Creating the Next Business Model for Content Delivery

The creator economy is here to stay. Over the last 10 years, millions of people have embraced their creative abilities to find new ways to make money — not just by making videos, writing blogs, or recording podcasts, but by creating deep connections with other people through the convergence of technology and art.

We saw a lot of sketch comedy early on when YouTube launched. That first wave of creators almost made it feel like we were watching aspiring Saturday Night Live performers’ audition videos. 

We saw the need for creative tools and self publishing become more accessible. Vine caught fire because it made self-expression, distribution, and consumption even easier — and early creators took advantage of that platform as well. 

Audiences Have Become the Tastemakers

For decades, networks and corporate brand marketers decided who would be the next star. Today, that power has flipped. Anyone can sing or dance on TikTok, go viral, and be seen instantly by millions. Record executives are no longer able to dictate who’s popular; the consumer-driven platforms are in control. Warner Bros, Sony, and even shows like SNL all now look for trending new performers beyond traditional mainstream channels. The networks and labels have realized they still can curate portions of pop culture, but at the end of the day, they’re largely looking to the internet for who and what the people have already given their stamp of approval. 

As a lifelong creative, I never thought the internet would be my primary means of expression, but I fell in love with the idea that I can create and consume right from my phone. The proliferation of mobile devices is when monetization started to make sense for indie creators. 

People vocalized how artists should be able to make money. Viewership and engagement gave creators more leverage and power while working with branded advertisers. My first brand deal on Vine was $75. Two years later, I was doing brand deals for $2,000. Brands were hungry, willing, and able to actively invest in the creator landscape. 

In the early days, we saw creators selling merchandise and hosting meet-and-greets. I remember getting involved with platforms like Music.ly (before Tik Tok) that opened the door to live tipping and then watching my friends go to Discord where their audiences were smaller but stronger and fully engaged. Some folks were even able to find ways outside of advertising to put dollars directly into their pockets. 

The Rise of Short-Form Video

Short-form video has become popular because it’s so easy to consume, and viewing is easily broken up. When you compare audience engagement between YouTube creators and those on Instagram and TikTok, the former struggles to keep viewers engaged for a full 10-minute video anymore. The short-form medium is more accessible, advertising-friendly and easy for on-demand consumption. 

What Vine did well, and Instagram and other platforms have followed suit, is swiping up. Delivering advertising using algorithms, data science, and machine learning that keeps people coming back is what makes the model work. TikTok is outpacing brand marketers because they keep people swiping. Take note of how quickly a platform like TikTok has been able to fully embrace advertising without any resistance from its users. Earlier platforms had to bear the brunt of anti-advertising audiences who didn’t always stick around for complete video views. 

What’s Next: Strength of Audience > Audience Size

What we’re seeing now are platforms focused on the strength of your audience. The average Twitch creator might have a few hundred subscribers, but they’re making a worthwhile living just by having those few hundred people contributing. We see platforms like Patreon thriving because they are supplemental and symbiotic. But that strength-of-audience-support platform has been missing for Gen Z video creators. (The younger video generation doesn’t necessarily use Patreon.) In that regard, there are tens of millions of creators who are ready to find a platform where they can just kick it with their top fans in their community and receive support.

The creator economy offers only a few avenues to earn, and the advertising model is the most prevalent. We have learned from experience that no medium has remained entirely ad-supported. Network television was once completely ad-based until subscription-based cable TV, and more recently, streaming video services disrupted that model. Social media is now reaching a point where ad-based platforms are running their course, especially given new privacy laws and consumers’ desire to reclaim their rights regarding the use of their data. We will soon see which of these business models are going to succeed and which of them will flounder. 

The creator economy is based on building a strong relationship with a participating fan base. Selling merchandise, podcasting, hosting live and digital events and selling merch and/or partnering with advertisers are widely used options with tipping increasing in popularity because it allows creators to benefit solely from being a good creator, host and community builder. The money coming in is not even necessarily about the material — it’s about the connection.

Strengthening the Bonds Between Creators and Fans

The main thing I’ve noticed in this digital age is a longing to be a part of something. It’s meaningful for the everyday person to gravitate towards someone online because they inspire them or cheer them up after a bad day at work. You’re going to root for them because you want them to be a part of your life. That’s what strengthens those bonds between creators and fans.

The COVID-19 pandemic accelerated the growth of creators and self-expression these past two years, and it isn’t slowing down anytime soon. Many people got hooked on creating, embraced their mobile, socially distant, digital lives and started employing new ways to make money from it.

It is the Wild West; a direct fan-to-creator patronage or monetization model isn’t the end all, be all. But as monetization becomes democratized, creators will take ownership over these tools. Advertisers and brand sponsors now more than ever will have to buy into ecosystems rather than ad time. The money will be placed back in the hands of the fans who contribute to their favorite creators. 

Brendon McNerney is Co-Founder and CEO of Clash.

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