Business of Creators 💬

Stay ahead of the curve in the creator economy...

Platforms like TikTok are growing tenfold, so why aren’t they paying creators properly?

Erin McGoff is a content creator who hit 900k views on an Instagram video and made $6. It seems that even if you have millions of followers or a dream-like engagement rate, making a sustainable income directly from platforms like Instagram and TikTok is not yet an accessible reality. Yet as these platforms grow at an insane rate, reaping huge sums from ads, it poses the question - why aren’t they paying creators properly? 

Whilst the main source of income for creators come from brand deals, sponsorships and subscription products, there is a lack of transparency on the platform side on compensation models, the unpredictability of algorithm changes or account suspensions. As the disparity between the massive profits earned by platforms versus compensation received by creators widen, it poses a sustainability problem for creators. According to Matt Koval, a creator’s career span typically lasts between five to seven years. That’s quite sobering given we only see the bright side of the creator world. 

With the absence of a clear career trajectory and potential sudden loss of income on most creator’s minds, some are considering unionizing to advocate for transparency and standardized deal rates, including Hannah Williams (founder of Salary Transparent Street) who likens the need for a union movement similar to what we experienced last year in the film and TV industries. And there is movement indeed, one example including a database called "Fuck You Pay Me (FYPM)", allowing creators to share information about brands and their payment practices. With a myriad of complexities emerging as the creator economy looks to be worth half a trillion dollars by 2027, it won’t be uncommon seeing the need for ethical compensation models to start dominating the conversation. 

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Industry news & events

🏈 TikTok has announced its fourth annual Super Bowl LVIII Tailgate event. Expect hours of live programming featuring a live musical performance from Gwen Stefani, NFL special guests and TikTok creators. 

🎲Creator Economy Live kicks off on January 16th and 17th at Las Vegas, with hundreds of brands coming together to learn what’s hot, what’s working, and how to deliver influencer ROI. 

🧑‍💻Microsoft launches new generative AI ad creation tool which will enable users to create new ads based on just a product URL or via conversational AI prompts, automatically aligning with each retailer’s style guide. 

📊Data.ai has released its 103-page ‘State of Mobile’ report, looking at how each app across every consumer category performed in 2023. 

Is YouTube Shorts - the money-maker for 2024?

Drumroll - yes, it looks like it is. 

According to data from CreatorIQ, marketers continued to invest heavily in creator-generated short-form videos across usual culprits like TikTok, Instagram and YouTube in 2023 and the rewards were lucrative. $62.3 billion in value was provided to brands, just from short videos, a 14% increase from 2022. 

And YouTube comes on top, with a 700% increase in spending on its Shorts platform. With YouTube expected to be the dominant player in the channel-race for 2024, it’s no wonder brands are starting to pay more attention to the wide choice of short videos and creators on the platform, diversifying their investment across categories like food, technology, sports, beauty and fashion. However, with TikTok’s push for creators to start developing content longer than a minute, keep your eyes peeled on how this dynamic might shift in the market…

Platform round-up

Leverage the latest updates and features across digital platforms to help you get ahead of the game…

💘Roses are red, violets are blue, TikTok has created a valentines marketing guide, just for you 

✂️YouTube’s new Shorts editing UI, accessible via the ‘Remix’ option on your clips, offers some smart innovations with a range of editing tools to create standout Shorts clips, without having to re-shoot or undergo major editing. 

🧑‍⚖️Meta is planning to remove some of its detailed ad targeting options from March 18th, likely in response to discourse on the ethics regarding targeting sensitive factors such as health, race and/or ethnicity. We don’t know what options will be removed, but it may impact your process and how you get your Facebook and IG ads to the right people. 

🛑TikTok has removed the capacity to search for specific hashtags within its Creative Center tools. The move comes amidst concerns reported by The New York Times that the data was being used to highlight potential platform censorship and ByteDance (the Chinese owners of the brand) are influencing and moderating the posts that appear on it. It will limit your capability to take some insight into certain tags.