The Creator Economy Is Far From Overblown

I came across Alex Kantrowitz’s The Creator Economy Was Way Overblown in my weekend reading. It’s well-written, but completely wrong. Here’s an excerpt of the core arguments:

After years of hype, the Creator Economy is slamming into reality. Influencer programs are shuttering. Investment is drying up. And worsening economic conditions are threatening to crush creators and the tech infrastructure behind them.

While today’s economic downturn is causing broad pain, the creator economy is suffering in particular because its middle class hasn’t yet emerged. Online content creation is still mostly viable for the very top echelon of online creators only. And when mid-sized creators can’t make it, the VC-funded platforms meant to serve them can’t scale. So it’ll likely be a while before “link-in-my-bio” startups raise at $1.3 billion valuations again.

‘People only have time to consume so much. So you have to be the best, or in the top few, in any given space,” said Austin Rief, chief executive officer at Morning Brew. “It’s really tough to be the 37th best finance creator.'”

Let’s examine that smart-sounding quote with data, shall we?

This is a question SparkToro is purpose-built to answer: who is the 37th most-followed-and-engaged-with creator among people who frequently talk about “finance” on their public social media?

We’ve got data about 326,306 individuals with that behavior. Here are rows 35-39 (ordered by the percent of the finance audience that’s followed or engaged-with their content in the last ~4 months):

As best I can tell, all of those creators, and dozens to hundreds below them, do pretty darn well as creators of content, and beneficiaries of the marketing that comes from their content distribution and subscriptions.

In fact, we can go down literally another hundred rows and see very successful creators in this niche.

Maybe you think it’s unfair to call a website like Financial Planning a “creator.” Or you take issue with any legacy media (like Bloomberg) being included in the “creator economy.” I find these arbitrary markers of distinction pointless, but even if you exclude every potentially non-conforming-creator on the list, at #37 you’d find Sam the Financial Samurai, who appears to be a classic embodiment of creator-dom building a successful business with his website and social channels.

Let me address Kantrowitz’s other arguments piece by piece:

  • Influencer programs shuttering” is not evidence of weakness in the creator economy. It could indicate overinvestment in products and services that cater to them, or simply poor execution on product ideas meant to serve them.
  • Also, “influencers” are far from the only kind of creators. Conflating these two is folly. The entire concept of the creator economy is that it encompasses not only Instagram & TikTok-style influencers, but folks who run industry publications, bloggers, podcasters, corporate content creators, niche media, online magazines, email newsletters (like Kantrowitz’s own Substack) and everything in between.
  • Kantrowitz says: “as the advertising market contracts amid an economic slowdown, many in the already-limited creator middle class will struggle to make it through.” That sounds smart and obvious. But, it’s a complete fabrication. The advertising market IS NOT contracting in 2023. It’s still growing, just at a slower rate than in 2021-22 (but a faster rate than 2020).
  • The majority of hard, numerical evidence presented is quantities of funding to creator-economy-focused startups. But, to determine if the slowdown is unique to that field, we’d need to examine how ALL venture funding is shrinking and see if creator-startups are uniquely affected. No surprise, the entire field is pulling back, at a rate that closely matches the ~60% decline TechCrunch noted for the creator-economy startups.
  • The “hype” of a creator economy worth $100B+ USD in the next decade is, according to Kantrowitz, a vanishing myth, yet in 2021, YouTube ALONE said they’d paid out more than $30B to creators the prior three years. Last year, YouTube grew another 30%. It seems possible that by the end of the decade, this one platform might be paying out 50-75% of the “number that now seems fanciful.”
  • In fact, the most robust, aggregate estimate of payouts I came across covered YouTube, Instagram, TikTok, Patreon, Twitch, and OnlyFans and came out to $104.2 Billion in 2021. It seems probable we’ve already broken past Kantrowitz’s “fanciful” $100B mark.
  • Finally, and most misleading of all: “worsening economic conditions are threatening to crush creators and the tech infrastructure behind them.” Which essential-to-creators tech infrastructure is on the chopping block? Stripe? YouTube? WordPress? Podcasting? Patreon? A best-faith interpretation would be that Kantrowitz is talking about the potentially-shuttering startups who raised money to build things for creators but couldn’t make it. Yet, the infrastructure in creator-world is already so robust and well-served by profitable, secure, long-lasting providers that this strikes me as nothing but the worst kind of data-bereft fear mongering.

I can find no compelling evidence to support the claim that the creator economy is somehow in jeopardy or decline. Best I can tell, it’s an incredibly healthy, vibrant sector with tremendous potential for even the 370th most-followed creators in a big field (like finance) and certainly for the 37th most-followed creators in smaller ones. Is there more competition? Yes. Is it harder to stand out than years past? Absolutely. But is the field at risk of declining? Are fewer people consuming content online? Is the value of an online audience in most sectors shrinking? No.

Admittedly, it’s possible that creator-economy world’s rate of growth is slowing at a rate commensurate with the broader global economy. But to prove that it’s underperforming that benchmark or that it was overhyped compared to other sectors, you’d have to find numbers that contradict every trustworthy source I could uncover.

And, I’m not alone. Over on Mastodon, Mariya Delano did some digging of her own into the “creator economy is overblown” assessment:

This really puts the nail in the coffin:

Don’t be fooled into thinking that because venture investment is drying up in a sector, it’s dead or dying. And don’t buy into the myth that “creator” has some narrow definition that restricts what you can do and how you can make a living from it.