- Goldman Sachs released a report in April charting the creator economy.
- The company estimates that the creator economy is a $250 billion industry and could reach $480 billion by 2027.
- Here are four other key takeaways.
Since the creator economy exploded amid the pandemic, the space has only continued to grow.
Brands have increased their spending on influencer marketing, which Insider Intelligence estimates will exceed $6 billion in 2023. And creators are breaking down barriers by entering mainstream entertainment, launching their own startups and becoming full-fledged media companies thanks to their personal brands. have built online.
Take Jimmy Donaldson, aka MrBeast — with nearly 150 million subscribers on his main YouTube channel alone, he was recognized as one of Time’s 100 Most Influential People of 2023. Donaldson also runs a media company and has founded two food and beverage brands, among other ventures.
While Donaldson is just the tip of the iceberg, making an income as a creative is getting easier and easier – in a recent survey by influencer marketing firm IZEA, 61% of respondents aged 18-29 said they own their would quit their job to become a full-time influencer.
As the industry continues to take off, Goldman Sachs released a report in April that maps creator economies, estimates their size and predicts key platform and engagement trends.
Here are five key takeaways:
The creator economy could be worth an estimated $250 billion
Goldman Sachs estimates that the creator economy represents a $250 billion total addressable market that could reach about $480 billion by 2027.
Much of this growth will be driven by continued investment in influencer marketing and the rise of ad revenue sharing models, particularly as short video promotions increase.
Instagram reels and YouTube shorts could continue to grow
The rise in short-form content will take Instagram roles from 4% of the company’s ad revenue in 2022 to 23% in 2027. That would be an estimated $20.5 billion in ad revenue, up from $1.8 billion in 2022.
It also predicts that YouTube short films will grow from 2.5% in 2023 to 26% of YouTube’s total ad revenue in 2027 ($750 million to $11.6 billion).
The report didn’t analyze TikTok, but said it expects the bulk of the growth in ad-supported creator payouts by platforms to come from short-form videos over the next few years.
Overall, Goldman Sachs expects major platforms like Instagram and YouTube to continue attracting creators, in addition to other tech companies that have been courting influencers like Amazon, Spotify, and Roblox.
These platforms offer several advantages, including scalability, effective algorithms, a variety of monetization options, and strong analytics – which the report says enable them to continue to grow their user base.
Almost half of YouTubers are Millennials, followed by Gen Xers
Data from a 2022 Adobe study shows that the majority of developers are millennials. This applies to nine countries. In the US, Millennials make up 45% of creative people, according to the report.
Millennials are followed by the generation above them, Gen Xers, who make up 26% of YouTubers in the US.
Only 15% of creators are Gen Z.
Adobe’s report describes creators as adults over the age of 18 who “participate in creative activities,” from photography to NFT making and more — and who post, share, or promote their work from those activities online, or who “are engaged in creating social content.”
Investments in creator economy startups are declining
Not all aspects of the creator economy have grown unhindered.
Venture capital funding in author companies has declined steadily from its peak of about $7 billion in 2021 to $4.3 billion in 2022, according to data pulled from PitchBook by Goldman Sachs.
The data reflects the total capital raised by companies categorized as content creator, creator platform, and creator economy.
Part of this could be due to the macroeconomic environment and rising interest rates, according to the report.
Most influencers don’t make money from the creator funds set up by platforms
Creator funds — fixed sums of money that social media platforms make available to pay users for their top-performing content — have long been a problem for creators, some of whom have expressed frustration at low payouts.
The TikTok fund has angered some developers so much that they have left it over concerns for their sanity, Insider previously reported.
Data from a 2022 study by influencer marketing agency Mavrck and eMarketer (now part of Insider Intelligence) showed that about 73% of creators reported no income from creator funds at all. At the other end of the spectrum, about 3% of creators reported making more than $5,000 through these means.
Several platforms have recently scaled back their fund initiatives. YouTube, which launched a fund in 2021 to reward creators for posting short films, replaced it with an advertising revenue share program in early 2023. Meta also put its loyalty programs on Instagram and Facebook on pause in March. And TikTok is “reinventing” its funds program, The Information reported.
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