Sunday, February 25, 2018

Online Creators and Cash: Some numbers from the Creative Economy

It’s a time of unprecedented choice. For everything from types of yogurt to entertainment. And as far as the latter goes this wasn’t always the case. In fact, the inverse was. There were only so many channels on TV, so many theaters in a city, so many slots on a radio station playlist. In other words, limitations were the defining characteristic of the marketplace.

Now nobody is keeping your writing, your music, your videos, your podcasts, or your handcrafted designs out of the purview of a global audience. The problem used to be getting a green light so you could get your work on the air, in a store, or otherwise in front of people. That's now the easy part, with the hard part being getting anyone to know or care that your work is available on Etsy, Soundcloud, Vimeo, YouTube, Patreon, and the like.

So what does this climate of ease of upload and/or availability of content or goods mean for creators? It's now been a decade or more since most of the ‘super platforms’ for content and commerce came onto the scene. In the early days people spoke of a radical inclusivity and democratization of creative processes and markets made possible by digital connectivity and networks. More recently there has been work done on what's being termed the 'degradation' of cultural creators and their creations, suggesting that despite the availability of inexpensive tools and low cost or free platforms, the inequalities and hierarchies of the corporate world are being reproduced online.

It is against this background that a study described as "the first rigorous quantitative analysis of America's new creative economy" has been conducted, estimating the income earned by creators across activities such as blogging, photography, music, self-published books, and handmade objects, with a focus on independent vs. celebrities generating revenue online, e.g. people with last names like Jenner or Kardashian.

Where the income earned by creators comes from:
  • Revenue share of advertising
  • Subscriptions
  • Affiliate marketing (commissions for referrals)
  • Sales of products made by the creators (e.g. on Amazon, Etsy, eBay)

Also note the following regarding the study: Income from activities such as influencer marketing, in which the ‘star’ from YouTube, Instagram, etc. paid to promote other products and/or services, are not included and revenue numbers for sellers on eBay are for self-made/handmade items only.

The top line numbers are as follows:


I ran the numbers to come up with averages, as opposed to aggregate figures. Even though averages can be misleading, because just one outlying high earner can disproportionately skew the average higher. Think of being in a room full of people and calculating the average salary of people in that room. Then think of that room if a few CEOs, let alone Warren Buffett, is standing in it.  So yes, averages aren't ideal, because they don't tell us how many people are making, e.g. more than a living wage, but I’m working with what I have, and here are those averages, and note that they’re for full year 2016.

Click to enlarge

Based on this cursory analysis it looks like you shouldn't expect to make much money anywhere except possibly on Twitch these days. And for those who may not be aware Twitch is a live streaming platform, acquired by Amazon in late 2015 for close to $1 billion dollars, which is dominated by live game play and commentary, but also has some oddities like streams of a guy Ubering drunk college kids around

Not included in the study was Patreon, a donate-what-you-want subscription service for creators across a wide range of products and services. While there are a lot of people making a little money on Patreon, and a little is better than nothing, it turns out only about 2% of active creators on the platform are making what could be considered any sort of a living. On the other hand Patreon paid out more than $150 million to creators last year, dollars that otherwise would have been more difficult for individual makers to access.

So whether or not any of the reported numbers are good news or bad news isn't really the question. It is the new reality for creators, for whom new options exist outside of the old system of limited channels, genres, and form factors.

To access the full report, entitled "Unlocking the Gate: America's New Creative Economy", click here.

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