The Creator Economy Is It All Hype

The Creator Economy: Is It All Hype?

Over 50 million people describe themselves as content creators or influencers on social media. Within this group, over 2 million are full-time, professional creators. The other 46.7 million are amateurs. 

Various studies show that the creator economy is worth over $100 billion.

YouTube is still the biggest platform for creators and over half (1 million) of these professionals earn a living creating videos for their audience and fans. 

Instagram is in second place, with 500,000 creators and influencers earning enough to turn professional.

Twitch, a streaming platform, boasts 300,000 professional influencers.

And let’s not forget TikTok, social media’s latest rising star.

Despite these impressive numbers, it’s worth questioning whether being a creator is worth the time people spend to invest, learn, and create content.

Does the creator economy have a long-term sustainable future, or is this short-term hype that will calm down within a few years? 

We set out to answer those questions below.

What is a Creator? 

There are no surprises here.

A creator produces content.

But in the past few years, the word “content” has come to mean everything we read, watch or listen to. 

For example, Netflix and Disney produce content.

Everything they create is released on global platforms — either on their subscription-based streaming services or third-party platforms like YouTube and TV networks.

Creators produce copious amounts of content.

That content includes videos, images, blogs, podcasts, or livestreaming their activities, e.g., playing online games or unboxing clothes and makeup. 

Creators are either artists in some form or passionate about a particular topic and want to share their knowledge with a wider audience.

Influencers may be authorities on topics ranging from fitness and diet/cooking to entrepreneurship, climate change, and parenting. 

People seek education and entertainment online, and creators are meeting those needs.

Creators host their content and channels on third-party platforms; examples include YouTube, Instagram, TikTok, Twitter, Twitch, and Facebook. 

Alongside these mainstream platforms, several “creator-first” sites have encroached upon the domain of Big Tech. Those companies include Patreon, OnlyFans, and Substack.

Is a Creator the same as an Influencer? 

Creators and influencers aren’t exactly the same, although most definitions of the “creator economy” include influencers, and the terms are often used interchangeably.

An “influencer” is someone with “the power to affect the purchasing decisions of others because of his or her authority, knowledge, position, or relationship with his or her audience,” according to Influencer Marketing Hub.

Influencers must be viewed as trustworthy and authentic or risk losing or alienating their audience.

Influencers generally produce content within a distinct niche, and the size of their following is proportionate to the size of that niche. 

Many creators don’t set out to be influencers.

They start as ordinary users, becoming inadvertent creators or micro-influencers along the way. 

A small percentage take an entrepreneurial leap and go full-time — aiming to become mid-tier or even mega-influencers. We will explain this later on.

What is the Creator Economy? 

Social media has changed how we experience our entertainment, our interactions with brands, and how we receive the news.

Before the early 2000s, big media companies, film studios, and news organizations controlled and influenced what society read, watched, and listened to for over a century.

Very little changed in the first decade of social media. 

Over time, users started producing content. They wrote blogs. They filmed videos and posted them on YouTube. 

Camera phones changed the paradigm — giving anyone the power to create user-generated content (UGC), like pictures and videos.

Once smartphones came along, we could take pictures and videos and post them to our social media channels. 

In the early days of hyper-scale social networks such as Facebook and YouTube, a small percentage of users began posting content that others wanted to read, watch, and engage with — transforming a percentage of ordinary users into creators and influencers.

The distinction between influencers and creators is blurry. Of the 50 million who identify as influencers and creators, only 2 million earn enough to be full-time, self-employed creators (around 4%).  

The creator economy appears to be booming. But the real question is, how do creators make money, and how much do they make? 

How do Creators and Influencers make money? 

Once an influencer grows their audience sufficiently to influence what people do or buy, they can partner with brands and businesses.

This is possible with as few as 1000 to 10,000 followers. It’s usually the first step toward becoming a micro-influencer. 

Partnering with brands means helping businesses sell their products or services. “Creators and influencers inspire communities.

They bring people together around shared interests, hobbies and identities.

Those ready-built communities are extremely valuable and major brands are starting to recognize what they bring to the table,” according to Sprout Social

From a brand marketing perspective, influencers are a powerful way to reach an engaged audience of potential customers; “Marketers rank generating engagement and reaching new audiences as their top two goals of creator marketing.”

Influencers and creators earn revenue using three core business models. 

  1.  Influencers and creators include the following services in brand partnerships
  • Sponsored posts (videos, images, blogs, etc.)
  • Affiliate links
  • Product placement in videos (similar to advertising)
  • Unboxing videos
  • Sponsored reviews
  • Offering promotional codes to their fans

Generally, brands ask to see particular metrics before partnering with influencers. 

Metrics are measured in two ways: 

  • The number of followers
  • The engagement rates: the percentage of followers who engage with content and how responsive an influencer is to their fans

In most cases, brands, marketers, and agencies working with influencers will verify these numbers before initiating a partnership. 

The table below shows the benchmark metrics that brands use to determine the appeal of an influencer or creator, along with the average price range charged by micro-influencers.

Naturally, influencers charge extra when they have a larger, more engaged audience. 

Social Media Platform Minimum Number of Followers Minimum Engagement RatePrice Range Paid for Sponsored Posts (minimum benchmark rate)
YouTube 3k7%$200 – $425
Instagram10k3.5%$100 – $225
TikTok30k11%$175 – $225
Facebook2.5k5%$100 – $175
Twitter4k8%$100 – $175

One example of a successful influencer is Jimmy Chin, a National Geographic photographer who partnered with The North Face to promote their camping equipment.

Chin published stunning pictures of tents and gear on top of snow-capped peaks to his 110,000 Instagram followers.

  1.  Advertising revenue share

YouTube is the most generous platform in terms of monetary rewards for creators. 

YouTube needs videos.

Videos keep people on the platform.

And those videos generate billions in advertising revenue every quarter. 

In return, YouTube pays creators 55% of advertising revenue — provided they have a minimum of 1,000 followers. 

The YouTube Partner Program (YPP) launched in 2007 and now supports the equivalent of 345,000 full-time US jobs.

On average, YPP-eligible creators earn $3 – $5 per 1,000 views, and YouTube has paid out $30 billion in the last three years alone. 

Other platforms offering revenue-share models include Facebook and their parent company, Meta.

So far, Meta is offering music rights holders and creators a 20% share of in-stream ad revenue across Facebook and Instagram for eligible videos in the Music Revenue Sharing service. 

Meta CEO, Mark Zuckerberg, recently announced: “To help more creators make a living on our platforms, we’re going to keep paid online events, fan subscriptions, badges, and our upcoming independent news products free for creators until 2023.

And when we do introduce a revenue share, it will be less than the 30% that Apple and others take.”  

Another option for creators is to migrate their premium work to creator-centric platforms like Patreon and Substack.

Creators then offer their loyal fans a subscription in exchange for exclusive content that isn’t available elsewhere. 

  1.  Subscriptions, products, and merchandise

Once an influencer or creator has established enough followers (e.g., 50-100k+), they can start selling subscriptions to their private-label merchandise and products. 

One example is Emily Tube, a child star on YouTube with 11 million followers who sells a range of kids’ clothes

Some creators even secure deals with national and global retailers, with branded products on sale in stores.

Zoe Sugg was one of the first creators to sign a deal with national retailers, launching a seven-figure beauty brand that sells in UK stores, including Boots and Superdrug. 

“Mega-influencers” sits at the very top of the creator economy pyramid, with around 2.4% earning over $1 million annually. It usually takes about four years of solid work to achieve that status.

Sometimes, influencers are celebrities who became famous through reality TV or movies, and these people often earn over $1M. 

A select few — who started online rather than as celebrities — achieve mega-influencer success levels.

Some even land TV deals. In 2016, Colleen Ballinger Evans, aka “Miranda Sings” was the first YouTube star to secure a deal with Netflix. 

How big is the Creator Economy?

A creator’s earning potential is directly correlated to the size of their audience and engagement rates. 

Brands want an audience.

Platforms want to sell digital space to advertisers.

To do that, they need eyeballs, engagement, and demographic data that convince advertisers their money will be well spent.

As shown in the table above, influencers require between 2,500 to 30,000 followers and engagement rates in the 3.5% — 11% range (depending on the platform) to begin billing brands for promoted or sponsored posts.

That’s the minimum follower and engagement numbers needed to charge between $100 and $425 for a post, livestream, or video.

Can you imagine how many sponsored posts you need to produce or the number of video views you require to make the equivalent of a full-time salary?

We’ve got the data on that: 

  • Only 36.13% of creators/influencers earn between $25k — $100k. 
  • The majority — 46.34% — earn less than $25,000 and almost certainly work another job. 
  • A tiny percentage — 2.88% — earn $500k or more, and $2.62% rake in over $1 million per annum.  

Creator/Influencer Earnings Table 

Income/Earnings Bracket Percentage of Influencers/Creators in This Income Bracket (before taxes, costs, etc.)
Under $1k 17.02%
$1K – 10K14.92%
$10K – $25K14.40%
$25K – $50K15.97%
$50K – $100K20.16%
$100K – $500K12.04%
$500K – $1 million2.88%
$1 – 10M2.62%
(Based on Influencer Marketing Hub survey data)

It’s time to weigh things up.

Is the creator economy hype, or will it continue its upward trajectory? 

Potential or hype?

  1. Potential 

It’s hard to argue with the numbers.

The size and scale of the creator economy are massive: 50 million creators and influencers (and counting), a market capitalization of $100 billion, and 2 million full-time creators. 

Globally, there are 4.7 billion social media users. That’s roughly 59% of the world’s population. 

As more people join social networks, the market for influencers and creators expands accordingly. 

Analysts say that signs indicate this market is transitioning into a mature business/economic model.

This demonstrates that the creator economy continues to have huge upward potential.

  1. Hype 

We must acknowledge that only 4% of creators and influencers earn the equivalent of a full-time salary.

And, of that small percentage, only a handful earn six figures or more.

The majority (over 50%) make less than a full-time, mid-level wage in the knowledge economy sector. That’s about $33,000 a year. 

Becoming a successful full-time creator or influencer takes courage and commitment. 

You need to produce interesting and engaging content. 

You need a passion for a particular topic or niche. 

You need to grow your audience.

None of this is easy. It takes an entrepreneurial mindset to keep going: persistence, determination, and the ability to learn. 

Creators often deal with random online abuse and trolling. Behind the relative anonymity of their keyboards, people can be unkind — saying things they wouldn’t dream of uttering face-to-face.

For many who become unintentional influencers, the road to a full-time career is fraught with difficulty, and many give up along the way. 

For these reasons, we could argue that this sector is weak and that there’s more hype than long-term potential. 

The fact remains that this sector was non-existent ten years ago and now supports 2 million people full-time. That’s impressive.

A micro-industry of merchandise manufacturers, influencer agencies, and tech startups has sprung up around the creator economy. There’s a strong chance that this sector will survive and thrive over the next ten years. 

What are your thoughts on the creator economy? Does it have real long-term potential, or is it merely social media hype? 

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Dom Wells

Dominic Wells is the CEO and Founder of Onfolio. Dom is responsible for developing and implementing Onfolio’s long term business strategy. He is a serial entrepreneur with more than a decade of experience investing in and building digital businesses. Dom has grown Onfolio from a startup to a NASDAQ listed company. For Onfolio’s investors, Dom has built a diverse and profitable portfolio of online businesses that deliver consistent returns. Dom is passionate about entrepreneurship and regularly speaks on digital business strategy, online business investment and profitable growth opportunities. For Dom, diversification and exceptional talent are the keys to sustainable growth.