Much has been written about the rise of Creators and Influencers, about the new stars and formats and how it is remaking journalism. I’m more interested in the economics and eco-systems.
My assumptions:
The Creator-Influencer Economy represents a shift in the primary networks in content distribution.
Young people dream of riches, but most will be disappointed. Once a new network is established in media, power laws quickly take hold. Just as with legacy media, the Creator Economy is a winner-takes-most market.
The Creator Economy lives by the algorithms and dies by the algorithm as legacy media found.
The latest chapter in the Attention Economy
The theory of change that has been the most durable over the last 20 years of my career has been the Attention Economy. Psychologist, economist, and Nobel Laureate Herbert A. Simon coined the term in the 1960s, and he believed that “a wealth of information creates a poverty of attention”. In our world, we are drowning in information. In a world where media choices are almost unlimited, time and attention are scarce. It radically changes the economics of media, and it has been the constant over my career.
Changes in distribution and new forms of media have been adding to the amount of information available over the centuries. First, it was the penny press, then radio, then TV, then cable and satellite TV and finally the internet and various forms of digital media. All of these changes have created shifts in the Attention Economy. In 2021, Americans spent 3.16 hours a day watching traditional TV and three hours watching digital video, but in 2025, it is estimated that they will watch 2.48 hours of traditional TV but four hours of digital video, according to data from Statista. “In 2022, 89% of UK children habitually consume content on video platforms like YouTube and Tiktok, while fewer than 50% habitually watch live TV”, Chris Rainville and Simon Levene of Mosaic Ventures wrote.
Attention, and with it, revenue shifted to new platforms that aggregate attention globally on a mass scale. YouTube, TikTok and Instagram are massive attention marketplaces, and newsletter platforms like Substack and Beehiiv provide network effects and revenue infrastructure. First, the network effects: YouTube, TikTok and Instagram all have finely watched and tuned algorithms to deliver more of what you want. Beehiiv and Substack both have referral programmes and network functionality that drive free and paid subscriptions. (For a good overview of Substack’s network mechanisms, M.E. Rothwell goes deep into the network science of it all.)
The success of these platforms is the development of mechanisms to increase your consumption of them. It is why direct-to-consumer video platforms are so much more effective than linear TV in driving consumption. Linear TV will show everyone the same ads about the same programmes. The channels are the mechanisms to aggregate attention. Multi-channel television was just an inelegant way of achieving the same thing by cutting up content and audiences into smaller niches. But with Netflix and any D2C video platform after it, discovery is driven by your use and interests not by showing ads for shows to a single, homogenised persona of their assumed audience. The platforms are built to drive habitual consumption.
Time and attention are finite, so all of the time spent watching YouTube and TikTok or reading Substack or Beehiiv newsletters means less time for other things, like consuming traditional media. Money that used to flow to newspapers, radio and traditional television has shifted to these platforms as they have captured a larger share of attention. With the massive audiences these platforms attract, multiple revenue streams have developed to support creators: advertising, affiliate marketing, sponsorships, live events and merch.
It has minted not only stars but also new media entrepreneurs. Audiochuck, the true crime and mystery podcast network founded by Ashley Flowers in 2017, just received a $40 m investment from the Chernin Group that values her business at $450 m. Over half (57%) of Gen Z-aged people want to be influencers, according to a Morning Consult poll of 1000 young people. As I wrote in my last newsletter, Goldman Sachs Research forecasts that the Creator-Influencer Economy will double to $480 bn by 2027. Some of the Gen Z people in the poll said they were seeking money and fame, while others said they wanted connection and community.
Power laws and the creator economy
When a new medium first launches, there is an opportunity for new voices to establish themselves, but as with most digital markets, power law dynamics quickly take hold. As Chris and Simon of Mosaic Ventures wrote in 2022, creator audiences are highly concentrated. They analysed the number of YouTube subscribers, and less than 1% of accounts had more than 100,00 subs. And they highlighted how less than 1% of Twitch streams earned half of all revenue. They believe the same power law curves exist on Substack and OnlyFans. Goldman Sachs Research estimates the global number of creators will increase 10% to 20% by 2028.
This is where traditional economics kicks in. Oversupply depresses prices, or in this case wages. People flock to media for money, fame or mission. With power law driving the Attention Economy, it means that the vast majority of creators will not earn what Goldman Sachs refers to as professional wages.
Only about 4% of global creators are deemed professionals, meaning they pull in more than $100,000 a year. Goldman Sachs Research expects their share of the creator universe to stay steady even as the overall ecosystem expands.
Goldman Sachs Research
Almost half (48%) earned $15,000 or less, according to research from NeoReach. That might be a nice source of supplemental income, but it won’t pay the bills. And the income can be quite unpredictable. Clint Bentley was profiled in a Wall Street Journal article. The 29-year-old has 400,000 followers across TikTok, Twitch and YouTube, and earned $58,084, which is in the upper third of earners, but he still lives with his parents because of the volatility of his income.
Live by the algorithm and die by the algorithm
And just like traditional media that has found they need to keep pace with changes in algorithms, the same is true with the Creator Economy. The difference is that platforms are tweaking their algorithms to the benefit creators, while Facebook and X have both tweaked theirs to the detriment of traditional publishers. But it means that for many creators, their businesses are built on the rented audiences of the platforms. Of course, those creators who have built communities and networks of their own and direct supporters through platforms like Patreon have more of a safety net. One of the creator community networks I follow is vintage computing - Sean of Action Retro, Kate of Macintosh Librarian and Steve of Mac84. They have loyal followings and operate in a mutually supportive community, helping create a larger audience and deeper relationships. Traditional media has made a similar pivot to direct relationships with subscribers and members as platforms have sent less traffic to drive ad impressions.
Something else is at play here: Creator-Influencer businesses are leaner than the large legacy media organisations. In the barbell media economy, big legacy players like the New York Times are the winners that take the most of the pivot to reader revenue and multi-market, multi-product businesses. On the opposite end are agile but also very lean creator businesses. Some are solopreneurs, but others have grown to become nascent media companies in their own right.
Axios’ Sara Fischer was on Brian Morrissey’s Rebooting podcast talking about the Creator-Influencer Economy, and she was quite direct. These new players don’t have the overheads, high-cost structures or, yes, unions, that legacy players have, she says.
Taking a step back, the distribution networks have changed, which has shifted power from television, cable and satellite networks. A Media Operator is reporting that VCs and funds are looking for roll-up investments in the Creator Economy that will drive concentration. This is to say that the Creator Economy is looking a lot like the traditional media economy. The thing that has changed is the distribution networks that are aggregating attention and revenue.
News influencers are a slightly different subset of this economy, and that’s on deck for another newsletter about that. If you want to get ahead and read more, Liz Kelly Nelson, who is laser-focused on this, breaks down where news influencers sit in the new news eco-system.
Newsletters: The cockroach of digital media
These are the stories that caught my eye while I thought about the Creator Economy.
The humble newsletter is like the cockroach of digital media—hardy and resilient. It is the MVP of many digital media operations. In fact, Sarah Ebner of the FT says it is the “biggest driver of reader engagement”. I talk about newsletters as part of the post-platform Push Economy of media. Audiences have committed to content that is pushed to them: newsletters in their inboxes, podcasts in their favourite apps or the push notifications of media apps. Continuing the theme above, she says that the personality-driven newsletter is one of the developments she has seen in her decade of work on the format.
Media builds its own social spaces
I’ve been following how publishers are reviving their own efforts at creating communities to challenge the dominance of the major social media platforms. I was told by a friend in the industry that Buzzfeed’s Jonah Peretti has talked about launching a social network before, but it looks like he is serious this time. He has a hypothesis that people are craving digital services that don’t feel like they are manipulating them emotionally. I don’t disagree with him, but Buzzfeed played the game of the social networks a long time that I don’t trust it as a brand to bring something authentic to the table.
Jeff Elgie is one of the most interesting leaders in the local journalism market, and his Villiage Media has launched its place-based social network on select sites in its Canada-based news network. Jeff is smart and focused, and this is an experiment to watch both in terms of audience engagement and how it drives KPIs for the business.
With so much doom and gloom in the industry, it is always good to hear about success and learn from it. Le Monde’s successful subs strategy has allowed it to double the size of its newsroom and see a point where its digital subscribers will pay for that enlarged newsroom.
AI roundup: NYTimes newsroom rollout, Thomson Reuters court win and how journalists are using it
AI is proving itself an important tool for publishers to make their operations more efficient and their revenue models to increase conversion and decrease churn more effective. The New York Times might be fighting OpenAI in the courts, but it just announced a major deployment of AI in its newsroom.
If this case holds up on appeal, it would be a major precedent. AI companies have relied on US fair use provisions to justify their scraping of content from their Westlaw service by a company called Ross Intelligence. Key to the ruling was that the judge found the AI company was attempting to create a market substitute by scraping Westlaw’s content.
AI adoption is industries often outpaces official guidelines. Experiments with the technology both as part of formal programmes or individual efforts are happening across the industry, and Editor & Publisher provides a useful overview.
An old friend, Mark Jones shared this, and it’s a good one to bookmark and use. I saved it because I should follow the suggestions more than I do!