Current challenges

The road to success as a creator is all but guaranteed. Most creators face two major challenges:

1. Difficulty to monetize

It takes an average of 6 months for a creator to earn their first dollar, and only about 4% of creators generate more than $100,000 a year. Additionally, revenue distribution is severely imbalanced. Across platforms (from Patreon to Roblox or Spotify), the top 1% of creators capture close to 90% of the traffic and the revenue, what some have called a lack of creator middle class. Part of the reason is the lack of diversity of business models offered to creators. Brand deals represent almost 70% of the revenue, logically favoring top creators, while smaller creators lack tools to monetize their core audience of ‘true fans’. Not only is it hard for creators to turn their social capital into financial capital, but they also have no options for financing, nor do they create significant opportunities for others to make money.

2. Dependency on platforms

Creators use platforms to create, distribute, or monetize their content, who initially need the creators to grow but eventually extract most of the value from them and their audience to maximize profits. Specifically, Facebook (with their suite of apps), Google (with YouTube), Apple (with the AppStore) and Amazon (with their marketplace), have together grown to about 8 trillion dollars in value (half the GDP of China) on the back of creators using their services. Creators are merely ‘renting’ their social graphs to these platforms, who monetize them for themselves. But the network effects are so strong that switching costs are too high for most creators to even consider starting building their audience elsewhere, trapping creators on these platforms with no choice but to adapt to eventual changes in policies or algorithms.