- Hey, Did you just skip that ad?
The one that plays before this video?
Well, thanks a lot.
Now we don't get the ad money.
It's like you ripped the eight tenths of a cent
right out of my child's mouth.
- Welcome to the creator economy,
a vast community of writers, artists, personalities,
and... pets? --who make money by posting original content
on one of a dozen or so major social media platforms.
It's one of the fastest growing industries in the world,
with a recent study, predicting
that 50 million people worldwide
will soon consider themselves creators.
- But is it really a job,
or more of a small business, or just a crap shoot?
(bright music)
There are several ways to make money as a content creator,
and the oldest is advertising.
Most of the major platforms offer some kind
of ad revenue sharing with their creators.
The amounts vary depending on popularity and platform.
TikTok will pay as little as 30 or 40 bucks
for 1,000,000 views,
while the same number on YouTube can get you thousands.
- This is still generally not enough to pay the bills,
so many creators look for brand sponsorships,
when advertisers pay them directly
for promoting products within the content.
You can also sell your own merch,
or even start your own product line like fashion, cosmetics,
or exercise equipment.
Of course, all these options only exist
for creators that already have a large, dedicated fan base.
- A recent trend offers creators more direct ways
to monetize.
Sites like Patreon, Substack, and OnlyFans allow artists,
writers, and personalities
to sell access to their work directly to their audience.
Twitch lets you financially support your favorite streamers,
and even Twitter now has a tipping option.
- Wow!
With all these money making avenues,
it seems like being a creator
might not be such a terrible financial decision after all.
- Well, we won't know until we-
- [Both] Run the numbers.
(triumphant music)
- Two years ago, Kyle started a YouTube channel
to showcase his ukulele skills.
After a lot of dedication and hard work,
he now manages to put out a quality video every week,
and gets a respectable 80,000 views on average.
That puts him squarely in the top 5% of YouTubers on earth.
Nice work, Kyle.
- For his success,
YouTube pays him a weekly ad share revenue of $200.
- Okay, not great, but-
- Oh wait, forgot to take out YouTube's cut.
- Ouch.
That's okay,
because Kyle is finally getting some branded sponsorships,
about one a month.
He's also selling a bit of merch
and has a dozen Patreon supporters
for a grand monthly total of $2,343.
Not bad for a side hustle.
Wait, what's that, Kyle?
This isn't your side hustle?
You quit your job for this?
- Most serious creators will tell you
this is no part-time gig,
between the writing, shooting, editing, replying to fans,
making graphics, looking for sponsors, studying analytics,
designing merch, and running a Patreon,
(sighs)
managing a successful channel
can overwhelm a team of people, let alone one.
When you factor in equipment costs
and the two years he spent building his audience,
Kyle is working far below minimum wage on this dream job.
- Meanwhile, his job security and benefits
are practically nill.
He's busting his hump to create content
for a giant tech company that gives him no health insurance,
no retirement, and at any time could make changes
to their algorithm or revenue plan
that totally disrupts his business strategy.
- Kyle's predicament is sadly common
for successful content creators.
Sure, the handful of top channels can pull in millions,
but earnings drop steeply as you go down the ladder.
One study estimated that you can be in the top 3%
of YouTubers and make less
than one third the median US income.
In order to make the us median income on Twitch,
you have to be in the top 0.015% of active streamers,
for the median income.
- And those who are already wealthy and famous
enjoy a massive head start.
Having a glamorous life as a backdrop gives you a big edge
in the battle for eyeballs.
And who else would have the time
to spend years building an audience for no pay?
If you look at the highest earning Instagram accounts,
you'll notice that they all got famous
via traditional media.
I wouldn't exactly call them successes
of the creator economy.
- Even for those who manage to eke out a living,
burnout is a constant hazard.
Unlike a musician or filmmaker that can release a new album
or film every few years,
creators must be constantly posting new content
just to not fall behind.
Audiences and algorithms punish time off severely,
and with all the harassment, toxicity, and judgment
on social media,
the spotlight can take an emotional toll
on even the most successful online celebrities.
- And yet, millions of people still aspire to be a creator.
29% of Gen Zers said they wanted to be a YouTube star.
If it's your dream,
probably nothing we've said has changed your mind.
Why?
Because there's also a non-financial benefit
that creators are pursuing.
- Call it fame, attention, or clout.
Humans have always had a keen awareness
of where they rank in the social hierarchy,
and social media has turbocharged that need.
As we live more and more of our lives online,
our perception of self worth has become linked
to likes and follows.
A handful of tech companies are now the arbiters
of how status is allocated,
and the more we battle for it, the more money they make.
- There's a lot of talk
about how fast the creator economy is growing.
But if you look at where the investment dollars are going,
it's not to the creators themselves,
but to companies that sell tools and services to creators.
Pietra helps influencers launch product lines,
Pearpop monetizes your social media interactions,
and NewNew lets you charge fans
to vote on what you have for breakfast.
In this way,
the creator economy is less like an artist marketplace
and more like a gold rush.
A very small few will strike it rich.
The majority crawl home empty handed,
but the smart money is on the people
who sell the picks and shovels.
- There are a lot of companies out there
that want to make being a creator seem easier
and more profitable than it really is
because they make money off the dreamers.
- Julia and I have done pretty well as creators,
but we're part of a big team that makes this show a success,
and almost all of us have other jobs.
And we have the financial and marketing support
of a large organization behind us.
- I promise, we're not here to crush your dreams.
Being a successful artist or entertainer requires talent,
hard work, and a realistic assessment
of the financial landscape.
- So if you are one of the 50 million creators
across the globe, by all means, follow your dreams.
Just make sure they're your dreams
and not ones that have been sold to you by someone else.
- [Both] And that's our two cents.
- [Julia] Thanks to our patrons
for keeping Two Cents financially healthy.
Click the link in the description
to become a Two Cents patron.
- If you've dipped your toe in the creator economy,
let us know how it's going in the comments below.
(cheerful music)