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What Does Creator Economy Mean and How Does It Work?

Kaela Johnson
Written By
Kaela Johnson
Published On
Aug 21, 2023
A content creator shooting a video for likes, comments, and follows

About 200 years ago, during the Industrial Revolution, people earned their living by manufacturing stuff. 

By the 1950s, the world shifted from an industrial economy into a consumer economy. People performed services, bought goods, and freely traded. As trading became more globalized, people wanted more products from other places. 

Traditional media, in particular, featured the latest products from all over the world, encouraging people to spend more on consumer goods. However, as the internet continues to rise, the world is slowly undergoing another shift: from a consumer economy, we’re now moving into a creator economy.

What Does Creator Economy Mean?

For decades, traditional media controlled what we read, watch, and listen to. We read ads and stories handpicked by editors, watched scheduled TV programs and movies distributed by a handful of studios, and listened to radio slots. 

If you want to contribute to the “conversation,” your story must be “significant enough” to be featured. But because of the internet, people can now create their own content and distribute them to their audience without the need for traditional media companies. 

Just do a quick Google search and you’d find different types of content—podcasts, games, digital books, videos, etc.—about practically any kind of topic you can think of. Most importantly, a lot of them are owned, created, and distributed by ordinary people like us.

Content creators monetize their content by partnering with brands, sharing them on ad-sponsored platforms, and charging subscription fees among others. So, from trading goods and with the decentralization of media, people have found a unique way of earning a living—by creating content online. This is essentially what the creator economy is.

The Role of Social Media in The Creator Economy

It was social media that fueled the growth of the creator economy. Content creators use it to build their following, share their content, and use it as their ‘marketplace’ where they can earn a living.

Social platforms, on the other hand, pay content creators to continue making content. They connect creators directly to brands through programs such as YouTube BrandConnect, Meta Brand Collabs Manager, Twitter ArtHouse, and more.
They also continuously develop new tools such as LinkedIn’s Creator Mode and Twitter’s Super Follow to better support content creators and invest in the future of the creator economy.

A social media influencer creating content about healthy eating for her followers

How Content Creators Make Money on Social Media

Different social media platforms have allocated funds to pay their top content creators. 

For instance, Snapchat pays $1 million every day to popular short video creators. YouTube has set aside $100 million to pay short-term content creators and TikTok has a whopping initial investment of  $200 million for creators who use their platform.

But videos aren’t the only way people can earn money in this era of creator economy. The internet has carved out numerous paths for musicians, writers, and people with innovative ideas. 

So, how exactly does it work? What does it take to get paid for your content? 

How Creators Make Money on YouTube

How much YouTubers make depends on the following:

  • The number of views of your video;
  • The length of the video;
  • Ad quality;
  • Ad blockers; and
  • The number of clicks an ad receives

But in general, the average pay rate is around $18 per ad view. That means a YouTuber can earn $18 per 1,000 ad views which equates to $3 to $5 per 1,000 video views. That means a YouTube video with one million views can rake anywhere between $3,000 to $5,000.

How much does YouTube pay per subscriber? It’s a common misconception, but YouTube doesn’t pay based on the number of subscribers you have. That doesn’t mean, though, that subscribers aren’t valuable. They watch, comment, like, and share your videos with more people which means they’re integral to the number of views you’d get.

Being a YouTube content creator is pretty lucrative. But take note that you must also meet a set of criteria to get paid through the YouTube Partner Program.

How Creators Make Money on TikTok

There are three ways content creators earn money on TikTok

  1. TikTok Creator Fund

This program aims to pay content creators who use the platform and apply for the program. How much? Around $0.2 to  $0.4 cents per 1,000 video views. That means if your video goes viral and gets 10 million views, you could make $200 to $400 from your video.

Content creators will get paid based on a combination of these factors:

  • The number of views;
  • Authenticity of views;
  • Level of engagement; and
  • Amount of content being published

  Just like YouTube, you must meet certain requirements to get paid on this platform.

  1. TikTok Donations and Diamonds

Aside from the creator fund, TikTok content creators can also make money from their followers. Supporters can give their favourite TikTokers virtual gifts—specifically, diamonds—which creators can exchange for real money.

Each diamond is worth five cents, which means if you received 100 diamonds, you can cash it in for $50. However, you can only take half of what you earn because TikTok retains the remaining 50%. 

  1. TikTok Creator Marketplace

TikTok Creator Marketplace is where content creators can sell their content, connect with other talented creators, and connect with brands for affiliate marketing. 

A woman shoots a make-up tutorial video

Content is The Creator Economy’s Currency

Content is the creator economy’s currency. How much of it do you have?

Whether it’s YouTube, TikTok, or any social media platform, you need great content to trend. If you want to collaborate with top content creators, get in touch with us today!

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Author

  • Kaela Johnson

    Kaela Johnson is a Client Success Manager who specializes in executing influencer campaign strategies for global brands. Outside of the office, she has a love for dance and gymnastics, and considers herself to be a pop culture enthusiast and meme master.

    View all posts
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Author

  • Kaela Johnson

    Kaela Johnson is a Client Success Manager who specializes in executing influencer campaign strategies for global brands. Outside of the office, she has a love for dance and gymnastics, and considers herself to be a pop culture enthusiast and meme master.

    View all posts


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