Are We Entering a Creator Economy Winter?
With less funding for startups and an increase in media layoffs, we need to question what that means for the survival of the creator economy.
Photo Source: Sprout Social
Is it the start of a creator economy winter?
With less funding for startups and an increase in media layoffs, we need to question what that means for the survival of the creator economy.
When analyzing the creator economy, we need to start by defining a creator. According to Every, a creator is a small business and a media company. And don’t be fooled by the title, now is probably the best time to be a creator.
Social media platforms, such as Intagram, Tik Tok, Twitter, Pinterest and YouTube, have been changing their algorithms and creator funds in a competition to become reliant options for creators to make an income. Additionally, if creators learn how to utilize the new advancements in artificial intelligence to their advantage, they can produce content more efficiently than ever before.
However, the profession has become very saturated with about 200 million people considering themselves creators. So when discussing a creator economy winter, you need to remember that not all creators are working full time or earning a sustainable income from content creation alone.
Since 2021, creators have taken a hit in terms of funding and layoffs. Funding to creator economy startups dropped 60 percent, or $700 million, between Q2 2021 and Q2 2022, according to VC Cafe.
As funding sources drop, startups have decided to cut costs to stay afloat, which has led to an increase in layoffs. According to Every, “Patreon laid off 17% of staff, Linktree first sacked 17% of staff, then a few months later another 27%, Cameo has laid off 160 (probably 33%+ of staff), Substack laid off 14%.”
So, how can creators survive the creator economy winter?
First, creators need to evaluate how they are earning a revenue share. It’s difficult to make a strong earning by relying on creator funds, when most of the revenue is going toward the platforms and not the creator. Therefore, creators need to find other sources of revenue, such as brand deals, to grow their income.
Second, creators need to focus on marketing. While creators want to create content, whether that’s music, photography or videos, it’s still important to grow their audience. This not only increases their support, but incentivizes larger brands and companies to partner with them.
Third, creators should stick together. Collaborating with each other can help gain recognition and boost followings for all creators involved.
Last but not least, creators need to continue to adapt. As new platforms take over and old platforms change, creators need to adjust their content to continue growing. They also need to adapt to new technologies, such as AI, and even consider opening their own brand or product lines.
While many are scared the creator economy is headed on a downward spiral, the team at Don’t Count Us Out Yet has hope for its future. Just because funding has decreased and layoffs have increased, it doesn’t mean the creator economy is failing. In fact, the market size for the creator economy is still $100 billion. What do you think this means for the future of the creator economy? Let us know in the comments!
Best,
Ariana for the Don’t Count Us Out Yet Team