Half a trillion dollars. That's how big the creator economy, currently valued at $250 billion, is expected to grow over the next four years, according to Goldman Sachs.
As people have made a living creating content for online audiences for nearly two decades, the once-fledgling industry is maturing. Brands are becoming more strategic about influencer marketing, a thriving ecosystem has emerged to serve creators and their needs, and social platforms are increasingly encouraging consumers to spend while they scroll.
What does this mean for influencers and their audiences? The Times asked those who have worked in the creator economy for decades to share their thoughts on what the new year will bring. We are still at the beginning, they said, but in 2024 the industry will develop significantly.
It’s getting harder to build a “real” business.
Most creators start out as one-man bands. You independently brainstorm, film, edit and publish content. Day by day they increase their fan base and eventually start making money. But what then?
“There are two options: you either hire an external manager or agent, or you hire a COO or business partner internally,” says Jon Youshaei, founder and founder of Youshaei Studios. “And I see more and more often that creative people hire a right hand internally.”
A lot of it has to do with competition. Although the barrier to entry has never been lower, building a “real business” in the creator economy is becoming increasingly difficult, Youshaei said.
Blake Michael, chief strategy officer at Fourteen Media Group, a consulting firm for startups in the creator economy, said this requires bringing in outsiders to help with growth strategies.
“Niche industries become saturated so quickly, and that means you have to put more effort into your content to stand out,” said Michael.
Companies will be more selective about who they work with…
In the early days of influencer marketing, YouTubers quickly attracted money and attention from companies eager to gain a foothold on social media. This year, companies won't be as willing to throw money at every influencer that comes their way.
“I just think they’re getting a lot smarter,” said Joe Gagliese, co-founder of Viral Nation, one of the world’s first influencer marketing agencies. “They want to understand: Does this person really fit my brand? What views and perspectives do they have on things that may not fit my brand?”
As brands become more disciplined in their efforts in 2024, they will increasingly want to see measurable results, Gagliese said.
Two influencers that look the same on paper could have completely different results. Companies are learning to look at metrics like community engagement relative to follower count, and they're questioning the nature of relationships creators have with their audiences.
“There are creators that people look to for their opinion and trust, and then there are creators that people like to be entertained by,” Gagliese said, “and those two types of engagement are very different when it comes to that “It’s about being able to help a brand.” ”
…However, this could mean more opportunities for “micro-influencers.”
Counterintuitively, the push to formalize influencer marketing channels will mean more opportunities for creators with smaller followings.
Traditionally, when companies want to work with influencers, several “inefficiencies” have slowed the process, said Zach Ferraro, head of strategic partnerships at Fourthwall, a platform that helps creators sell products and launch memberships.
First, brands had to search for the right creator — and often they didn't know exactly what they were looking for or what they could realistically expect in terms of results, Ferraro said. You had to discuss prices, which can vary widely, with a manager and provide services such as a certain number of Instagram posts or videos.
To make the associated friction and costs worth it, brands would only sign larger deals.
But as companies have become more sophisticated, platforms have developed to connect creators with brands, and the process has become more transparent. The company F*** You Pay Me, for example, allows creators to anonymously rate brands they have worked with and share how much they paid for them.
“Smaller, medium-sized micro-influencers will have more opportunities as the friction fades,” Ferraro said.
Viral Nation's Gagliese agrees.
“I think creators who have really built core audiences and communities and have the ability to convert and create those business outcomes are likely to be paid more,” he said. These are the influencers who may not have millions of followers, but have a smaller, engaged audience.
Another option is for brands to hire smaller developers for in-house content, Ferraro said. “Middle class” creatives who may not be doing as well financially as they would like could find ways to offer their expertise to brands looking to grow their audience.
Consumers will also pay you for your content.
With the rise of in-app “tipping” features on social platforms, creators have another way to make money: their fans can pay them directly, without having to use a third-party platform like Patreon or Buy Me A Coffee.
On TikTok, users can purchase coins to spend on virtual gifts for livestreamers on the platform, which can then be converted into earnings. The most popular form of spending is a $19.99 coin bundle, which accounts for a quarter of the app's in-app purchase revenue (TikTok takes 50% of the payout).
Lexi Sydow, head of insights at data.ai, said this is a compelling trend because it involves one-off microtransactions made at a specific moment for specific developers that bring joy to consumers.
“There’s not necessarily a subscription associated with it,” Sydow said. “You say 'kudos.' I like this. I want more of it.' And I think that's very important for this area because I really think we're in the early stages of growth.”
According to data.ai, in 2023, TikTok became the first non-game app to generate $10 billion in consumer spending. This bodes well for overall social media spending, which is expected to continue to rise.
Other platforms like Instagram and YouTube have also jumped on the bandwagon and introduced tipping functions.
Authenticity will prevail…
Eric Wei, co-founder of Karat, a startup that helps creatives with their finances and credit, describes the current era of social media content as “sensational” — and predicts a trend toward authenticity in 2024.
Just check out MrBeast's most subscribed YouTube channel, whose most recent videos include “I Rescued 100 Abandoned Dogs!” and “$1 vs. $100,000,000 car!”
Although MrBeast will continue to be popular, Wei predicts a move among YouTubers toward more unedited content. This includes fitness YouTuber Sam Sulek, who has 2.75 million subscribers.
“Everyone’s focused on Sam, why? The guy doesn’t edit,” Wei said. “It's just that he works out in the gym for over an hour.”
Youshaei, who also has a YouTube channel, said he sees the rise of this type of content counteracting the “over-edited” videos that have taken over YouTube in recent years.
…But the rise of fake influencers is coming.
Lil Miquela, who describes herself as a “19-year-old robot living in LA,” is one of the first virtual influencers. She charges up to hundreds of thousands of dollars for a deal and has worked with brands including Burberry, Prada and Givenchy, the Financial Times recently reported.
She posts photos of herself vacationing in Europe, coloring her hair at the salon, and eating at taquerias. Does it matter that she's not real? She has 2.6 million followers.
Human influencers may soon have to worry about competition from such AI-generated avatars.
Digital avatars that amass followers are not a new idea. Consider Japanese vocaloid Hatsune Miku and K/DA, a virtual K-pop girl group featuring characters from League of Legends.
And Wei points to Iron Mouse, one of the most subscribed female YouTubers on Twitch, who uses a virtual avatar and is known as VTuber.
“It’s already a billion-dollar industry,” he said.
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