Over the past decade, the creator economy has become the backbone of the internet and media. Not only that, but it’s completely democratized. Anyone can become an active participant in the creator economy, and anyone can vote on which content they like simply by consuming it.
Why this matters:
The creator economy marketplace is expected to reach $47.2 billion over the next decade.
From YouTube, Instagram, and Twitter to TikTok, Substack, and Patreon, there is no one right way for a content creator to make it big in the industry. The content creation market was estimated at $13.4 billion in 2022, bringing in hefty profits for both the creators and their partner brands.
As for the future, it’s showing no signs of slowing down. A glance at the Forbes Top Creators 2022 list shows that creators are easily becoming millionaires themselves. But in the short term, here’s what you can expect in 2023.
What is the Creator Economy?
The creator economy is fast emerging as one of the most exciting economic models. This form of the economy is centered around creators – individuals or teams that produce content, services, and products intended to add value to their field or community. It is different from the traditional economy, where centralized institutions or companies provide goods and services to the population.
The beauty of this concept is that anyone can become a creator and participate in it, regardless of individual circumstances. By pooling the talent and creativity of an entire population, significant breakthroughs can be made that benefit not just those involved but also their surrounding community. Additionally, creators can generate income through their creations, creating a more inclusive environment where everyone has a real chance of success.
Creators as Brands and Vice Versa
The creator economy is now a part of every industry, reshaping how consumers think about work and social media apps. According to this July 2022 report, 25% of consumers want to be influencers. I’m not sure if this is good or bad, but it is reality.
In any case, creators have built their own brands for years, with some evolving into full-scale media empires. Consider the growth of YouTube celebrities like Marques Brownlee, MrBeast, and The Ohana Adventure. These creators have leveraged their influence to create massive brands with advertising products and services, proving the strength of the creator economy.
However, this encompasses more than just the creators themselves. Brands are also engaging and collaborating with creators, tapping into the massive audience of influencers. Through sponsored posts, branded content, or even direct investments in a creator’s brand, brands across all sectors continue to invest heavily in the creator economy.
The success of these partnerships is undeniable; brands that have invested in creators have seen an increase in metrics across the board–brand reputation, conversion rates, sales, and engagement.
Below are the creator economy budget investments for TikTok, YouTube, Instagram, and Facebook, according to eMarketer.
Capitalizing on Various Monetization Opportunities
The trick with the creator economy is to work smarter, not harder; an approach the current generation of young adults, specifically the — Gen Z audience — have followed to launch their careers in a highly-competitive but lucrative industry, and it’s working!
Just under half of the content creators (44%) earn a living doing creative work online. This isn’t “pocket change” profits. Creators are now earning an average of 6x the US minimum wage. For others, the monetization of their content is enough to represent half of their total monthly income.
“The truth is that content monetization has helped the economy’s growth immensely, and artificial intelligence makes things exciting and changes the playing field for creators,” writes Naimeesha Murthy, Product Management Leader and member of the Forbes Business Development Council.
“Having said that, the creator economy is just getting started, and we can expect a lot more innovation and disruption in this space in the coming months and years. We already see a shift in the entertainment industry and other adjacent markets,” adds Murthy on the anticipated growth of the creator economy.
With hot spots in the US, Brazil, Spain, and the UK, 4 out of 10 young content creators all over the globe have reported making more money off of monetizing their content than they were just two years prior. New participants are also optimistic, with 8 out of 10 predicting they will earn even more in a couple of years.
Most In-Demand Types of Media Content
The creator economy is highly diverse. From video content flourishing on YouTube and TikTok, photography and art on Instagram and Patreon, to exclusive written content on Substack with overlapping between mediums and platforms. However, they aren’t all as profitable.
Photography and photo editing is the most monetized form of media across the board, with a global total of 26% of static visual media creators monetizing it. Japan (JP) has the highest monetization rate at 33%, followed by South Korea (SK) at 30% and Brazil (BR) at 31%.
The next-highest content variety is written content, with a 16% global average. Again, Japan (JP) has the highest monetization rate at 22%, followed by Australia (AU) at 19%, and Germany at 18%. As for more traditional visual content, such as painting or video content, those have global monetization rates of 15% and 11%, respectively.
The high numbers could result from ease of consumption and the long history of such content. That’s not to say more cutting-edge content isn’t catching up. NFTs, while making up 8% of global monetization total, it’s considerably higher in the US at 15%, where it’s on par in profitability with other creative endeavors like graphic design and creative writing.
How Much are Content Creators Earning?
There are solid reasons why half of Gen Z monetizers between the ages of 16 and 18 would prefer starting their own creative business rather than going to college in pursuit of more traditional careers.
The average hourly wage of a Gen Z creator is $58. Working full-time adds up to $116,000 of annual income. This is approximately 14% higher than the average hourly income of content monetizers from other generations, at $51 an hour.
That’s not to say Gen Z content creators are spending close to 40 hours per week working on creative content. They spend as much time as older content creators on creative content, an average of 11 hours per week. Most of their efforts go towards photography and video editing, creative writing, painting, and illustration, as well as graphic design.
But while it brings in a considerable income, many creative content creators are still searching for job security that comes with the various types of business contracts. 53% of US-based content creatives said they’d prefer the security of working with a third-party business or corporation. This number is in line with the creator feedback from other countries, such as France (FR) at 57%, Spain (SP) at 55%, and the UK at 50%.
The Global Creator Economy Shows no Signs of Slowing Down
As mentioned, the content creation market is expected to triple over the next decade, but what about the upcoming year?
Gen Z and other generations of online content creators are optimistic about the financial growth potentiality of the content market. 77% of Gen Z creators are expecting to earn more in the upcoming two years, while 83% of monetizers of other generations think the same.
The numbers are even more optimistic for Gen Z creators from other countries. For instance, Brazil’s content creators report a 96% momentum, followed by the US and Spain (SP) at 73% and the UK at 86%.
Content creators’ optimism about the state of their economy isn’t baseless. Many can point to changes in how they conduct business online and how they plan on increasing their net worth and income through it.
Less than half of creators say they’ll create more content over the next two years. 44% of Gen Z influencers are also gaining followers and subscribers steadily, while 39% believe there’s growing consumer interest in the type of content they produce on a large scale.
Overall, the numbers are very similar between Gen Z influencers and their counterparts from older generations.
Who Are the Content Creators?
Not everyone can survive and thrive in the highly-competitive market that’s the creator economy. So, what’s in common between all the creators who managed to succeed in earning a living through their creative work?
As a demographic, they skew older, at 37 years, with 69% living in urban areas where creativity is highly valued. More than half are educated, while just under three-quarters are parents with kids under 18 living with them.
The mindset is where they shine. 67% of influencers identify themselves as creative, 49% as career-focused, and only 34% as money-driven. Their most in-common feature is the enjoyment they find in risk-taking (73%) and an overall positive mindset, which 78% of respondents reported having.
Most of them are fairly recent in the industry. 74% have only started monetizing their content in the past year, and 51% in the past two years. Just under half were motivated by the opportunity to do their work into a life-long career, and almost 9 out of 10 content creators say that being able to create content as their sole source of income would be a dream come true.
The content creators themselves are why the creator economy is expected to explode in 2023. They’re highly passionate and motivated, turning their dreams and passions into sustainable careers that entertain consumers and bring huge profits for themselves and the businesses they partner with. Some Gen Z trends validate that creators plan to monetize their platforms in 2023.