Current Status of Creator Economy
Small Creators Generating Big Business
The creator economy has been thriving over the past 1-2 years. To put it simply, it’s an economic sphere where individuals connect with fans and customers through personal information dissemination and actions, enabling revenue generation through methods like subscriptions and tips.
The concept of the creator economy consists of two main groups. The first group is individual creators, including musicians, artists, designers, bloggers, and more. The second group comprises companies and platforms that provide tools for their creative activities. Representative platforms include TikTok, which overtook Google as the most visited platform in 2021, YouTube, and Substack, a newsletter platform that scanning also utilizes.
While Netflix might be associated with being a superstar in video content, the company acknowledged TikTok as a true rival in its shareholder meeting in July 2020. This is evident from Netflix’s announcement of “Fast Laughs,” a vertical short-form video similar to TikTok, in March 2021. Everyday people, not just superstars, are gaining passionate fans through niche strategies, disrupting the star model of Big Tech.
With the advent of Web3.0, the creator economy is poised to make further leaps. It’s moving towards making creative activities for creators even more accessible, with new revenue sources through platform utilization in the metaverse, content creation, and the efficient use of AI in the production process.
However, it’s important to reiterate that the creator economy isn’t centered around a single superstar or blockbuster. It’s a collection of small creators. Platforms that support them, provide fair compensation, and connect creators with sponsors and patrons need continuous improvement.
Economy Supported by Communities
In the creator economy, the connection with fans is crucial. As highlighted in the HIGHLIGHT section at the beginning of this article, it’s an economic sphere built on two-way connections between creators and fans. Alongside the “creator-fan community,” the “fan-to-fan community” is equally important.
In the formation of the creator-fan community, metaverses are expected to play a significant role. An example is the virtual fan meeting held by K-Pop star AleXa in November of last year, where 1,450 fans freely roamed a virtual arena and interacted with AleXa herself. Metaverses will enhance the intimacy of communities by transcending constraints like space and capacity.
When it comes to forming communities among fans, new services have also emerged. The social platform “Playground (beta version)” supports the formation of creator communities, enabling the management of newsletters, podcasts, merchandise, subscriptions, and more through a single account. Tools that facilitate connections among community members, currently under development, will play a crucial role. Founder Giarene Yeung mentioned that “the difference between an audience and a community is whether members can interact with each other in a place where the organizer is absent.”
However, an excessive sense of connection doesn’t always lead to positive outcomes. We need to manage our ideal community formation effectively.
Resetting the Creator Mindset
The era has come when anyone can become a creator, thanks to the creator economy.
The accessibility and simplicity of video content editing have increased through platforms like YouTube, TikTok, and Instagram. Moreover, the proliferation of affiliate advertising allows for secondary income incentives, making it easier for more people to start creative activities as creators, with significantly lowered barriers. Additionally, the expansion of platforms for sharing and disseminating works has streamlined interactions with the audience.
Recently, professional creators have been using social media to provide basic tutorials on editing tools. This marks an era where creators engage in two-way interactions online. As the number of creators increases, competition intensifies, making the creator industry even more challenging. As creativity becomes saturated, we need to continuously learn various things to find uniqueness. However, our past experiences and knowledge might unconsciously impose fixed notions, limiting our creativity.
This is where the concept of “unlearning” comes into play, suggesting a process of resetting one’s mindset and introducing new input. Unlearning involves stepping away from formal learning by consciously selecting and discarding knowledge, eliminating preconceived notions. This fosters a freer and more flexible way of thinking.
According to Harvard Business Review, the unlearning process can be divided into three main steps. Firstly, it’s important to identify ineffective models by recognizing one’s own and others’ behaviors. Secondly, an alternative model that efficiently achieves goals should be devised. Finally, the new model should be established along with new mental habits.
Unlearning, however, isn’t a straightforward process of consciously selecting knowledge while identifying one’s thought patterns. It requires some training. Nevertheless, if we approach unlearning as a way to relax the rigidity of our brains without consciously training ourselves, it’s something we should incorporate into our daily lives for our own benefit.
Past and Future of Creator Support
Being a creator and remaining one is quite challenging (at least I think so). Internal motivation that stimulates creative drive is important, of course, but external influences also play a crucial role.
In the realm of creative activities, how to “approve” creators and their work is a key aspect of external motivation. Moreover, from a fan’s perspective, expressing loyalty to creators is another important issue that arises.
Let’s explore how internet-era services have addressed these discussions and the history behind them.
When you think about mechanisms for approving creators, many people immediately think of the “like button”👍. The introduction of the “like button” to Facebook in 2009 might come to mind. It was adapted from the features of the social feed service FriendFeed, which Facebook acquired. The “favorite” button on Twitter, which originally emerged in 2006, was initially used to bookmark tweets.
Fast forward over a decade, and the “like button” has become indispensable on social media platforms. However, it’s not without its shortcomings. For instance, “likes” don’t translate to monetary value. While some argue that “likes” contradict internal motivation, the lack of financial incentive poses a significant challenge for individuals trying to establish themselves through creative endeavors. Depending on ad revenue and increasing platform dependency becomes necessary. Moreover, the ease with which anyone can click the “like” button makes it difficult for fans to express their enthusiasm effectively.
Amidst this landscape, the concept of “tipping” has gained traction, particularly in live streaming services. This mechanism addresses both the approval desire of creators and their financial needs simultaneously. In fact, in 2021, the highest-earning YouTuber worldwide from tipping earned approximately 200 million yen. Bluntly speaking, the value of items fans give to creators demonstrates the level of loyalty.
For platform providers, designing financial incentives is critical. As the commoditization of functions and services they can provide intensifies competition, attracting exceptional creators can become a differentiating factor. For instance, TikTok initiated the Creator Fund with 200 million dollars in 2020 and has been offering various monetization methods.
Now, as we’re entering the era of Web3.0, systems for approving creators are bound to undergo further evolution. Concepts like incorporating NFTs into brand loyalty programs have been mentioned, and such concepts will likely be introduced to the connection between creators and fans. We should keep an eye on the developments ahead.