#13 - Creator Economy Movement: June 10, 2021
How creators want to make money. Twitch's music problem. 1429 True Fans. YouTube's 4 R's.
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1. InfluencerMarketingHub conducted a survey of 2,000 creators of various sizes, revealing how creators make and want to make money. (InfluencerMarketingHub)
77% of creators said brand sponsorship are their highest revenue source, 3X the response rate of every other revenue source combined.
Ad revenue share was the runner up, chosen by only 5.4% of surveyed creators as their highest income source.
Tipping, a recent platform favorite, was the top revenue source for 3% of creators.
If surveyed creators could pick one way to measure success across TikTok, Facebook, YouTube, Twitter, Instagram, Twitch, and Blogs, 17% would look to engagement rate (unsurprising, as this is what brands look for). 10% of creators chose money, and a measly 2% would measure success against follower count.
The most interesting finding was the answer to “In an ideal world, what is your highest revenue source?” 0% of surveyed creators chose Subscriptions (below).
^ What’s wrong with this picture? Businesses highly prefer predictable, repeat revenue streams that help establish loyal customers. The market values recurring revenue businesses at a multiple of revenue 6-10X that of transactional businesses. So what is behind this discrepancy? Is this preference a knowledge gap between creators and traditional businesses? Is it tacit knowledge that this type of revenue won’t work for their specific business? I suspect it’s actually because of the short-term time scale that too many creators optimize for, but that’s a topic for another day.
2. Twitch is under heavy scrutiny from the music industry, and the long-term solution is nowhere in sight.
Twitch has punted working on a serious Content ID system for years, and it seems like it’s time to pay the piper.
The company’s emails to users indicate that they do not have as well established of a relationship with labels, publishers, and other rights holders in the ecosystem compared to companies such as Facebook and YouTube.
Twitch recommends creators to “unpublish all” VODs and delete all Clips to avoid detection. 👁️👄👁️
Music and video are inextricably tied. For Twitch to deliver on its promise as a platform for live streamers to make a living entertaining and educating fans, it needs to buckle down and starting untangling this knot to create an ecosystem that protects and rewards rights holders fairly.
Instagram will keep Likes, but lets users decide if they want to see or hide the engagement metric in app. (Instagram)
Instagram is exploring subscriptions and an NFT marketplace. Subscriptions for creators will likely entail perks such as exclusive content, similar to membership type products on other platforms. (TheInformation)
Instagram has launched “drops,” a new section under its Shopping tab for users to browse upcoming limited releases. At the same time, it’s testing ways to let short-form video creators make money via Bonus. (TechCrunch, SocialMediaToday)
Instagram’s Creator Week saw the announcement of new monetization features including affiliate commission, which is inline with Instagram’s efforts on Shopping. Zuckerberg alluded to a subscription offering where FB will take less than 30% of the revenue, positioning it favorably compared to product offerings on Twitch (50%) and YouTube (30%), and compared to mobile app stores (iOS and Android 30%). (Variety)
TikTok’s text-to-speech voice has been enormously popular in viral videos, serving as a low effort way to elevate entertainment value. But it looks like that gravy train has ended after the voice actor sued, claiming she never agreed to work with TikTok. TikTok has since adjusted the functionality, and users have noticed. (Verge)
Twitch launched market-based subscription pricing to better reflect local income and cost of living, starting in Mexico and Turkey. This led in-app purchase in Mexico and Turkey to increase by 56% and 70%, respectively. (Apptopia)
Pinterest will bring 10 creators on to its second round of creator fund. Selected creators will receive $25,000 in cash and ad credits to help them grow. (Pinterest)
YouTube published a post about its Creator in Residence (CiR) program, a 5 year old program that YouTube has not discussed publicly before. CiR brings together cohorts of creators over the course of a many-weeks long program, which includes meeting relevant product teams to share feedback and provide insights. (YouTube)
Twitter’s subscription service (Blue) launched in Australia and Canada on June 3, with a monthly cost of $4.49 AUD and $3.49 CAD, respectively. Subscribers can undo tweets, consumer long threads more seamlessly, and bookmark folders to organize tweets. (Twitter)
Google’s Area 120 (in house incubator) project Qaya is working on letting creators monetize through digital merchandize. (Protocol)
Creator Rising, a Los Angeles based start up, launches with intent to connect early-stage founders in the creator economy with investors, creators, and operator experts through its “Stimulus Program”. (CreatorRising)
Clubhouse’s Android app has ~3M downloads as it aims to resurrect the massive growth trajectory it saw in February. Based on AppAnnie’s daily download ranks, it’s unclear whether it’s working. (MoneyControl)
In a head-scratching move, Clubhouse has enabled “tipping” for all users, regardless of whether they produce live audio content on the platform. (AdWeek)
Andrew Chen (a16z) joined the board of Maven, a startup offering online courses taught by creators. The move is based on the belief that education as a category for creators is still being defined, and it has huge commercial promise. (TheInformation)
Linktree partnered up with Square on a $250,000 “Passion Fund” for creators and entrepreneurs who want to turn their passion into their career. (PRNewswire)
PickleJar, an app that lets fans tip music artists for shoutouts, special performances, and song requests, launched on May 28. Artists set the tip amounts. (GlobeNewsWire)
Poparazzi, a social app that lets users take pictures of their friends (i.e. no selfies), shot up to the #1 spot of Apple’s free apps at the end of may. The app amassed 500,000 pre-installs on the app store following its beta test. (Techspot)
Role reversal — Social media stars want to gain footing as traditional media celebrities… and vice versa. Sway House is getting a reality show. Meanwhile, Brie Larson became a YouTuber (check out her ACNH skills), and Shay Mitchell is making TikToks. (NewYorkTimes)
Bestie Vibes Only — This term signifying the positive feeling between good friends gained more popularity since a viral video of a woman saying “bestie vibes only” over and over again. The original audio from her video has been remixed to create over 70,000 new TikTok videos that showcase best friends, both humans and pets. (TikTok)
Versailles Run: A TikTok AR effect that has spurred more than nearly 900,000 video creations. The AR filter turns users into Queen Marie Antoinette running through a gallery, in a campaign to celebrate cultural expression. Of course, creators have twisted the original intent of this effect to memefy it. (TikTok)
Mirror.xyz, a crypto based publishing platform, reported raised from USV (Union Square Ventures) at a $100M valuation. Mirror raised $10M+ in Seed financing from investors including USV and a16z. (TheInformation)
Snap acquired WaveOptics for >$500M. Snap uses WaveOptics displays in its new Spectacles, which are given to a select bunch of AR effect creators. (Verge)
Turntable has returned from the grave. The social music service raised $7.5M from Andreessen Horowitz, seeking to challenge social audio once more. (Turntable)
Beacons, one of the newer link-in-bio company, raised a $6M Seed round led by Andreessen Horowitz. (TechCrunch)
Poparazzzi, the “take photos of friends, not yourself” app, raised a $20M in Series A funding from Benchmark at ~$135M valuation. The app debuted at the end of May at the top of the iOS free app ranking. (Forbes)
YouTube paid out $4B to music industry over past 12 months. Spotify announced earlier this year that it paid out $5B to the music industry in 2020. (Variety)
Articles of Interest
Apple is slowing down the creator economy. Apps such as Fanhouse are running into the iOS 30% platform fee for in-app purchases. If Apple has their way, 1000 True Fans just turned into 1429 True Fans. (TheVerge)(Stratechery)
YouTube’s bigger and more profitable than ever. In Q1 2021, YouTube’s ad revenue jumped 49% to $6B, beating the 34% growth of Google’s overall ad business. (Fortune)
As predicted, NFTs are seeing a pull back in majority of current use cases. My long term outlook remains positive as artists, creators, and tech entrepreneurs figure out a model that brings in more utility to consumers. (Protos)
To earn back Advertiser trust over the past 4 years after massive ad dollars were pulled in 2017, YouTubes has built upon its stack using the 4 R’s framework. (Fortune)
“removal” — finding and removing the most egregious content.
“reduce” — shrinking the audience of borderline videos by downgrading them with YouTube’s all-powerful algorithm.
“raise” — raising up trustworthy and authoritative sources, particularly on controversial topics (e.g. CDC issued revised guidance for wearing masks)
“reward”— i.e., promote the videos of creators who follow the rules, and enable good creators in the ecosystem to monetize.
“If YouTube were a stand-alone entity, that would make it the world’s fourth-largest seller of digital ads, after its parent company, Alphabet, Facebook, and Amazon.”
Twitch turns 10 this year, and the Creator Economy is in its debt. (Wired)
Khaby Lame, a former factory worker in Italy, has become the fastest-growing TikTok creator in the world. (NewYorkTimes)
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