The Way Overblown Creator Economy

After years of hype, the creator economy is becoming a reality. Shut down influencer programs. investments dry up. And deteriorating economic conditions threaten to destroy creators and the technical infrastructure behind them.

While today’s economic downturn is causing widespread pain, the creator economy is suffering particularly because its middle class has not yet developed. Online content creation is still largely only viable for the top echelons of online creators. And if mid-tier developers can’t make it, the VC-funded platforms designed to serve them won’t scale. So it will likely be a while before link-in-my-bio startups are valued at $1.3 billion again.

Hard times for content creators

“People only have time to consume so much. So you have to be the best or one of the best in every area,” said Austin Rief, Morning Brew’s chief executive officer. “It’s really hard to be the 37th best financial designer.”

Most companies that make tools for developers will go under this year, Rief predicted, noting that the industry is smaller than many had hoped and that 99% of the value still goes to the top 0.1% of creators. Many in the industry have long held similar views, but kept them to themselves as VC dollars poured in. Now, in the midst of a downturn, it’s evident that the status quo will not hold.

“Trying to siphon off 5% commissions from an industry where even the top 1% are just simple multi-millionaires would never work,” said one top 1% content creator. “How are you going to reach a billion? Their addressable market itself is not a billion dollar industry.”

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Related article: How do brands invest in the virtual economy?

Creator Economy predictions now appear imaginative

Industry forecasts put the total value of the creator economy – a fancy term for the online content creation business – at $104.2 billion. The number seems fanciful now, especially since it includes money invested in startups that may never repay their investments.

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