Creator Economy 101: A Comprehensive Guide to Boost Your Income as a Content Creator
If you upload videos to YouTube or post stories on Instagram and expect to make money from it, you’re part of the creator economy.
This burgeoning economic sector has allowed creators of digital content to monetize their work in new and unprecedented ways, and it’s shifting the power dynamics of content creation.
Case in point: In March 2020, a young factory worker in Northern Italy lost his job during the coronavirus pandemic. He started making TikTok videos, parodying some of the most absurd life hack videos on the internet in hilarious fashion.
Today, Khaby Lame (21) is TikTok’s number two star, with around 100 million followers. And he’s earning between $50,000 and $84,000 per post.
Over on YouTube, Ryan Kaji saw a similar meteoric rise a few years ago, thanks to his toy unboxing videos. In 2020, the nine-year-old became the highest-earning YouTuber for the third year running, cashing in $29.5 million. His channel can boast over 47.5 billion views.
Kaji’s first video, which has garnered over 52 million views to date.
At the same time, platforms are vying for creators’ attention by introducing new features to help them monetize their content.
Platforms Create More Options for Creators
YouTube is introducing a new Super Thanks feature that lets viewers tip creators on individual videos.
Earlier this year, Twitter announced its new Super Follow platform, which will allow people to paywall exclusive content in a dedicated tab.
And even the microblogging platform Tumblr is jumping on the bandwagon. Last July, it rolled out a beta version of Post Plus. This feature makes it possible for creators to charge subscription fees in return for access to premium content.
If you’re a creator, many of these recent developments offer fantastic opportunities. But they can also be overwhelming – especially if you’re just starting out.
To help you, this article takes a closer look at what the creator economy actually is, what the most important recent changes have been on different platforms – and how you, as a creator, can benefit from them.
To dig deeper, we talked to 5 of TastyEdits’ own creators. They have a collective cross-platform following of 4 million, and offer a glimpse under the hood of working within the creator economy.
Table of Contents
What Is the Creator Economy?
At its core, the creator economy encompasses the businesses of independent content creators who monetize their work via a huge array of platforms, from YouTube, TikTok, and Instagram to Clubhouse, OnlyFans, and Patreon.
More recently, the term has also been used to include the increasing number of tools and services designed specifically for these creators. These range from Instagram talent agencies to financial software for monetization management.
According to economists’ estimates, this entire economic sector is worth over 104 billion as of mid-2021.
And for good reason.
Today, 90% of content – text, audio, photo, and video – that Gen Z consumes is created by individuals, not corporations.
This trend has emerged over the last decade. However, the COVID-19 pandemic supercharged it. Like Khaby Lame, millions of people suddenly had time on their hands to create content – and hundreds of millions more sought out entertainment during lockdowns and quarantines.
Plus, content creation is growing more accessible because of technological advances. Thanks to the high-quality cameras of today’s smartphones, almost anyone with great ideas and a modicum of tech know-how can become a creator.
Responding to this trend, established platforms are rolling out changes, making it easier for creators to live off their work – and, naturally, to claim their own portion of the pie.
At the same time, there has been a boom in new services and startups catering to creators’ needs. Investors are also seeing the writing on the wall and are supporting these new businesses heavily. In 2021 alone, they provided more than $1.3 billion in funding for over 500 new creator-centric companies.
How Many Creators Are There?
Speaking broadly, anyone who generates content for online platforms can be called a creator.
However, in the context of the creator economy, the term “creator” refers primarily to those who are systematically generating content. Specifically, to those who are aiming to monetize it.
Worldwide, there are approximately 50 million such creators. Of these, 2.3 million say that content creation is their full-time job, earning them a livable income.
In the future, this number is likely to rise. Not only because of the increasing demand for content, but also because becoming a YouTuber, or an Instagram influencer has evolved into a financially lucrative career.
A recent survey of children aged 8-12 found that more of them aspired to be YouTube stars (29%) than astronauts (11%):
What Platforms Are Creators Using?
In 2021, there is a huge – and still growing – variety of platforms on which creators can monetize their content. However, many are still using the big social media platforms as their primary bases, before channelling their audiences towards other monetization platforms.
Among the biggest platforms for professional creators are YouTube (over 12 million creators, 1 million of them full-time), Instagram (over 30 million creators, 500,000 of them full-time), and Twitch (2 million creators, 300,000 full-time). TikTok is not far behind, and Facebook and Twitter are aiming to catch up by wooing creators with new features and bonuses.
In addition, separate generalist monetization platforms like OnlyFans, Patreon, and Ko-fi allow creators to set up subscription programs or tip-jars to bolster their income.
Recently, a number of smaller but highly specialized content creation platforms has emerged. These include Clubhouse, a social audio app, and Substack, a paid subscription newsletter platform.
Assessing how many people use these different platforms – and thus how big the potential audience for creators is – is difficult. Not all platforms publish user numbers consistently. Clubhouse, for example, only gives weekly active users, a figure which is currently at 10 M. Tiktok’s numbers don’t include its Chinese branch, Douyin, which sees as many as 600 M daily active users.
How Can You Make Money in the Creator Economy?
If you’re a creator yourself, it can be hard to navigate the different avenues to monetize your content. In the creator economy, there are a few main ways that you can earn a living from what you generate.
1 - Brand Collaborations and Influencer Marketing
Let’s start with the big one.
To date, brand collaborations are still the single largest source of income for most creators out there.
According to a recent survey by Influencer Marketing Hub, 77% of creators they surveyed depend on brand deals as their main income stream. That’s three times as many as every other revenue source combined.
Brand deals can take different forms.
One sought-after avenue is brand sponsorship. Here, businesses pay a fee for you to market their brand. Plus, you will often receive free products and services to showcase in your content. However, to benefit from brand sponsorships, creators need to have a substantial following.
Most straightforward are affiliate programs. Here, creators promote a particular brand in their content. If their viewers then follow their links and purchase products from that brand, creators receive a commission.
How much brands pay creators varies wildly, however.
To create more transparency, and help creators be paid more equitably, the app F*** You Pay Me was launched recently.
Its purpose is to serve as an equivalent of Glassdoor for creators, where they can leave reviews of brand collaborations, compare rates for ads, and share information to help negotiate sponsorship deals.
2 - Turning Personal Brands Into Business Brands
As a content creator, you’re constantly shaping your own personal brand – how you present yourself to your audience, how your fans perceive you.
One way to generate additional income is to turn this personal brand into a business brand.
For example, Dude Perfect is a hugely successful YouTube channel, with over 55 million subscribers. It started out in 2009, with five college roommates creating comedy and sports videos.
Thanks to clever branding, though, it has evolved into a multimillion-dollar company, which can boast its own TV show on Nickelodeon, a flourishing influencer merch store, e-books, documentaries, and, most recently, a song release.
Similarly, YouTube’s highest-earning star, Ryan Kaji, can boast his very own brand, Ryan’s World.
Among other things, it produced a TV series, Ryan’s Mystery Playdate, a video game for PlayStation, Xbox, and Nintendo Switch called Race with Ryan, and a semi-animated series – Super Spy Ryan – on Amazon Kids+.
In addition, big retailers like Target and Walmart carry his branded merchandise.
3 - On-Platform Monetization and Subscription Services
A third option for content creators to generate income is to harness various on-platform monetization tools, and any of a number of external subscription tools.
On-platform monetization is currently being extended by many social media giants. Mark Zuckerberg, for example, recently announced that Facebook would be rolling out a slew of new monetization features, and investing $1 billion to support creators on Facebook and Instagram:
Among other things, Facebook is offering a new subscription newsletter service, Bulletin, to attract writers and challenge rival Substack.
In addition, creators now earn on ads run on videos on Facebook and IGTV, and reaching tipping milestones during their live streams. Plus, Zuckerberg announced that additional funding would be available to support up-and-coming creators with standout content.
Similarly, Snapchat introduced a daily $1 million bonus, shared among viral creators, when it launched its in-app short video Spotlight feature to compete with TikTok.
Furthermore, many platforms let creators set up subscription paywalls for original content, or offer them a cut of ad revenues.
Platforms Take a Share of Creator Success
However, when it comes to direct on-platform monetization, creators should keep an eye on revenue sharing fees. In many cases, platforms keep a substantial slice of creators’ income.
For example, YouTube claims 45% of ad revenue, and 30% of revenue from channel membership, Super Chat, and similar features. Twitter’s Super Follow takes a cut of 20% once you go over a lifetime total of $50,000, else it’s 3%.
In contrast, Substack allows authors to keep 90% of subscription fees. Patreon creators, too, walk away with 88-95% of their revenue.
Facebook announced that it would let creators keep the entirety of their earnings on many of its services, although these terms are limited until 2023.
However, in many cases there are additional processing, payments, and transaction fees. For example, the final payout for Substack is usually closer to 80%.
4 - External Subscription and Tipping Services
In addition to on-platform tipping services, like during live streams on Instagram and Facebook, there are also several external tipping platforms that creators use for additional income.
Among the most prominent are Patreon, Buy Me a Coffee, and Ko-fi. These platforms typically take a fairly small cut – Patreon’s top tier will take 12% – or even none.
Ko-fi, for instance, hands over the entire revenue. Instead, it charges a subscription fee for premium features.
5 - NFTs
Finally, one of the most recent monetization options for creators are Non Fungible Tokens (NFTs). These are blockchain-managed digital assets that can be applied to almost any digital content, from virtual artwork to access to online courses.
Among other uses, digital artists can sell ownership of their work on several virtual NFT art marketplaces, such as Rarible and SuperRare.
On Rarible, for instance, one artist going by the pseudonym of Dikasso earned $120,000 through NFT sales from collections of stoner cats, hash demons, gorillas, and sewer rats.
How Much Money Do Creators Make?
With the new wealth of opportunities and monetization options, more and more people see content creation as a lucrative, viable full-time career.
But how much do creators actually make?
This question is difficult to answer because there is a massive gap between the top-earning creators on every platform, and those who make little to nothing off their content.
For example, only 2% of creators on Patreon make the monthly minimum wage from the platform.
Only 0.2% of Spotify creators make more than $50,000 per year – the US median worker’s income. Even just making $1,000 off the platform is something a mere 3% of its creators achieve.
And on YouTube, only 3% of creators manage to make approximately the annual US minimum wage.
In contrast, here are the top earners on each of the most prominent platforms:
On Twitter and Instagram, monetization is primarily via brand deals, and figures on monthly earnings are hard to come by. There is, however, a clear leader in price per sponsored post: Soccer player Cristiano Ronaldo, who reportedly gets up to $1.6 million for a post on Instagram, and up to $869,000 for a tweet.
My body is my weapon. It’s the most important thing to me. In football, we are always told to eat well and train— Cristiano Ronaldo (@Cristiano) June 2, 2021
well to have a longer professional career, but to me, recovery is a key ingredient. That's why I choose the best in recovery – @Therabody pic.twitter.com/G8Uwy67miQ
Cristiano Ronaldo currently takes in the most per sponsored tweet.
A June 2021 report by Influencer Marketing Hub offers more in-depth insights. It surveyed 2000 creators across platforms, from Instagram and YouTube to TikTok and Twitch, to create a benchmark overview of their income.
According to these numbers, only 0.53% of creators make more than 1 million annually. This suggests that the chance of taking the creator’s path to riches is slim.
However, the survey also found that 43% of creators report that they earn over $50,000 annually. And 78% of full-time creators said they earned more than $23,500. Overall, this means that a decent percentage of committed creators can make a livable income from their content.
Notably, the same study also found that there is no definitive correlation between creator income and follower count.
At the income level that most creators aspire to ($500k-1M), there is a maximum income difference of half a million dollars — but a difference of only 1.8K followers between some creators.
Broadly, it seems that above a certain level, the number of followers matters less than the strategies that creators pursue to successfully monetize their content.
How Much Do YouTube Creators Make?
For YouTube, some more insights are available thanks to statistics collected by Omnicore.
According to these figures, the number of five-figure YouTube channels grew by more than 50% last year.
The fee YouTube influencers charge for sponsored videos varies widely according to subscriber count. Channels with 500-5,000 followers charge an average of $315, while those with 500k+ charge around $3,857.
Most YouTube channels get paid $0.50 per 1,000 video views. Channels with a solid audience earn between $2 and $11, according to a survey by Business Insider.
Overall, though, how much YouTubers really earn depends on a complex calculus of follower count, views, and monetization strategies. For more concrete scenarios, Influencer Marketing Hub provides an income calculator.
The Economic Response: New Services and Monetization Methods for Creators
With the rise of the creator economy, a huge range of new services and tools are hitting the market. Here are some of the most notable ones.
Recently, Karat launched a credit card aimed specifically at creators, to pay for business-related expenses.
“Traditional banks care a lot about FICO [credit scores],” Karat CEO Eric Wei, a former product manager at Instagram Live, said in a TechCrunch interview. “A lot of YouTubers, when they’re blowing up, they don’t have time to think: Let me make sure my FICO is awesome as well.”
In the music industry, Hi.fi is making waves. This new business management platform aims to automate the royalty collection process for artists across disparate revenue streams.
Talent Management Agencies
A massive number of talent management agencies has sprung up, targeting young creators with high potential.
Typically, agencies like Viral Nation and NeoReach help creators grow their personal business by allowing them to focus on content creation.
The agencies themselves take care of connecting influencers to businesses, negotiating contracts, producing merchandise, finding PR and event slots, and tracking down various other business opportunities.
In many cases, they also arrange collaborations with other influencers across social media platforms.
In addition to financial tools and services, many new startups provide ways for creators to manage their everyday business.
Tubular Labs, for example, provides cross-platform video analytics.
Clout Jam provides a bespoke campaign management platform for creators and social media influencers.
Most recently, MoeAssist rolled out a tailored project management and invoicing platform for influencers to keep on top of their work and get paid on time.
The Challenges of the Creator Economy: How Creators Face Them
Despite the positive dynamics in the creator economy, and the numerous upward trends, many challenges remain for creators, as they themselves highlight.
Audience Fragmentation and Too Many Competing Platforms
One of the main issues is the fragmentation of audiences across platforms. This is only made worse by the fact that some of them are incompatible, and even penalize links to others.
As a result, many creators are moving towards larger brand sponsorships, to avoid splitting their income into too many streams.
“A lot of the subscription platforms are frowned upon and sometimes they take away people’s entire pages because of it,” Alanna Pearson explains. She originally became a content creator at 17, when she took up modelling to improve her personal perception of herself.
Since then, Pearson has amassed a cross-platform following of 500k fans, spread over YouTube, Instagram, TikTok, Snapchat, Twitter, Patreon, and OnlyFans. “I’ve worked on getting more into brand deals and other forms of income since then.”
Lindsey Adkinson has been working as a creator since 2015 and has over 450k followers across YouTube, Instagram and TikTok.
She has had similar experiences: “I have had to ask myself which platforms and messages are most important. Why did I start, and which platform allows me to share the message that matters most to me?”
“It’s much easier to be on one or two platforms and create quality content, than to create a mass quantity for all platforms and lose your purpose,” Adkinson observes.
Keeping Up With Fast-Paced Content Trends
Content trends are fast-paced and creators have to keep up to stay relevant.
In a recent feature in the New York Times, many young creators cited the stress of following trends and generating corresponding content fast enough as draining their passion.
This is especially true on platforms such as TikTok, where algorithms decide what appears on users’ main “For You” page.
“Recently, there’s been a trend in my niche towards less ‘perfect’ and more casual videos,” explains Olivia Marie, who’s been a professional creator for 8 years and has a following 230k across YouTube, Instagram and TikTok.
“For me, the best way to deal with these changes is to focus on making content that is valuable and that I enjoy.”
Adkinson agrees: “I am seeing a lot of people shifting from extremely curated content to more realistic and in the moment.”
The reason? “It seems like a lot of people want to relate to you vs. just wanting to see pretty, produced videos and photos. Vlogs, real conversations, and iPhone photos are performing the best lately,” she says.
“Creating content that you love that people also want to consume, staying relevant, and keeping up with the trends are some of the biggest challenges for content creators,” Pearson adds. “In my experience, the best way to cope is by collaborating with other people and trying to broaden your capabilities.”
Intransparent Algorithms Decide Creators’ Fates
Finally, a major hurdle that many creators face are the algorithms that decide which pieces of content go viral, and what drops straight into oblivion.
“My main challenges as a creator are the ever changing algorithms and platform updates,” Adkinson explains.
“It seems every day we are faced with new features and new things we have to do in order to keep up. It can sometimes feel really overwhelming to create in so many different places.”
Adkinson’s suggestion? “I wish platforms would listen to creators more and be a bit more transparent about what they actually want you to do to perform well.”
Other creators, such as GiaNina Paolantonio, share this outlook. Her trajectory as a creator on TikTok jump started three years ago when her acting and dance career blossomed.
Today, she has a cross-platform audience of 4 million. “I wish I knew the algorithms that TikTok and Instagram use, as they change constantly. Finding that groove that both these platforms want can be challenging.”
Takeaways For Succeeding in the Creator Economy
The creator economy offers a wide range of opportunities, platforms, and tools for both new and established creators to distribute and monetize their content and earn a living.
However, to become successful and master the challenges thrown at creators, it’s crucial for them to strategize and focus on their strengths.
“I would tell new creators to really understand why they want to be a creator and what their long term goal is,” advises Adkinson.
“It is so easy to get caught up in a trend, when those trends change so quickly. It’s much more sustainable to know your vision and stick to that.”
Paolantonio adds: “I would say don’t focus on the money and be as real as you can to create your fan base and the monetization will come organically.”
When it comes to monetization on a broader basis, it is important for creators to be aware of all their options, to harness the growing arsenal of tools at their disposal, and to beware of pitfalls such as revenue cuts taken by platforms.
At the end of the day, though, perhaps the most important piece of advice comes from Savannah Palacio, a creator since 2018, with a cross-platform audience of 1.4 million: “Don’t undersell yourself.”
The most successful creators, after all, are those who know their strengths – and their worth.