Inequality is one of the biggest problems facing the creator economy.
It isn’t an issue that tech platforms are going to fix. If creators and artists are going to establish a solid foundation where more individuals can make a living, they will need to take the issue into their own hands. Creators should work directly with their communities to drive independent forms of monetization that insulate them from the king-making platforms.
Stark Inequality in the Creator Economy
One of the most significant revelations from the recent Twitch hack is that the top one percent of paid streamers are earning more than half of the money paid out by the platform this year. This isn’t a Twitch problem or even a gaming problem. We’ve seen it in music, too. It’s a creator economy problem.
It’s hard to earn a living solely from platforms like Spotify and YouTube. An artist on Spotify would need to get about 300,000 streams per month to earn the federal minimum wage. But similar benchmarks exist on other platforms that artists share with creators.
On ad-based platforms, which make up most of the creator economy today, inequality is even starker. At the top, incomes are staggering; each of the top-10 earning YouTube creators made more than $15 million in 2020. Meanwhile, according to SignalFire, 97.5 percent of YouTubers’ income falls below the U.S. poverty line.
The rise of the direct-to-fan monetization model empowered creators to move from the big tech-owned platforms to Patreon and Substack, where creators retain an estimated 90 percent of the revenue generated from subscriptions. But even these platforms have only produced a handful of millionaires, while most creators fail to meet the minimum wage.
Some of the best music, writing or content will always rise to the top, and that’s a great thing for those artists and creators. But should they have to have hundreds of thousands of fans to make a living? I’m not the first person to address this issue. In Havard Business Review, Li Jin brilliantly proposed 10 solutions for bolstering the middle class of the creator economy.
Can devs help artists make a living?
One solution I would add to Li Jin’s list is connecting artists and creators directly with developers. Big tech platforms typically only build features when it benefits them and their shareholders. Unfortunately, that means most of the technical talent that could be building tools for creators is focused on platforms that reap most of the financial gain from creators’ content.
However, there’s a significant movement happening quietly where artists and creators are starting to tap into the tech-savviness of their communities to build new kinds of tools that allow them to create unique fan experiences and monetize in new ways. Working directly with developers has huge implications for artists and creators that have been relying on big tech platforms for the past decade-plus. They’re increasingly wanting to monetize on their own terms, instead of relying on platforms that take most or all of the revenue that creators are generating by way of advertisers.
NFTs are an interesting area where we’ve seen this happening; they have been a financial boon for artists and creators from Kings of Leon to Grimes to Paris Hilton since the technology exploded in popularity in early 2021. More importantly, it’s an exciting new way for creators and artists to monetize directly instead of relying on ad-based platforms. But many are frustrated that the technology’s success has mostly been driven by speculation and not from genuine fan experiences.
This is where I believe developers can come in. Twitch was actually one of the places where creators first used developers to build new ways to interact with their fans. Streamers like Swiftor and CohhCarnage have worked with devs to build sophisticated monetization and interaction systems, going beyond the base feature set of Twitch.
Today, this trend is becoming more prevalent across different verticals. Developers can help creators build utility into their NFTs and digital economies to offer their fans unique experiences. In the piece for Havard Business Review, Li Jin argues that empowering creators to engage with and capitalize on their superfans is a key to unlocking mobility to the middle class of creators. This is a perfect example of that idea in practice.
If creators get more access to developers, they will be able to build the internet that they and their fans want, instead of the one that mega-platforms give them.
What’s in it for the developers?
This all sounds great for artists and creators, but what’s the incentive for developers to work with artists and creators? For one, they can go out on their own and build products and experiences that they’re interested in. Some of these developers are loyal fans of the artists and creators they work with and do it as a passion project. For many developers, the idea of an internet that is community-owned and built is more attractive than one built by big tech. They can also build better products. Working directly with the creators that will use their tech means that developers are building tools directly with end users — a situation that occurs less frequently than you would think.
It’s become more common for companies to make it easier for third-party developers to build apps and tools around their platforms, and also to hire staff dedicated to supporting their developer ecosystem. Some companies are even creating robust bounty and grant programs to fuel their work.
An open internet means a fairer creator economy.
I believe we’re just at the beginning phase of the next era of the creator economy. A more open internet means a fairer creator economy will emerge. Once there’s a stronger creator and artist middle class, it will fuel more demand for developers to create personalized experiences.