The creator economy apparently leaves a large part of the creators out in the rain.
In an opinion piece published by the Financial Times on Saturday (April 22), Leo Lewis argues that there is a “staggering concentration of revenue” among a small number of Gen Z creators and a “yawning gap where a fairly decent ‘middle class ‘Existing income could ideally be.’
He points to figures from Goldman Sachs that estimate a global creator population of 50 million, 96% of whom are “amateurs” earning relatively little, while the remaining “professionals” make more than $100,000 a year.
Citi, meanwhile, says that 90% of Substack’s revenue comes from fewer than 10% of the authors, a ratio that’s also true for developers on Twitch and YouTube.
While this is good news for platformers – as the idea of superstar creators raking in huge revenues continues to attract new wannabe creators – it’s a different story for the creators themselves, Lewis writes.
“While alternative revenue models could transform the creator economy again in the years to come, the game isn’t nearly as democratic as it seems.”
This comes at a time when more than a third of Gen Z Americans work in some type of side hustle, according to research by PYMNTS and LendingClub in New Reality Check: The Paycheck-to-Paycheck Report.
Those jobs include informal duties and gig work, as well as selling craft and used products, the report says. In many cases, these alternative sources of income are tapped into via online marketplaces or via mobile apps.
As noted here last week, it might be this segment of Gen Z that merchants, banks, and others looking to do business with this age cohort might target first.
“If financial stability is this generation’s North Star, the cohort will likely seek financial advice from banks or FinTechs to best manage their money,” PYMNTS wrote. “This type of advice, as well as associated innovative tools, have proven to be successful in maintaining customer loyalty.”
A recent example of FinTechs targeting this consumer need came from Klarna, which worked with budgeting app Buddy, which catered to the Gen Z demographic. The offering allows users to check real-time account balances, track expenses, and set up payment reminders all in one platform.
“Overall, Generation Z is characterized by an openness to digital innovations and a high acceptance of those who find them useful to integrate into their daily lives, such as e.g. B. health-related wearables,” wrote PYMNTS.
“The FinTech or other company that can successfully address both Gen Z’s openness to digital innovation and drive for success can win customers – for the long run.”
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