When it comes to media interest and VC dollars the so-called “creator economy” is red hot. Investors poured a whopping $1.3 billion into companies hoping to help online creators monetize their talents in the first half of 2021, triple the funding such companies received in all of 2020. A quick Google search reveals countless articles chronicling growing interest in platforms like Substack, Clubhouse, and OnlyFans.
But how much of that excitement is just hype built around the success of a tiny number of superstar performers, and how much is a real shift towards substantial numbers of people being able to quit the 9-to-5 rat race to support themselves online?
Does the creator economy only work for superstars?
As VC Li Jin noted on HBR recently, “while some have been propelled to massive stardom, examples of a wide swath of the population achieving financial security from these platforms are few and far between….On Patreon, only 2 percent of creators made the federal minimum wage of $1,160 per month in 2017. On Spotify, artists need 3.5 million streams per year to achieve the annual earnings for a full-time minimum-wage worker of $15,080.”
But maybe things are starting to change. Stripe, whose payment tools are used by many creator economy platforms, recently released data showing that the ranks of what Jin calls the creator economy “middle class” appear to be growing quickly, if from a very small base. Clearly, Stripe has a horse in this race, but its data still suggests there’s more to the creator economy than hype.
A small but growing “middle class”
Stripe looked at data for 50 select creator economy platforms that use its tools, including Substack, Twitter’s Super Followers feature, Buy Me a Coffee, Interval, and Teachable. The bottom line takeaway: these platforms are growing exponentially, both in terms of numbers of users and revenue generated.
“We’ve found that creators will soon pass more than $10 billion in aggregate earnings,” the company reports. Even after last year’s spike of Covid-related signups subsided, “the number of creators is up a whopping 48 percent year-over-year. In total, these platforms have onboarded 668,000 creators,” it also notes.
And increasingly these creators aren’t just making pin money. They might not all be raking in seven figures like some of YouTube’s top stars but more and more are doing at least as well as your average American schoolteacher. “In the U.S., the number of creators earning a living wage (>$69K/year) has increased 41 percent year-over-year,” Stripe claims, adding: “We hope that this will continue to increase as novel methods of online creation are developed, unlocking new ways to monetize.”
This certainly doesn’t yet represent a mass shift away from standard employment towards selling NFTs, online courses, or risque photos. (Though the Great Resignation certainly suggests plenty of people are hungry for alternatives to the employee grind.) But it does seem like the first flickerings of a creator economy middle class.
“If the recent exponential growth of the creator economy keeps up, these 50 platforms could be supporting more than 15.5 million creators in five years,” concludes Stripe.