A shift towards the creator’s economy

Since the pandemic, many companies have drastically changed their operations due to the boom of e-commerce, videoconferencing, and the availability of digital infrastructures. Many working environments have integrated working-from-home policies or implemented remote job opportunities. McKinsey & Co acknowledges these events, which also presents the consultancy’s vision of working after COVID-19. The report has other results: e-commerce is introduced as a driver of change in markets and customers’ buying behavior and recognizes the growth of purchases through social media. McKinsey points out that alongside the increment in purchases from e-stores, there has been significant growth in transactions by streaming material on digital platforms.

Different social networks allow users to consume and create streaming content in formats such as audio, video, or music. Initially, content creators aimed to generate traffic as a leisure activity; now they realized that it is possible to make a living out of it. How? Some streamers sell specific products and promote them like in an old TV infomercial, while others are entertainment-oriented and get their revenues from digital gifts and views. For example, if you are able to get sufficient attention, you could work full-time by recording yourself while playing a video game. These activities provide flexibility, convenience, and autonomy and have lured many users to focus entirely on monetizing their content. Originally, these creators were not noticeable for brands or large audiences, and the great majority created the content simply for self-fulfillment. Now, many accounts have millions of subscribers waiting for weekly material and ongoing offers from brands that sponsor their content.

Man sitting in a chair while looking at a camera
Photo by Mostafa KordZangeneh on Unsplash

However, streamers are just a type of “content creator,¬†which refers to the people who work creating entertaining or educational material on channels or mediums. Vloggers, gamers, influencers, and beauty gurus are some categories taking over the social media landscape. So, what does it take to become one? Supposedly, anyone can make money from online content if they have a social media account, creativity, and something entertaining to bring into the platform. Pretty simple right?

A great example is the case of Chinese influencers. In China, the market for live streamers is already an empire, where last year, two of the influencers with most traffic sold in a day roughly three times what Amazon sells daily, $3 billion worth of goods. Moreover, they have built large fortunes with just their accounts and reviewing products, leading them to gain celebrity status.

So far, the “creator’s economy” has experienced ongoing growth and expects to reach $104 billion in 2022. Naturally, with such forecasts, anyone would want to join in and start their online business journey; unfortunately, as with everything, the creator’s economy has a downside too. There have been multiple scandals regarding scams of fraudulent investments in social media platforms. The American Federal Trade Commission stated that in 2021, 95 000 people reported $770 million in losses from social media frauds. Another issue is related to the process of reaching success. Although starting is easy, getting to the top and generating money can be challenging. We must not forget that these communities are crowded; thus, standing out and having a unique channel is difficult. Recently, YouTube addressed the issue through a new feature that is about to be implemented on its homepage. The new “YouTube handles,” by giving a sort of brand to the content, will allow creators to interact directly with their subscribers and viewers. As one of the most saturated platforms in terms of content communities, the handles are supposedly a solution to ensure unique material. Hopefully, this will help viewers and creators gain genuine and worthwhile relationships.

Despite the downsides mentioned, the creator’s economy has connected users across the globe and has brought original trends to social media. Sprout Social states that “successful creators do not just churn out content, they inspire communities, they bring people together around shared interest, hobbies and identities.” In addition, they have influenced job responsibilities within marketing teams in brands. Social media managers, for example, have grown in authority in their work environment, and their activity has become crucial for increasing brand awareness. In conclusion, creating value is also an outcome of these activities that enrich small and big companies. The concept is simple and gives the creators autonomy and certain independence, encouraging a new form of entrepreneurship.

Ultimately, the creator’s economy is a direct result of a shift from traditional media to digital platforms. Right now, content creators go beyond the category of entertainment. Large audiences take their channels as references for news and view them as figures with authority. So, we should not underestimate or overlook the influence of these new types of information. Thus, what is up for question is if traditional media is keeping up with the pace of ever-changing trends and digital innovation. Is it adapting as fast as the creators’ economy is?

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