According to CitiBank’s Global Perspectives & Solutions (GPS) report for 2023, the Creator Economy generated around $60 billion in revenues in 2022 and is expected to rise by 9 percent annually through 2024, when it may reach $75 billion in revenue.
For an industry that barely existed 5 years ago, Citi reports that there are over 120 million content creators with around half of the revenues stemming from ad-based video platforms, like YouTube while the other half is spread across a wide array of industries like publishing, education, and podcasting, among others.
According to the Citi, the amount of net revenue a creator makes after paying fees to the various platforms varies considerably. The report states that a writer for Substack generates, on average, $25,000 per year, while the average creator that uses Patreon generates $6,000 per year. At the other end of the spectrum, creators at twitch, podcast, youtube, and roblox on average earn $530, $490, $150, and $50 per year respectively.
According to the report, the inverse relationship between the number of creators on a platform and average revenue per creator suggests a small subset of creators perform far better than average.
After examining the likes of YouTube, Twitch, Patreon, and Substack it was discovered that the creator economy is highly concentrated. It was observed that at YouTube, over 90 percent of YouTube subscriptions came from less than 5 percent of the channels.
With the advent of the internet and smartphones, content creation was no longer centralized. As such, gatekeepers like studio heads or masthead editors were no longer required. However, the report stated that social media platforms like Meta or TikTok did not share the spoils with the content creators and kept all the revenues for themselves.
The concept of Creator Economy was then created as things began to change across industries as content creators found ways to monetize their content directly with their fans.
Citi in the report states that creators do need help, and platforms can assist. To provide assistance to creators, the platforms charge fees that can vary from less than 10 percent of creator’s revenues to as high as nearly 85 percent. This depends on the value the platform provides across five functions including creation, hosting, distribution, promotion, and monetization.
Citi in the report stated that there are three areas worth watching out for in the Creative Economy. The first being traditional social media firms which according to them may begin to share some of the economic spoils with content creators. They stated that platforms like Twitter for example may begin to emulate YouTube’s business model. Or, other platforms like Instagram and Facebook pushing further into e-commerce.
The second thing to look out for is Web 3.0 which may create opportunities for creator economy platforms to leverage augmented reality, blockchain, crypto, and NFTs to alter the economics of the creator economy. According to Citi, these tools can help facilitate a direct relationship between content creators and fans with a diminished role for digital intermediaries.
Artificial intelligence which is the third way outlined by Citi may alter the creator economy in several ways including helping with content creation and helping brands find the right influencer or helping consumers find the right content.