Is the Creator Economy cratering?

Creator economy platforms that raised millions are pivoting and struggling to raise more money.

A few thoughts:
The elephant in the room:

Almost every creator economy platform is struggling to scale.

They almost all built their business model around lowering the barrier to help more people become creators.

more creators = more subscribers = more revenue.
But this hasn't quite panned out.

Maven, the ed-tech startup that raised $25M from Andreessen Horowitz, announced a significant business pivot this week.

They’re moving their platform towards industry experts and away from influencers.
“We had the hypothesis that a creator with a big audience will have a great course and be able to fill it, and we were surprised that this hypothesis was wrong,” - Wes Kao, Co-Founder of Maven
The foundational issue of the creator economy is that most creators aren’t great at what they do.

It’s a power law game.

Check out the far right column:
It’s simply impossible to not be dependent on your top creators to drive revenue in the industry, even if you’re YouTube.

Mr. Beast's massive success is a good example of this. He reportedly makes $54 million in revenue from YouTube, which is great for him and for YouTube.
He gained massive attention from his videos, then built a lasting connection with millions of fans

That connection is so strong that he's started several successful businesses using his name

Many assumed that this model was repeatable on a smaller scale with smaller creators
So where did creator economy platforms go wrong?

The assumed attention = intention

But those two are very different
• Attention is when your audience takes notice of you

• Intention is when your audience is willing to take action for you
Attention is cheap. It’s easy to grab. Even easier to fake. The impact: revenue doesn’t scale.

Intention is hard to gain. It takes consistency and purpose. It takes connection with your audience. The impact: revenue has a higher ceiling than you can imagine.
These platforms assumed that the attention of influencers could drive the intention of the audience to buy a course, a subscription, etc.

The result isn’t pretty:
• Substack did $9M in revenue in 2021 with $85M raised in funds.

• Maven did $9M in GMV over 18 months

• Patreon just laid off 17% of its staff

• Cameo’s consumer business has stalled

• Twitter’s Super Follow feature made a whopping $6K in its first two weeks
So who's doing it right?

OnlyFans is probably the most successful creator economy platform

They are the only creator economy “take platform” that is growing rapidly.

Their free cashflow grew from $150M in 2020 to $1.2B in 2022 with GMV growing from $2.2B to $12.5B. Amazing.

OnlyFans looked at foundational issues for the Creators on their platform. They didn’t only focus on monetization optimization for creators; they solved real security problems that their adult content creators were experiencing.
They required social verification, license upload, and strict rules around meeting in person. By increasing security, they enabled new ways to connect with their audience

This allowed Creators to communicate with their audience in a safe way that allowed them to build connection
To answer the original question: No, the creator economy is not crashing. It’s expanding.

The problem is many platforms chose the wrong problem to solve.

Excel jockeys were thinking “if we have X amount of subs and we make it easy to sell Y product then we can easily make $X"
As Maven realized, that formula isn’t so easy to bring to life.

You need audiences with real intention. You can’t assume everyone has a 1,000 true fans, you have to help them get to a 1,000 true fans.

Let’s say goodbye to the “Attention Economy” and hello “Intention Economy"
Thanks for reading. I cover the creator economy and the business of media in my newsletter, Perpetual. Give it a read if you liked this thread:
Fun fact: PewDiePie has 7m more subscribers than Mr. Beast, but only makes 8% of his income.

Further proof that follower count isn't everything
If if you’re an exec @ a media or creator economy company DM about my Summit coming up.

The theme is using content to drive commerce.

25 seats is max capacity with workshops from @bentwitr (Mr. Beast mgmt and ops), @MatthewBerryTMR, @mrsharma, and more.

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Interesting thread on creator economy- how much does audience matter to drive business vs making quality content per platform. Starting to see saturation. Also clever word play - creator cratering!