The promise of Creator Economy: Apna Time Aayega?
It's time to make platforms for creators and not just consumers.
The 2019 Bollywood film Gully Boy stars Ranveer Singh as Murad. Murad is a creator. He is from the suburbs of Mumbai and conveys social issues that plagued his life through intricate lyrics as a rapper. He also works as a chauffeur to make ends meet. Just like him, a long tail of creators is out there trying hard to put out genuine content and not be sellouts.
In 2004, Chris Anderson, editor of WIRED, wrote about the ‘Long Tail’ theory.
To give an example from the music industry, a few top artists make it big and there is a struggling long tail of creators who make great music but do not get sufficient recognition and don’t earn enough to be financially independent.
Limitations in the outside world like restricted audience size / scarce shelf-space were gone with the arrival of the internet. According to him, this would empower niche products and creators to flourish.
Before we talk about the creator in all of us, let’s understand how the Creator Economy or Passion Economy took birth.
Is the Creator Economy here?
Let me first take you through how economies have evolved.
In the early 1900s, the Industrial Economy was taking shape. Mitigating scarcity was the problem for this economy. Around the 1940s, the Allies won World War 2 because they could produce more artillery than the other side could blow up.
Economies became so efficient at production that they were producing more than they could sell. The success of the industrial economy was its own death. It mitigated scarcity through overabundance.
But, overabundance led to an easier path to make people desire for more. That’s how marketing, advertising and sales became a huge thing and the Consumer Economy arrived. As Tyler Durden from Fight Club says:
‘Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don't need, and the things you own, end up owning you.’
In the pandemic, our lives slowed down. That’s when people got the time to bask in the glory of creation like making the perfect Dalgona coffee or realizing that one can cook delicious Palak Paneer at home.
The creator in each one of us seems to be arriving in bits and pieces!
Will the death of the Consumer Economy make way for the Creator Economy?
The fate of the Consumer Economy is yet to be realized. I don’t know how it will phase out completely and make way for the creators. However, the fulfilment of our desires through consumerism doesn’t give us the feeling that we get from creation. For example, when traditional media gatekeepers departed, there has been a deluge of independent writers creating quality content and the emergence of platforms that cater to this audience. These dynamics are raising hopes for the struggling long tail of creators.
Widespread digital transformation has the potential to accelerate the onset of the Creator Economy. An omnichannel platform that will enable the long tail of creators to flourish and make them experience upward social mobility will usher in the arrival of the Creator Economy.
The platform will help ordinary people achieve huge success. We are already seeing a lot of platforms that are keeping the creators at the centre. Twitch, Patreon, Kickstarter, Instagram, TikTok. Substack is one of them. Also, heavyweights like YouTube, Twitter are making changes to retain creators.
YouTube has launched Channel Memberships providing Creator Perks through a ‘Join’ option apart from Subscribe.
You pay a monthly subscription fee to get closer to your favourite creator (1:1 in-person meetings, exclusive content, etc.) and support them. All you need is 1,000 subscribers to enable Channel Membership. This should cause small cohorts of creators to flourish. Being identified as a super-fan is a social status many seek (remember the Vivo Fan Box during IPL?). Personalization in stickers, badges and emojis is becoming huge. Twitch, Discord and now YouTube is also bringing them in.
Similar to YouTube, Twitter is launching ‘Super Follow’ to allow users to monetize their tweets. They are even launching Communities and acquired Revue, an editorial newsletter tool, to attract writers.
Through these changes, platforms are reorienting themselves towards the Creator Economy. However, there’s a problem. All platforms aimed at helping the long tail flourish are not successful in doing so.
Wealth concentration is only amongst the top creators. Top 1-2% of creators get 90% of the earnings from the platforms1. This is a very big barrier. The Creator Economy Needs a Middle Class is an amazing deep dive by Li Jin.
What does success look like in the Creator Economy?
The Creator Economy has three stakeholders: the platform, the creator, the community. It will arrive when all three stakeholders are doing well.
Risk is high for emerging platforms as more wealth concentration at the top would mean incumbents or even would-be competitors can steal your top creators. Communities are loyal to creators and the creator for them cannot be substituted. Platforms could see high levels of community attrition leading to failure.
Is it really possible to be successful in the Creator Economy? There are some inherent barriers:
There is an in-built inequality that can arise in this ecosystem. The supply of creators is heterogeneous in this market and non-substitutable. For example, the BTS army will not settle with a substitute artist.
Ad-based models reward creators who achieve scale based on the number of likes/followers. This is not effective as real fan engagement is not rewarded. This brings in peanuts for long-tail creators.
Let’s say long-tail creators have a platform but how will they get visibility over the top creators? Based on our own or the behaviour of our network, recommendation algorithms are built. They tend to push us into our own bubbles or echo chambers. It’s like opening Netflix to realize there’s nothing new to watch. Randomness is what we need on our feeds to expand our worldview.
Lastly, the nature of various content categories is so fragmented. It is very tough to objectively gauge the quality of content categories. Some have more definitive universal standards over others. And too much variety leads to decision fatigue.
Has anybody succeeded in the Indian Creator Economy?
Teachers as creators, students as the community and Unacademy as the platform is one really successful example of the Creator Economy.
Another reason Unacademy is successful that it easily overcomes the 4th barrier. It is easy to objectively identify the ‘best exam-prep tutor platform’ vs. ‘best cuisine of food’. Exam Prep tutor can be judged based on the scores students get that are trained from that tutor. The best cuisine of food is subjective to our sophisticated palates.
There are families where the very first smartphone is bought so that the children in the family can crack entrance exams using Unacademy. This will enable kids and thereby these families to go up the social status ladder.
This is the part of India where people like Murad come from. Murad met a fellow rapper who introduced him to the burgeoning hip-hop community. This community helped him gain confidence, write lyrics in sync with bars and beats, do studio recordings, put out tracks on YouTube and find his identity as ‘Gully Boy’.
There are artist management companies out there doing good work for homegrown talent. However, there are no platforms in India that would help discover, fund and nurture artists like Murad and turn him into ‘Gully Boy’. This utopian creator arc from Murad to ‘Gully Boy’ is the promise of the Creator Economy.
Apna Time Aayega?
Quoting lyrics of the song ‘Apna Time Aayega’ from Gully Boy:
Zinda mera khwaab
Ab kaise tu dafnayegaMy dreams are alive and kicking,
How will you bury them into nothing?
A paradigm shift has to happen first. Creators who bring in more ad spend on platforms or brands are rewarded today. There has to be a shift to reward the creators based on real fan engagement. Platforms should enable creators to make better content. The ecosystem will differ drastically from vertical to vertical, so a blanket change will take years to come.
But I am positive!
I think we are at ground zero of this metamorphosis.
https://hbr.org/2020/12/the-creator-economy-needs-a-middle-class
This post was written by Rahul Yadav. To give feedback or comments, please connect with him on LinkedIn or follow him on Twitter.
Disclaimer: All views expressed are personal and do not reflect the view of any company. All the information copyright is with Rahul Yadav and credited authors. Protected under creative commons.
Well explained ! Superb.
Very interesting topic. Brilliantly written! 👏