Social media creators are turning to monthly subscription services to generate revenue directly from fans, trying to find a stable revenue stream in an increasingly competitive and volatile market.
The creator economy will reach its peak in September 2021, According to research The U.S. Bank Institute released it this month. While the average monthly income of content creators has increased over the past three years, the average full-time U.S. employee earns five times as much.
“This suggests that it is rare to earn a full-time salary in content creation, let alone become wealthy,” said the study, which was also conducted by the Bank of America Research Institute, a research firm using Bank of America clients. Research think tank.
Analysts at Bank of America Research attributed this to a slowdown in paid partnerships, more competition in the creator market, a decline in online viewership since the pandemic, and a concentration of paid partnerships among top creators.
Content creators told CNBC that while online virality is unpredictable, turning content creation into a full-time career requires meeting certain financial needs, such as the ability to pay monthly bills. As a result, creators are looking to diversify their revenue streams, and in addition to paid partnerships, many content creators are increasingly looking to monthly subscription platforms like Substack and Patreon to maintain consistent monthly revenue.
Substack and Patreon have become attractive options because they enable creators to charge their followers directly for content. Creators can pay a monthly fee to offer different tiers of subscriptions to their followers, with each tier including different benefits. Since launching in 2013, Patreon has paid out more than $8 billion to creators, while Substack claims to have more than 4 million paying subscribers.
On TikTok and Yuan On Instagram, creators must use an algorithmic model that controls when their content is displayed, making revenue for these apps highly volatile. Depending on how these platforms choose to promote their content, revenue can fluctuate wildly, spiking or plummeting.
“I can’t rely on it to pay my bills,” said Molly Burke, a woman with more than 4 million followers on her social apps. “As an entrepreneur, as a business owner, as a creator, I have to figure out how to sustain this career as long as possible.”
Molly Burke is a creator known for her films about life with blindness and everyday life.
Social media platforms increasingly rely on algorithms to determine what content users see based on their past interactions and preferences. These algorithms analyze user behavior to create personalized content sources, which often prioritize posts that are likely to generate engagement, such as likes or shares.
As a result, many creators feel pressured to produce content that caters to the algorithm, even if they think it reduces the quality of their work, content creators say.
“It has ebbs and flows,” Burke said. “Sometimes my TikTok will be trending and I’ll get all the views and then the algorithm will go down a little bit.”
While nearly half of creators work full-time, most rely heavily on brand deals for income, with more than two-thirds citing brand partnerships as their primary source of income, according to the data. a separate study Provided by influencer marketing agency NeoReach. The study found that despite the global influencer market reaching $21 billion by 2023, more than 48% of creators still earn $15,000 or less annually. April 2023.
Burke, a creator known for his videos about life with blindness and everyday life, has been producing content online for five years. While it’s not her largest source of income, she uses her Patreon income to help cover basic expenses including rent.
“I feel very lucky and grateful because this is a source of income that I can rely on and I know that at least I can pay my rent this month,” she said.
Subscription platforms like Patreon solve this problem by allowing creators to bypass the algorithm entirely and connect directly with their most loyal fans who are willing to pay for exclusive content.
“Membership itself is a huge business for creators,” Patreon founder and CEO Jack Conte told CNBC. “It’s creating a predictable, reliable, huge revenue stream for creators. , on a scale we have never seen before.”
Zach Kornfield and Keith Habersberger of Try Guys
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try guysThe comedy group is known for its challenge videos and has 8 million subscribers and 2.7 billion views on YouTube, but in May, they announced Launches its own streaming service “2nd Try”. The group is moving most new titles to a $5-a-month paywall, where subscribers can watch new content without ads.
The company said that in the three months since launching 2nd Try Expected to make a profit.
“We needed to build something that was at least more consistent,” Try Guys co-founder Keith Habersberger told CNBC.
