creates engaging content around the theme of the music he is trying to promote, he recently created an "evangelism" content to promote his hugely successful show that he titled "Breaking the yoke of love Crusade" which is a continuation of the promotion of his 2021 album "Sex over Love." The show became compelling to attend with the creative contents that Blaqbonez used in the promotion of the "crusade".
Another example is DON JAZZY, he is one of the most successful music producers in Nigeria and has grown to become one of the most influential content creators in Nigeria because of the creative ways he markets new talent which engages his audience whether it is the music he is promoting or the product he is marketing.
Another example is the famous Senegalese tik tok KHABY LAME who became famous for his myth-busting of “life hacks” and his famous shrug content during the Covid-19 pandemic, he is currently the second most followed person on the social media platform with over one hundred million followers, earning over One Million Dollars without saying a word. Khaby Lame is an example of how creators with strategic planning and good execution can win in the creator economy.
To win in the creator economy, creator’s must constantly put out content that is in line with the current trends; scoring high for relatability and engagement.
How Can the Nigerian Economy Win in The Creator Economy?
The creative economy contributes just over 6.1% to global gross domestic product (GDP), averaging between 2% and 7% of national GDPs around the world. According to the International Monetary Fund (IMF), the entertainment industry now accounts for 1.45% of Nigeria’s GDP.
According to UN estimates, the creative economy industries generate annual revenues of $2.25 trillion and account for 30 million jobs worldwide. Nearly half of these workers are women, and these industries employ more people ages 15-29 than any other sector.
Television and the visual arts make up the largest industries of the creative economy in terms of revenue, while visual arts and music are the largest industries in terms of employment.
In Nigeria, the creative industry is one of the biggest employers of labor. From film to music and fashion, young Nigerians have turned what was once considered ‘informal work’ into a viable industry creating employment, and largely responsible for exporting Nigeria’s culture across the continent to the world.
According to a Jobberman research, the creative sector currently employs an estimated 4.2 million Nigerians, making it the second-largest employer in the country, and has the potential to create an additional 2.7 million jobs by 2025.
In Nigeria, Nollywood, which is the movie production subsector of the entertainment and creative industry, is globally recognised as the second largest film producer in the world, coming behind America’s Hollywood and ahead of India’s Bollywood. The number of film production annually, stands at around 2500 with a projection of US$22million by the end of 2021 for total cinema revenue alone, while the total music revenue in Nigeria was estimated to rise to US$73million by the end of 2021 (with a compound annual growth rate of 13.4%).
Despite Nigeria entering into a recession, aggravated by the COVID-19 pandemic, the entertainment industry showed economic resilience, especially in the film, music, and comedy sectors. The movie industry defied the pangs of the COVID-19 pandemic to achieve record-breaking success. For instance, as of 26th of January 2021, the Nigerian gangster comedy film, Omo Ghetto: The Saga grossed N468 million at the box office surpassing the record of the 2016 film; The Wedding Party as the highest ever grossing film in the Nigerian film industry. The Fate of Alakada released in 2020 grossed N113 million as of January 2021.
Apart from the sizable contributions made by the Nigerian entertainment industry, the industry has become the unofficial positive public relations projector of the country to the world. Nigeria’s international relations have been boosted through its remarkable influence towards the new sound called afrobeats exerting a growing socio-cultural influence worldwide as seen on platforms like Tik Tok and various social media giving Nigerian culture a new level of desirability and attraction. . The Grammy-award win by Burna Boy at the 65th Grammy awards is also a testament to the tireless efforts and rewards entertainers have put in . Also, in 2013, Nigerian actress and producer, Omotola Jalade Ekeinde was recognized as one of TIME magazine’s 100 most influential people, alongside Michèle Obama and tennis star, Li Na.
While taking all of these into consideration, it is important for the government to create an enabling environment for creators to thrive through the creation of favorable policies and tax breaks. Taking a quick glance at the Copyrights Act which would be for all intents and purposes considered the MOST important legislation in Nigeria where creatives are concerned because of its impact on the treatment of intellectual property, it is still considered by many to be quite outdated and not in tune with global trends, the government needs to be proactive by making new legislations to cater for the creative industry while also making all the necessary amendments to the existing ones so that they are in tune with global trends.
In Conclusion:
The creator economy must not be overlooked as it is a thriving source of income for many people, especially young people. A recent survey showed that more young people prefer to be content creators or social media influencers in future rather than the traditional professions such as medicine. Globally, creators are leveraging their creative skills and making money out of their content. The creator economy has evolved and holds the key to present and future marketing. It is evident in the gradual domination of creators on social media and media organizations.
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