How the pandemic supercharged the creator economy in 2021
And why everyone wants a slice.
The multibillion dollar industry of game streamers, beauty vloggers, podcast producers, fitness influencers, newsletter writers and other social media stars who make up the “creator economy,” began long before 2021. Yet 2021 saw more platforms throw more money and resources at independent content creators than ever before.
This year, companies that had previously shown little interest in courting “influencers” or building relationships with creators began to invest in building monetization tools for them. And even more established, creator-friendly companies significantly ramped up their investments with new funds and tools.
Twitter, which had previously only ever had a single monetization feature — a video centric tool used by publishers — opted to reorient its entire platform around creators. It built Super Follows, a Patreon-esque subscription service for influencers. It launched Ticketed Spaces, so people could make money from its burgeoning live audio feature. It launched in-app tripping, and started building a newsletter platform.
Snapchat, which at one time actively shunned the idea of influencers, just announced that it had funneled more than $250 million to creators via its Spotlight feature, which launched at the end of 2020. Some of the app’s biggest stars are even getting their own shows in Snapchat Discover.
Facebook also took a renewed interest in the influencers and content creators who had long asked for more opportunities from the platform. Mark Zuckerberg has repeatedly labeled creators as one of the company's top priorities and announced a plan to invest $1 billion into tools for them by the end of 2022. Since then, Facebook and Instagram have launched a dizzying number of creator-focused updates and monetization features.
Platforms not traditionally associated with influencers also began throwing money at creators and monetization features. Pinterest launched a $500,000 creator fund and built its first monetization tools. LinkedIn — yes, that LinkedIn — announced a $25 million fund. Clubhouse added tipping. Tumblr, meanwhile, launched a subscription service for its bloggers.
Even YouTube, the most established platform for creators to make money, identified “growing the creator economy” as its top 2021 priority. It launched an all-new $100 million fund just for Shorts, its TikTok-like feature. TikTok itself, which started a $200 million fund in 2020, also launched new monetization features.
With all that money flowing in, it’s no surprise that the number of individual creators also boomed. One report from payments company Stripe, which powers payments for dozens of influencer platforms, found that the number of creators was up 48 percent in 2021, compared with 2020. And that’s just a “fraction” of the total ecosystem, according to the company.
“If the recent exponential growth of the creator economy keeps up, these 50 platforms could be supporting more than 15.5 million creators in five years,” the company wrote.
Growth wasn’t limited just to the major platforms, either. Startups catering to content makers and their needs also surged, with more than $3.7 billion in funding going toward “startups focused on creators,” according to a report in The Information.
One of the main drivers of this surge in activity was the pandemic. While creators were making money long before the pandemic, the industry was almost perfectly primed to absorb many of the changes brought on by it.
“I think the pandemic definitely turbocharged the creator economy through both necessity and through choice,” Li Jin, founder of Atelier Ventures, a venture capital firm that invests in the creator economy, said in an interview earlier this year.
“Necessity meaning a lot of people were left without offline alternatives for work and income and had to turn to online platforms in order to continue their creative careers. And choice in the sense that obviously we had a lot of free time during the pandemic where we were just kind of stuck at home. I think a lot of people took that time and they started creating content.”
At the same time, the pandemic also seems to have shifted the way that many people think about work itself. While this year was full of hand-wringing about labor shortages and whether or not people want to go back to work, it’s not difficult to understand why some, particularly younger people, might opt for a different path. Zuckerberg described the shift as “people being able to make a living by expressing their creativity and by doing things they want to do, rather than things they have to.” Creators, he has said, deserve to be “rewarded” for their work,
But as Jin and others have pointed out, major platforms aren’t suddenly embracing creators just because they care about helping them create sustainable independent businesses. The economics are ultimately weighted in their favor as well.
Creators are responsible for a significant amount of engagement on their platforms of choice. If enough of an app’s biggest stars leave, they could take large chunks of users with them. Revenue from creators could also one day help Facebook generate income beyond advertising. Zuckerberg has pledged not to take a cut of their earnings until 2023, but even a relatively small commission could eventually add up to a significant amount. Likewise, Twitter has said it plans to take a 20 percent cut of Super Follow subscriptions from its highest-earning creators, though it could still be some time before the feature makes serious cash for anyone.
Creators are also crucial to drawing in new users and keeping platforms’ existing ones entertained. For Facebook, they could help the company avoid, or at least dampen, the “existential threat” of declining teen users. Snapchat has touted Spotlight as a key source of growth. Even LinkedIn has said creators can help their users get “better at what they do.”
Ultimately, though, it’s the platforms that will benefit most from creators, according to Jin. “Nothing is done purely altruistically,” she said. “It's to strengthen the company and their profitability.”
