The Relentless March of the Creator Economy

Imagine that from the time you were young, you worked hard to join a very exclusive, powerful club. Eventually you made it, cementing your steadfast, lifelong belief that you, among very few, belonged there.

Then another club opened next door. It let everyone in. It felt like a mockery of what you had achieved. But it kept growing, attracting more members, siphoning off more attention. Young people fantasized about joining that club, not yours. Your club now seemed stodgy and out of step.

This describes how many in traditional media feel about so-called creators. They regard them as less than, crassly commercial, and certainly not artists. When The Hollywood Reporter christened a new Creator A-List, the actor Justine Bateman dismissed it as a list of infomercial salespeople, not Hollywood.

Whatever your value judgments, whether the creator economy is a positive, democratizing force or a bastardization of art full of self-promotional hucksters or something in between, the numbers do not lie. It is growing rapidly at the expense of traditional media, and it will keep doing so.

The short version

Subdivide media and entertainment into two economies: the corporate media economy and the creator media economy. Since media and entertainment overall is barely growing, the relationship between the two is mostly zero sum. Based on a bottoms-up analysis of the largest creator outlets, I estimate the creator media economy generated close to $250 billion in revenue last year, roughly 15% of the global market. It is growing far faster, and over the last four years it accounted for almost half of all media growth. Conservatively, I estimate it will exceed $600 billion and 25% of the global market by 2030.

There are powerful reasons it could grow even faster: creation keeps getting more accessible; generative AI will trigger a flood of creator content; the quality gap between the best creator content and corporate content keeps narrowing; falling trust in institutions favors creators; monoculture is declining as audiences atomize into microcultures; younger demographics spend far more time with creator content; and the gap between creators' share of time and their share of dollars should narrow. All of this is mixed news for creators. For traditional media there are only two choices: figure out how to participate in the creator economy, or accept a perpetually shrinking business.

Defining the creator media economy

There is no consensus definition of creator. Sometimes the word is treated as synonymous with influencer, which is narrow, since it confines the creator economy mostly to Instagram, TikTok and YouTube. On a recent episode of The Colin and Samir Show, Samir drew a useful distinction between a creator and a creative:

A creator is someone with a distribution mind. They are thinking about what they make that is going to reach the most people. They are an independent media company. A creative is working on the craft, the skill set, and they typically get hired to direct things or support other people in making their thing.

Since I focus on the business of media, the distinction that interests me most is between traditional media, which we could call corporate media, and creator media. The corporate media economy is the ecosystem of traditional content creation, distribution and monetization. It usually entails institutional ownership, centralized decision making, portfolio-level risk management, and several intermediaries between the creative and the consumer who provide financing, marketing and distribution. Most of the household names in media and entertainment are intermediaries.

The creator media economy, as I am defining it, encompasses all other media monetization. It is the ecosystem in which independent creators make content on a self-directed basis, have a direct relationship with consumers, and have that content monetized. The passive voice in that last clause is deliberate: the content is monetized by someone, even if not always by the creators themselves. A gray area is small independent teams of, say, 50 people or fewer. I put these in the creator category. Mr. Beast runs a full production company with multi-million dollar budgets, but for these purposes he is a creator.

The two economies are a zero sum game

The overall media and entertainment market is not growing much globally, slightly less than the rate of inflation. The reason is that time spent with media has stagnated. It grew with the advent of mobile starting in 2008 and had a bump in 2020, but it has been flat or declining since. Since media revenue is derived by monetizing consumer time and engagement, the overall market struggles to grow faster than inflation when time spent is not growing.

These two economies are mutually exclusive and cumulatively exhaustive. Every dollar of end-market media revenue is one or the other. As there is only one pool of consumer time, the relationship between them is largely zero sum. Growth in the creator economy mostly comes at the expense of the corporate one.

Creators earn money on a lot of platforms

Creators' work is monetized across a wide variety of outlets: social networking (Meta, YouTube, TikTok, Snap, Pinterest, X), patronage and community (OnlyFans, Patreon, Discord), gaming (mobile gaming, Steam, Epic, Roblox), livestreaming (Twitch, Bigo Live, Huya), music (Spotify, Apple Music, Soundcloud, Bandcamp), podcasting, influencer marketing, and writing (Substack, Medium, Ghost, Beehiiv).

The proportion of revenue attributable to creators ranges from very little to all of it. In gaming, a relatively small share of mobile game revenue goes to independent developers, slightly more for Epic and Steam, and for Roblox almost all of it. In music, Spotify reported that the major labels and Merlin accounted for 74% of streams last year, so roughly 25% of revenue is attributable to independents, while almost all revenue on Bandcamp comes from creators. On social and patronage platforms the majority or virtually all revenue is attributable to creators. Influencer marketing, the sponsorship fees brands pay directly to influencers, is entirely attributable to creators.

How big is it?

Applying those proportions to the reported or estimated revenue for each outlet, I calculate that total creator media economy revenue was a little shy of $250 billion last year. That was almost 15% of the total $1.7 trillion media and entertainment market, and it has been growing much faster. While the total market has grown about 5% annually over the past four years, I estimate the creator media economy has grown around 25% per year and corporate media around 3%. So although creator media is a relatively small portion of the total, it has accounted for almost half the growth.

The creator media economy has accounted for about half of total media revenue growth over the last four years.

The shift will keep going

A simple exercise shows how much larger the creator media economy will be by the end of the decade if it keeps growing anywhere near its recent pace. Assuming the total market grows about 4% through 2030: at 10% annual growth, the creator economy reaches $460 billion and 20% of the market; at 15% it reaches $630 billion and exceeds a quarter; at 20% it approaches $850 billion and exceeds a third.

Since no one likes wishy washy, here is a point estimate. I forecast that the creator media economy will more than double by the end of the decade, exceeding $600 billion and 25% of the entire market. There are good reasons it could grow even faster. Let me walk through them.

1. The volume keeps growing, even without GenAI

There is already a vast amount of independent content. Roughly 20,000 times as much video is uploaded to YouTube each year as Hollywood produces. About 98% of artists on Spotify are hobbyists, and they upload around 100,000 tracks per day. There are more than 30 times as many games on Steam as Xbox supports. This gulf will only widen, because the more accessible it is to create, the more people create. Humans have an innate desire to make things. Every known culture has produced art, music and stories, and people make art in the most extreme hardship: in prison, during war, in dire poverty.

The empirical evidence backs this up. Kodak estimated 80 billion photos were taken in 2000; current estimates are close to 2 trillion this year, a more than 20-fold increase driven by the constant availability of cameras. YouTube makes creation relatively hard, and roughly 4% of its users also create; TikTok makes it easy with in-app cameras, editing, filters and music, and 83% of its users have posted a video. In 2004 there were a few thousand podcasts; today there are more than 4 million. Creation tools will keep getting friendlier, but the most significant innovation is likely to be generative AI.

2. GenAI will trigger a flood of content

If I distilled the last couple of years of my writing into one sentence, it would be this. The last two decades in media were defined by the disruption of content distribution, enabled by the internet. The next decade will be defined by the disruption of content creation, enabled by generative AI.

GenAI automates creative decisions. Prior innovations mostly made it cheaper for humans to execute creative decisions. They did not reduce the number of decisions. GenAI can automate the decisions themselves. Humans can choose how much to delegate, from almost everything to relatively little, and even with substantial human oversight it can automate a lot of decisions and dramatically speed the process.

It is a general purpose technology, so it advances fast. Most content-creation innovations of the last decade were domain specific: cameras on phones, cheaper microphones, audio workstation software, free game engines. Advances in one domain did not necessarily help others. GenAI, like the internet, is a general purpose technology.

Just as bits were a new atomic unit for the distribution of information goods, tokens are a new atomic unit for its creation.

General purpose technologies advance far more quickly than narrow ones. They attract orders of magnitude more capital, labor and brain power; breakthroughs in one domain benefit others; they create new bottlenecks that spur adjacent innovation; and wider adoption means faster feedback loops. Over time GenAI will be embedded seamlessly in Adobe, YouTube Studio, TikTok, Soundcloud, Roblox and probably every other creation tool. It may feel like there are a lot of creators already, but 114 million YouTube channels, 10 million Spotify artists, 4 million podcasts and 80,000 Steam developers are all tiny relative to the potential global population of would-be creators.

3. The quality gap will blur

The biggest knock against creator content is that it is low quality, and on average that is objectively true. No one watches, listens to or plays most of the stuff on YouTube, Spotify or Steam. The criticism is also irrelevant. In a power law distribution the average is inconsequential. What matters is the head of the curve, the most popular content, and the quality of the head will likely keep getting better relative to corporate-produced work.

Production values from GenAI keep improving, as anyone paying attention to text, image, audio and video models can see. The consumer definition of quality is also shifting. Quality is not a stated opinion, it is revealed preference: people's choices indicate what is higher quality to them, and those choices change over time. People who have been in a field a long time get anchored to a fixed definition, while consumers' definitions are fluid, especially for younger people. The creator economy introduces attributes consumers clearly value: authenticity, relatability, intimacy, social relevance, digestibility, niche appeal and low friction. Every time someone slumps on the couch and picks up their phone to scroll Reels rather than watch the Netflix on the TV a few feet away, they are signaling that Reels is higher quality to them in that moment. In a recent YouTube study of 12,000 viewers, 90% said quality is determined by both technical and emotive markers, including whether something means something to them personally and feels authentic.

Scale compounds this. Hollywood produced about 15,000 hours of new TV and film last year, against close to 300 million hours uploaded to YouTube. If only one hundredth of one percent of YouTube content is competitive with Hollywood for a viewer's time, that is 30,000 hours, twice Hollywood's annual output. Some established talent will also defect. Technology makes it easier for creators, and creatives, to produce, market, distribute and monetize content themselves, increasing their leverage over intermediaries or letting them bypass intermediaries entirely. As economic pressure grows, traditional media companies become more risk averse and less fun to work with, while going it alone becomes more viable and more lucrative. This has already happened in journalism, where writers like Matt Taibbi, Bari Weiss, Glenn Greenwald, Matt Yglesias and Casey Newton left established outlets for Substack.

4. Falling trust favors creators

In the U.S., and probably most of the West, trust in centralized institutions has fallen for decades. Trust in government is at all-time lows, and so is trust in mass media. Trust and authenticity are complicated in the creator economy. Many creators are not seen as authentic, and those who are can lose trust and audience quickly if they appear too commercial. But the creator-consumer relationship is parasocial. Because it is often unvarnished, unmediated and un-institutional, fans feel like they personally know the creator. Structurally, that relationship creates more natural conditions for perceived authenticity, and when a creator earns trust it tends to be more personal and resilient than institutional trust.

5. The demise of monoculture

Many have lamented the end of monoculture, the big shared cultural experiences. Touchstones still exist, like Taylor Swift, the Super Bowl, Barbenheimer and GTA 6, but they are fewer and further between. According to YouTube's Culture and Trends report, half of Gen Z respondents say they belong to a fandom that no one they know personally is part of.

Most readers grew up with monoculture. I remember the finale of M*A*S*H, when over 100 million people tuned in. But mass media is only about a century old. We might be nostalgic for monoculture, but it may not be our natural state. Attention has fragmented partly because of the huge increase in choice, but mere availability is not enough. People are actively choosing to spread their time across more content, or microcultures. Whether you think this decline is good or bad, it is happening because people prefer the alternative. Corporate media is only viable when it programs to a wide audience, so further atomization means more share shifting away from it.

6. Demographics point one way

Younger consumers spend more of their time with creator content than older cohorts do. More than a third of Gen Z is on social media over two hours a day, and almost three quarters of adults aged 18 to 29 follow creators. Demographics are destiny. As younger demos make up a larger portion of the consumer base, and if they keep their disproportionate use of creator content as they age, it becomes a permanent tailwind for the creator economy.

7. The monetization gap should narrow

The creator economy's share of media revenue lags its share of time spent. I estimate social video is about a quarter of all time spent with video in the U.S., and about a quarter of Spotify streams come from artists not represented by the majors or Merlin. These are decent proxies for the share of media time spent with independent content, well above its roughly 10% share of global revenue.

Over time this gap should narrow, even if it does not close completely. Money follows eyeballs, with a lag, because new outlets need new formats, measurement, attribution and budgeting cycles, and a lot of ad spending is still driven by relationships and last year's plans. There is also an ongoing mix shift toward digital-native businesses, which allocate more of their budgets to the creator economy and are becoming a larger share of the economy. And creator monetization models are still young: Patreon launched in 2013 and Substack in 2017, and ad-supported platforms have only recently let creators offer subscriptions. Just as traditional media took decades to optimize cable bundles, retransmission fees and windowing, the creator economy should see similar refinement over time.

Less than or not, it is where the growth is

The trend is hard to reverse because there are so many tailwinds behind creator media. It is really just a question of how fast it proceeds. For creators the future is a mixed bag. It is good to have the wind at your back and monetization tools should keep improving. The offset is that competition is near infinite, power laws are merciless, and the losers will outnumber the winners by many orders of magnitude.

Creatives will face a perpetual question of when it is better to go direct rather than work through traditional intermediaries. Many have not historically thought like owners, but ownership of their output, and creative control, will become an increasingly viable option. For traditional media companies the growth of creator media may be unsettling, but it is time to move into the acceptance phase. There are only two choices: figure out how to participate in the creator economy, or accept a perpetually shrinking business.