Economy

Creators are shaping the next era of the digital economy

A new wave of tools being launched by digital platforms points toward a convergence between content and commerce.

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(Photo by ConvertKit on Unsplash)

Economic power is shifting to creators.

Take a look at the recent flurry of announcements from the platforms that power the digital economy, and you'll find creators being handed new tools to build businesses through approaches including commerce.

TikTok's fast rise was powered by creators who brought authenticity, honesty and inventiveness to the short-form video content on the platform. The growth of the platform led to more opportunity for brands to reach potential buyers, but it is the marriage of the distinctive format and creators that is the lifeblood of all of the activity taking place. That’s why many ads on the platform look like any other TikTok, right down to the low fidelity video quality and rapid-fire editing.

YouTube has long been home to creators who were able to monetize around their content, and became their own kind of celebrities through the platform.

“Over the last few years, we've paid out over $30 billion to over 2 million creators who are uploading more than 500 hours of content to YouTube every single minute, which is a lot of money,” Google Managing Director Brian Albert told Insider Intelligence in May. “It's over $10 billion a year.”

Increasingly, that monetization strategy led the creators to build brands. This wasn’t only about their ethos, but also resulted in new physical products. Through a partnership with Shopify announced this week, YouTube is providing ecommerce tools to help them sell those goods, from the ability to link an online store with a video channel to the ability to highlight products during a livestream. David Katz, VP of shopping product at YouTube, in a statement, said that the Shopify partnership will “help creators easily bring their stores front and center for their communities on YouTube, who are increasingly turning to them to shop.”

Meta has its own new tools. Facebook signaled this week that it's shifting its focus from news to creators, trading in the News and Bulletin platforms to center visual content in its algorithm. In recent weeks, it has been bolstering tools for creator monetization such as digital goods called Stars and introducing a new pay structure for Reels, while adding more interactive features for creators to make different kinds of content. Instagram, meanwhile, is testing a creator marketplace where brands can connect with potential campaign partners, and adding tools that enable creators to publish posts only for subscribers and enable in-app purchases.

Before and during its recently-completed Prime Day, Amazon put creators at the center of live video sessions on its Amazon Live platform to promote the event, as well as its efforts to let communities on other channels know about deals, as well. Meanwhile, Spotify debuted new tools to empower individual podcast hosts.

Creators are central to the platforms still being built, too. A new tool called DALL-E that generates images from a description has been hailed by early users for its potential to usher in a new era of digital creativity. On Wednesday, developer OpenAI announced that users in an expanded beta will have full commercial rights to the image, as well, including reprinting, selling and merchandising. That new wave of tech and creativity now includes monetization opportunities.

Meanwhile, the economy taking shape in discussions about the development of web3 is presented as one that champions creators, in which they forge a direct connection with their audience and can work independently of the platforms that now sit in the middle of that relationship. Cryptocurrency for exchange of value and NFTs for distribution of creations and ownership can be tools to get there.

It all signals an evolution of overlapping dynamics.

As the direct-to-consumer model rose more than a decade ago, brands were at the center. They were the central entities through which the exchange between consumer and product took place. In this period, it was the brands that were empowered with tools to build their own online stores. Meanwhile, social media provided the tools to reach an audience interested in buying from them. The ads featured on Facebook were for the brand, and developing a brand that inspired connection and even emotion was the foundation for attracting customers.

The emergence of influencers signaled a move toward the individual as that mediator. Influencers built their own fluency with platforms like Instagram, an ability to reach an audience and a carefully constructed and often aspirational image that was projected to the world. In some cases they even brought their own celebrity status and reputation as tasteful curators. They brought creativity, lifestyle and audience, but often it felt as though they weren’t making anything of their own. Their economic power was tied up with brands, and the followers they amassed. But in their promotion of others, the critique took hold that some were erasing well-reasoned lines between promoted and organic content while, like the advertising before them, selling an unattainable fantasy world in which they didn’t actually live, challenging their ability to build trust with their audience.

During the pandemic, a transition started taking place. The explosion of digital life meant more content was being created and consumed, while at the same time influencers were shifting from more luxurious, far-flung settings to something more authentic – not only to a more sequestered life as many were living it, but also the interests that were a part of it. TikTok rose, and creators along with it.

The prior two dynamics didn't end, but creators brought something new to the equation. The power is shifting squarely to an individual who is not a mediator, but rather a force at the center of the relationship. Creators are experts in increasingly specific categories, and bring their own voice and approach to partnerships with brands. They ask not just that the audience puts trust in them, but also the brands with which they work. They are also offering their own products, not only promoting those of brands. In other words, they're creating for themselves. Alongside this, the platforms are testing pathways that will ultimately make the content they create and commerce work together.

And that gets to the biggest change that is taking place. While some of this shift is about generational change and some is about whether approaches like live shopping or on-platform checkout will take hold, there’s something more fundamental happening in the space between brands, products, platforms and creators that gets back to the content itself.

Before, content was a means to attract customers, harnessed in service of the product or the building of the brand. In the creator economy, building starts with content. If it’s successful, it can create space and opportunities for products. That’s important not only for individuals to understand, but also for brands seeking to reach people on these platforms.

We may still be at the beginning of this shift. While there have been a lot of announcements all at once, it’s worth remembering that the tools that will power the rise of the creator economy are still being introduced. In the end, those tools’ ultimate value in creating opportunity and scale will be determined by how they’re used. Perhaps a new kind of product will emerge that we haven’t even considered yet. After all, they’re being put in the hands of creators.

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