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Over 500 hours of video are uploaded to YouTube every minute according to findings from 2019. Over 60,000 songs are uploaded to Spotify every single day. It seems that anyone can be a content creator, music artist or video director. The media creation formula has been completely democratized.
This shift has started an explosion of new, innovative content. With all this content, there is now a burden on consumers — “analysis paralysis” is real. So much so, that platforms like TikTok have also boomed in popularity, where the end-user receives an algorithmically generated feed that automatically adjusts to their interactions. Users are spoon-fed content, and all they have to do is scroll and watch.
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We have all been there: hypnotically scrolling for hours on end, captivated by new media and comments. The “mindless doom scroll” solves this issue of overwhelming choice, almost too well. To cite Professor Scott Galloway of NYU Stern School of Business: “Consumers don’t want more choices, they want more confidence in the choices presented. TikTok has taken this to a new level by eliminating the burden of choice entirely.” He estimates that in 2021, a total of 22.6 trillion minutes of content was watched on TikTok. Compare that to the long-format binging platform Netflix, which he states clocks in at 9.6 trillion minutes of content watched.
This ecosystem gets interesting when we realize that behind every person scrolling is someone creating that content. The platforms that capture the world’s attention are two-sided. TikTok, YouTube, Spotify and Instagram (Meta) have become behemoth companies by creating and controlling this “attention economy.” Implied in this is the focus on the consumption side of the equation, which, as we will discuss below, is creating an unsustainable imbalance in the ecosystem. Perhaps it is time that new behemoths rise on the other side of that market: building out the “creation economy.”
To understand the ecosystem as it lies today, let’s dive in from the perspective of a YouTube content creator. Content creator Jade Beason is a creator on multiple platforms, uploading weekly content and coaching other aspiring content creators with tips for getting discovered and monetizing. In one video, she estimates spending $5,700 per month on gear and other services to keep creating content weekly; and she is not alone. Taking into account the fact that YouTubers with 100,000 subscribers make anywhere from $500 to $2,500 per video depending on the creator and ad preferences (and she has less than 70,000 subscribers), it does not take an accounting degree to see that this does not quite add up.
Surely, creators like Beason can monetize on various different platforms but this does not solve the deep disconnect in the “cost of doing business” as a creator today and reaping the monetary rewards (if any).
Even though Beason’s situation is singular, it outlines the greater problem: Though the barrier to entry is low, creators are forced to spend serious cash to create quality content that captures users’ attention. On the other end of the spectrum lives MrBeast, who spends over $65 million per year on his Youtube videos. Perhaps he can serve as a case study in achieving “creator economies of scale.” Not everyone is MrBeast, unfortunately, and by the time they upload, most creators are already “in the red” — and herein lies the problem.
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Creators have no concrete growth levers to pull, and thus, no real opportunities for ROI. Their only real options for growth are currently:
1. Get lucky at the whim of the algorithm — cross your fingers and just upload. This is how most creators operate today. It results in the large discovery chasm we live with. How large is it? Taking Spotify as a reference, nearly 80 percent of music artists on the streaming platform — around 6.3 million — have a monthly audience smaller than 50 people.
2. Use digital marketing to get noticed. Most small businesses grow via digital ads these days, right? For creators, the economics are not as easy. Marketing spend for small businesses with higher margins gives them room to invest in ads, whereas creators are operating within much tighter returns, making it harder to justify spending roughly 30 cents per click. Creators can solve this by getting fans to purchase beyond streaming, i.e., by adding merchandise, learning courses or live events. (Here are some other strategies.)
However, even if they pass that first ROI hurdle, getting those users in requires a whole different skill set — digital marketing. The difference between the evolution of digital marketing and content creation is that marketing is still yet to be truly democratized. The reality is that it is still very difficult to be proficient. Therefore, it is no surprise that creators often lack the technical skills to take advantage of digital marketing opportunities. In addition, the vast majority of creators also lack the budget to pay for proper digital marketing help.
So if they are unable to do it themselves, and it is too expensive to pay somebody to do it, how can creators sustainably grow?
1. Build out your funnel. Ensure that you have a clear path you want fans to take that ends in a single call to action. Is it to buy merch? Subscribe on YouTube? Follow on Spotify? This funnel is imperative because it allows you to increase the chances of turning a potential fan into a real one.
2. Analyze your funnel. Once traffic is coming through the funnel, you can compare how many people are coming in with how many people take that action. For instance, what if you found out that one out of 100 people who view your page actually ends up buying a live event ticket? Now you know how much traffic you need to send to the “top of the funnel” in order to reach your ticket sales goal. These conversion rates typically stay constant as they scale.
3. Invest into getting eyeballs, even if at the minimum level. Even with the smallest of budgets, FB, IG, TikTok or Google ads allow you to start garnering eyeballs and, most importantly, data for your content. With the right funnel, you can “bootstrap” your way up from here; but you have to start somewhere.
Content creators have capitalized on the democratization of developing content today. The focus now is on growing sustainably.
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