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- How Does Money Flow in the Creator Economy? (Part 2 - Creator Perspective)
How Does Money Flow in the Creator Economy? (Part 2 - Creator Perspective)
Being a successful creator requires the same soft skills and business acumen as any successful entrepreneur.
James Song
April 17, 2024
I studied French, Politics and Economics at university.
I do not live in France, work in politics nor am I rich.
Does anyone else find their bachelor's degree irrelevant to their lives?
I did, however, envy that some of my favourite creators are making a lot of money with the assumption they did not even go to university…
Having studied the most successful creators (those earning over $100k per year)… I found that 80% of them have a bachelor’s degree.
Being a successful creator requires the same soft skills and business acumen as any successful entrepreneur.
I dived into how these creators achieved it…
But what happens if you don’t have millions of followers - no brand deals? No income? Wrong.
Creators are fighting a losing battle with algorithms designed to keep users addicted to the platform. They are not designed to share the wealth.
Creators have become a slave to the algorithms - chasing virality.
It’s not paying off.
Social platforms are great for building audiences, not businesses. e.g TikTok’s failed Creator Fund have proven ineffective, paying out only a few bucks for millions of views.
The real money lies in ownership and revenue diversification — not just followers.
For creators who earn more than $100k there are 4 key revenue streams:
Digital products
Platform payout
Physical products
Consulting and coaching - online and offline
According to Kajabi (the world’s leading digital product tool for creators) online courses are the biggest revenue driver for creators.
Creators on Kajabi (helping creators to make digital products) made over $2 billion dollars in the last year alone.
Here are some examples of creators who have diversified revenue:
Consulting
Online Courses
Physical Products
Brand Deals
Subscriptions
Advertisement on Newsletter and Podcasts
Platforms are still important…
to build an audience…
to build a community…
to build your lead generation.
Youtube is king… for now
If six-figure creators lost access to all their YouTube accounts, nearly half would lose $50k+.
Successful Creators grow audiences on socials and revenue on their own sites
What next?
As the creator economy matures - so too will the mechanisms of a traditional labour market.
Creators want to unionize. For the same reasons creators are looking for more ownership over their businesses, they’re also looking for more protection against the algorithm.
A union would ensure that creator businesses could thrive with fair pay, platform policies, content rights, and more. Nearly half of six-figure creators would join a creator union in the future.
Being successful as a creator requires all the skills of any successful entrepreneur. The market has matured beyond a ‘first mover advantage’ state. Let’s play.