Creators Assemble! What’s This Big Fuss About This “Creator Economy?”
The creative economy has finally come full circle. Creator-focused fintechs are addressing the long-neglected industry with payment solutions, only spurred on by the innovations we’re currently experiencing such as NFTs. But wait… how did we get here? What the hell is the “Creator Economy?” And what does this mean for African creators?
[This is Part One of the “Fintech African Creator Economy” where the creator economy will be further explored from its inception, current trends and industry improvements made, powered by fintech solutions]
By now, many of us are familiar with Ryan Kaji, the 9-year-old boy announced as the highest-earning Youtuber of 2020 — all from unboxing and reviewing toys and games. Boasting 9 channels, 42 million subscribers and nearing 13 billion views, Kaji made almost $30 million from his channel, with an additional estimated $200 million made from “Ryan’s World” branded toys and merchandise. He’s only one example of creators that are making a fortune in a time when the dominance of traditional media consumption (television, radio, print, etc.) has been overtaken by the proliferation of internet-centred media, available from 9" — 60" screens. But Ryan is what I’d deem to be an extraordinary exception. Every day, creators continue to contribute in nurturing and growing the content we sometimes mindlessly enjoy — informing, entertaining and educating their audiences.
So, what is this “creator economy”…? Simply put, these are people who have leveraged tools and their online communities, to generate an income from making and distributing online content. The recognition and global acceptance of content creation, as an occupation, is not new. However, the industry received its limelight in 2020, influenced by various macro factors, from the rise of the gig economy to the ongoing effects of the Covid-19 pandemic and culminating in fintechs, financial institutions and adjustments to legislation in providing payment solutions to the creators — hell, even the crypto industry is accommodating the creators in the form of NFTs (non-fungible tokens) — but more on this later.
Kian Bakhtiari explained this perfectly by stating, “The creator economy is powered by a thin layer of technology hosted by content subscription platforms like OnlyFans, Substack and Patreon”. Creators are not short on platforms to successfully generate content, demonstrated by teachers crafting online courses to sell on Udemy, amateur adult content producers selling exclusive photos/videos for a monthly fee or even a subscription service, such as Substack, geared towards newsletters, continue to add to this media mix which is constantly fighting for our attention”. Nurturing their online community, not only means that the creator has a potential client base of dedicated fans, but it also ensures that they have the ability to leverage this community — cutting out brands and advertising agencies completely.
Let’s introduce a home-grown example of the creator economy in action: MacG’s Youtube channel. Recently celebrating 100 000 subscribers less than two weeks ago (now sitting at just under 170 000), MacG’s platform now boasts six solid (and growing) segments, paid membership perks and a growing roster of sponsorships. The 33-year-old broadcaster has been active in the entertainment industry for over 14 years with notable gigs on the regional youth radio station YFM to a six-year stint at the national radio station, 947 Highveld Radio. Being no stranger to controversy, MacG’s free-talking and “anti-interviewer” style has attracted an almost cult-like following (called “Chillers”), resulting from interviews with prominent social personalities. The environment in which he creates to interview these personalities is one that is quite free and open to discuss topics that wouldn’t ordinarily be discussed on traditional media, as a majority of the South African society is quite conservative — despite the facade we hold up. One of my favourite Twitter users, @Mashstartup, once tweeted:
“The internet has no gatekeepers. If you have the means to create, the platforms to share it & learn how to maximize those platforms to reach the people that matter — you don’t need anyone else’s validation to win”
Fewer statements can be truer and MacG’s platform, from podcast to Youtube videos and even the sale of his branded gin are all testament to the growth and potential of the African creator economy. 2018 to 2020 could be deemed the years in which the channel experienced its most growth, marked with sponsorship from two prominent brands and the subsequent termination thereafter — amid conversation controversies, as per his trademark. However, the strength of his brand, burgeoning audience and revitalised style of celebrity interviews, has also attracted a new sponsor in the form of Supa TV — South Africa’s first gaming television channel. This is an example of attracting brands that align more to the creator’s niche.
From 2021 and onwards, brands should be looking to creator communities to increase brand awareness, restore consumer trust and reach beyond transactional relationship, sentiments shared by Millenials and GenZ, alike. In parallel, these brands should place their trust in creators to control the brand’s message in communicating it to their fans by not only allowing for free reign but also investing their money in these creators. The chances of brands associating themselves with the right creators are enough to cement credibility and increase their reach by tapping into an array of audiences, they wouldn’t otherwise have access to. Ultimately, brands should play a supporting role to the creators and rethink their consumer value proposition by introducing convenient payment methods, membership perks and subscription models.
This permission-less era of the internet we find ourselves in also presents a host of legislative challenges and opportunities for policy reform. Applicable to not only online creators, but for existing/upcoming artists, examples such as TikTok South Africa’s decision to pay for musician’s royalties through their multi-year licencing deal with the South African Music Rights Organisation (SAMRO). On the opposite end, the South African government is also flirting with the prospect of imposing taxes on online content, starting with taxing earnings from the subscription service, OnlyFans. It remains to be seen how they intend to extend and enforce this ruling across monetised online platforms of which its results cause a blow to the creator’s income.
The global rise of the creator economy has introduced a decentralised model that reduces the power of centralised organisations in the ownership and distribution of individual creative works. Additionally, the worldwide adaptation of cryptocurrencies, coupled with the trend of collective ownership of digital assets such as non-fungible tokens (NFTs) are paving the way for easier possession of these creative works. The establishment of these payments and ownership models requires the need for fintech concepts that not only eases access to the population but also works to benefit the creators themselves, either by navigating red tape or improve payments facilitation. The Square (the payments processor and owner neo-bank, CashApp) and Tidal deal signed earlier this year is a signifier of the convergence of fintech enablers and the creator economy, to the benefit of the creator, rather than their host platforms. For now, the existing use-case would be geared towards NFTs, but in time, we’ll see more expandable use-cases for creators and their communities at large.
In Part Two we’ll take a deep dive in understanding what NFTs are, the role of current enablers and the impact of blockchain managed ownership on the creator economy. There has never been a more exciting time to be a contributor and participant in the online community, as 2021 and beyond ushers in new opportunities to earn, grow and thrive.
So Creators, what new innovations, processes and trends, are you looking forward to that will make it easier to produce, distribute, own and earn from the content industry?
This article was written by the Editor of PaySpective, Ayakha Moloko. Having been involved in the fintech industry from 2013, by first building a payments solution and now currently working for a leading payments processor, Ayakha’s passion revolves around the ever-changing fintech landscape. PaySpective was formed from a need to address societal payments issues and inspired by the Creators who build interesting platforms to solve them. Happy to connect on Twitter or LinkedIn, where I share further information insights, opinions and current affairs around the exciting fintech space. For more personal thoughts and musings on African current affairs, family and friends, as well as navigating the journey on fatherhood, be sure to check out the Medium blog too :)