Share 2022 is shaping up to be yet another banner year for the creator economy.
In fact, industry leaders estimate that the size of the creator economy marketplace will soar to a whopping $104.2 billion this year and will continue to grow by the day.
Last year, investors poured in a record $1.3 billion dollars into the space, in a clear and strong indication that the expansion of the creator economy won’t slow down anytime soon.
Creators are becoming their own businesses; creators are businesses themselves. To date, there are at least 50 million creators worldwide. And an index report by Stripe found that four out of ten creators earn an annual living wage of at least $69,000 year-on-year, with a growing number of creators earning through their passions and what they do best. That’s the passion economy right there.
It’s not far-fetched that the creator economy will catch up with the gig economy in terms of valuation. At present, the worldwide gig economy is expected to be valued at about 1 trillion to 4.5 trillion dollars — yes, trillion — by 2023. The creator economy is following a similar trajectory — with its valuation seen to hit at least one trillion dollars by next year.
But wait, what’s the creator economy again?
In a nutshell, creator economy refers to the multitude of businesses built by independent creators — from vloggers to writers, to influencers and the like. And most of these creators can be found on social media. A subset of the creator economy is the passion economy, where the creator makes money off their skills and passion. Both the passion economy and the creator economy are born out of side hustles launched by self-employed individuals. These are closely related to the gig economy.
Creator and Passion Economy vs. Gig Economy
It may seem confusing, but there are a few differences between the creator and passion economy and the gig economy.
Both the passion economy and creator economy utilize the convergence of technology, entertainment, and media. There’s a wide variety of creative products and services available, so there’s also a lot of skills and passions for people to monetize.
If your music career fails, you can always resort to cooking videos. Right, Ariana?
In contrast, the gig economy lets people work in so-called narrow services, such as food delivery, parking, or transportation.
As for monetization schemes, freelancers in the gig economy are most of the time limited to one-time revenue or pay-per-trip payments.
For example, with food delivery apps, gig workers only earn a portion for every delivery they make. This puts pressure on gig workers to successfully score a considerable number of bookings or deliveries for them to earn an adequate amount of money. If they don’t manage to get any bookings, they could earn nothing for a day.
In the creator and passion economy, workers can get ongoing revenue from building a loyal fanbase or audience. Here, the worker — or creator, rather — puts out exclusive content all to do with their passion, in exchange for a subscription fee from their audience.
Creators can also work with brands for ads or campaigns and they can also earn money through the monetization tools in the platform where they put out their content. Take YouTube for example. The video-sharing app uses a multi-tiered payment scheme for creators, where it takes into account the number of hours the subscribers have consumed, the creators’ number of subscribers, and the number of views generated by the content creators’ videos.
Why Creator Economy Will Continue Growing This Year
Now back to our main topic. What’s in store for the overall creator economy (this includes passion economy, by the way) this year?
Here are a few points that point to the continuous success of this space.
Authenticity Is Key
Audiences will crave more content — the authentic type — from normal people.
Fanjoy founder Chris Vaccariano was quoted as saying in a report that:
2021 became the era of relatability. The perfect Instagram photos dissolved, and Gen Z came out swinging, pushing for real people to be stars. Overly edited photos, picture-perfect lifestyles, and celebrity status took a back seat to incoming TikTok stars who are your classmates, co-workers, and family members.
He continued:
In 2022, this trend will continue. We’ll see TikTok dominate with normal and regular people, finally breaking out of the mold and becoming people with real influence. Coworkers will quit jobs and pursue content creating full time and build real careers doing what they love.
Audiences Want More
Variety is the name of the game here.
Audiences want a variety of content — from vlogs, to podcasts, to masterclasses, name it. There is an increased demand for great content and services, and with this demand, the creator economy system is thriving.
Creators can work on specific niches to cater to a variety of audiences.
The Race for Creators
With this demand, platforms — even those that are already established (yes, we’re looking at you, TikTok and Facebook), will attract more and more creators.
Will dogfluencers be on the rise? We sure hope so!
Their move to onboard creators is anchored on the reality that content creators have the power to influence consumer behavior. And since most content creators put out their work on social media, Facebook, Twitter, TikTok, and major social media companies see the need to defend their turf. They will flex their muscles just to corner the biggest content creators.
These giants will definitely roll out more monetization schemes in an effort to keep creators and their audiences engaged on their platforms.
You gotta do what you gotta do, right?
Companies will also play a role to help content creators stay in the cutthroat industry that is the creator economy.
Easier Access To Tech Is a Big Boost
In the previous years, creators found it a little bit challenging to come up with great content because they cannot afford high-priced equipment. For instance, vloggers had to save up a considerable amount of money just so they could buy the camera of their dreams. The same was true for podcasters as audio equipment has traditionally been somewhat expensive.
Now, most content producers utilize mobile devices such as smartphones to capture, record, and edit videos. There are also thousands of apps and tools such as video editing programs that are easily accessible for creators.
Venture Funds Will Pour In More Money
We have repeatedly written a lot about Li Jin, who owns the venture capital firm Atelier Ventures. Her company focuses on cultivating a community for creators, including through a Slack community and TikTok creator database. The program hands out checks between $100,000 and $300,000. Its growing portfolio companies include Substack, Stir and Luma, among others.
Li Jin is a firm believer of what the passion economy — and the overall creator economy — can do. In a nutshell, she says, “users can now build audiences at scale and turn their passions into livelihoods, whether that’s playing video games or producing video content.”
This, Li says, has huge implications for entrepreneurship and a rethinking of the concept of jobs and livelihood in the future.
On our way to the future, brb.
Whatever happens, one thing’s for sure: the next 10 months will be exciting for the creator economy.
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