June 5, 2021
This decade, tech will be the wrench that splits open the closed door of the creator economy, allowing the democratisation of wealth. Let me explain how.
Tech made it possible for people to make a living out of their passion. Anyone with a grain of creativity could earn through platforms like YouTube. Enough of an earning that kids today would rather be a YouTuber than an astronaut. But as much as the creator economy allowed anybody to grow and succeed, it still created an imbalance.
Put the creator economy under the microscope and it becomes clear that the big bucks are limited to the top. There are a handful of creators securing that bag. Majority are barely scraping by.
Fortunately, technology, be it a marketplace like DYT or a tool like BuyMeACoffee, is slowly equalising this disparity. Here’s how:
- Algorithms make recommendations random.
Habitually, people search for things within their interest area. Say you’re browsing books in a store. You’ll likely scroll through genres or authors you already read. While there is nothing wrong with this system, it does lock you in a filter bubble.
Apply the same logic to social media, and you realise that the new content you’re discovering is either from popular creators or creators in your bubble. That’s why the rich keep getting richer, i.e., a few creators keep gaining more followers.
But when we allow discovery algorithms to search for us, it adds a dose of randomness. Besides showing content based on history, they also inject videos or images that do not match our previous engagement. Moreover, follower count or past performance of content doesn’t factor in the recommendation.
This is the strategy TikTok used. Which is how so many newcomers gained exposure through the platform and made it big. In short, by adding diversity to a user feed, tech enables anyone to become successful.
- More and novel monetisation avenues.
For a long time, paid collaborations or revenue sharing were the only way for a creator to earn. Now that technology has evolved and platforms are maturing, creators have new avenues to earn from their fans and superfans.
Twitch has a Tip Jar. Instagram has Badges. Twitter is now experimenting with Super Follow. Then there is the novel NFTs. Compared to ad-based models that helped only those with higher reach, these direct payment models help every creator. Creators can pocket significant amounts even when they have a modest following.
- A creator-brand match made in heaven.
The simplest way technology enables the creator economy is through marketplaces connecting small creators with brands. They help close the growing income disparity where mega influencers have outsized earnings while micro or nano-influencers still struggle.
An added advantage here is data-driven matchmaking. Newer branded content marketplaces rely on technology to match a creator to a brand. This leads to a better fit, and so the one-off collaboration often turns into a long-term partnership, driving more money towards creators with limited following.
Every creator is like a small business. In the beginning, being bootstrapped is sufficient. But to turn a passion into a profession, funds are necessary. Only a subset of creators can get them solely through advertising sponsorships. For the rest, every day is a hustle to break through the next level of growth.
But we see more and more platforms working towards bridging the gap. Some, like Clubhouse, are using accelerator programs to offer financial support to up and coming creators. Others, like Instagram, are launching creator shops.
But at the crux of it, the impact is the same. Tech is enabling the creator economy. Finally allowing average human beings with extraordinary influence to earn as much as any prized celebrity.