Understanding the Creator Economy and How it Relates to Influencers

Graduate from high school, go to college, get a job in a soulless office complex, and work it...  forever. It’s the route that seems to have been hammered into our brains since we were old enough to hold crayons and be asked, “what do you want to be when you grow up?”  

If you can’t imagine spending your life working long hours in a grayscale cubicle, you’re not alone. Thankfully, there are tons of pathways open to a new generation of vibrant creatives.

For an increasing number of Millennials and members of Gen Z, the creator economy—that worldwide network of  individuals making money off their online followings—has become a way more exciting road than the traditional career of our parents. 

If you want a life, not just a job, that allows you to follow your passions, make your own hours, and secure that bag, then the creator economy can give you all of that. Let’s talk about exactly how the creator economy works. 

What is the Creator Economy? 

The creator economy refers to the network of social media influencers who have made money off of their online activity in various ways. 

The long short: It’s the world of people making revenue through creating content. It’s also called “the passion economy.”

But who are these creators, and how do they make money on social media? 

Influencers are:

  • Celebrities
  • Content creators
  • Content curators
  • Bloggers and video bloggers
  • Videographers 

At last count, these influencers numbered over 50 million worldwide. They work across all the major social media apps, networks, and blogging platforms, like:

  • Instagram
  • YouTube
  • Twitter
  • TikTok
  • Facebook
  • Snapchat
  • Substack
  • Twitch
  • OnlyFans

So now we have the who (influencers), the where (social media), but what about the how? Influencers make money in the creator economy by: 

  • Posting sponsored content from companies and brands to their social media
  • Paid subscriptions by fans who want to see more content than what’s readily available on free platforms
  • Affiliate partnerships
  • Tipping
  • Advertising revenue from platforms 
  • Sales from merchandise or digital content
  • Live and virtual events
  • VIP meetups
  • Fan clubs

And the list goes on and on. Part of what makes the creator economy so interesting is that there are so many different ways to carve your own path and make money every step of the way.

The Creator Economy By the Numbers  

For an employment market that’s barely a decade old, the creator community has seen dramatic growth.

In 2021, the creator economy received over a staggering 2 billion dollars in funding, making it the fastest-growing type of small business out there.1  

This success has been powered in part by innovations in tech. Which makes sense if you think about it—when it’s easier to make connections, it’s easier to expand your reach. 

But it’s also the result of a turning social tide. These days, we’re seeing younger generations reject some of the defining ideas about work that previous generations took for granted.

Taking a cue from Millennials and the gig economy of the early 2000’s, Gen Z is blazing a path of self-fulfillment where the only true dream job is the one where you’re your own boss. 

Yup—millions of young online creators are giving a collective “Okay Boomer” to outdated ideas of how to make a living. 

Let’s look at some of the numbers: 

  • 50 million — As we mentioned earlier, that’s the number of active creators working in the creator economy.

  • 46.7 million – That’s the number of active creators known as “amateur creators,” or those who make content on a part-time basis.

  • 2 million – Represents the batch of “professional creators” who make content full-time. 

  • There are professional and amateur creators working on almost every platform. But different platforms do attract different influencers. 

    Among amateur creators, Instagram is the most popular, hosting 30 million amateur creators. Meantime, more than half of all professional creators use YouTube as their primary network. 

    Young fashionable afro american in bright yellow winter jacket

    How the Creator Economy Works

    Even if you’ve been thinking about trying your hand at influencing, the creator economy can seem bigger and more confusing than it actually is.

    It’s a corner of the economy that changes as fast as it grows, but knowing a little about how it started and where it is now can help make it less of a mystery.

    Since its start in the late 2000s, the creator economy has been characterized by three distinct parts or overlapping phases. Those who work in the industry call those phases “layers.” Taken together, these layers constitute the creator economy.2 Let’s take a look at how they work. 

    First Layer: Media Platforms  

    From TikTok to Instagram to YouTube, social media platforms make it possible for creators to get their content in front of an audience. 

    These platforms shell out big money to develop and fine-tune the complex algorithms they use for curation and recommendation. These algorithms remain crucial for linking consumers with creators whose interests and tastes are in sync with their own.

    Think of it kind of like a dating app, helping companies and influencers connect with their perfect matches—customers who will fall in love with their product, services, and content. 

    The media platforms we’re talking about here represent all the different formats that social media can take, like:

    • Video/streaming platforms like TikTok, YouTube, Instagram Live, and OnlyFans
    • Visual/photography-based platforms like Instagram, Snapchat, and Pinterest
    • Writing platforms like Substack, Twitter, and Medium
    • Music-based platforms like Spotify, Soundcloud, and Apple Music

    But of course, platforms aren’t providing these services out of the kindness of their hearts. 

    Platforms need creators to make sure people keep using their apps and companies keep paying them to advertise. 

    Understandably, this can complicate the relationship between creators and the platforms whose bottom-line interests might not always align. Which leads us to the second layer.

    Second Layer: The Monetization of Influencer Reach

    Whether they’re giving tips on building muscle or cooking up the perfect cake pops, content creators use social media platforms to build authentic relationships with their audience. That kind of trust creates a reputation as reliable experts. 

    Soon, brands and businesses began to realize the tremendous potential that partnering with these creators offered for marketing and selling their own products—boom. Social media monetization was born.

    While some platforms played a more direct role in determining how creators would be compensated by paying them revenue shares from ad sales, many creators were left to figure out how to make money off of their content on their own. 

    In response to this, new companies sprang up as intermediaries between influencers and brands. Examples of these kinds of companies are:

    • Influencer agencies 
    • Sponsorship marketplaces 
    • Online talent representation companies 

    But brand partnerships and paid sponsorships can pose their own obstacles for content creators. Under the best of circumstances, creators form relationships with brands that feel organic to their own aesthetic. But even then, paid posts can harm the trust an influencer builds with their audience. 

    Group of young, fashionable girls standing on the stairs outside

    Third Layer: Content Creators as Businesses 

    These days, savvy content creators are becoming independent businesses in their own rights. The days of paid posts are giving way to business models that give influencers more control of what they create, when they create it, and who they create it for.

    This freedom allows influencers to create customized content that speaks directly to the audiences they’ve worked so hard to build, instead of pandering to a mainstream audience at the expense of originality, creativity, and consumer trust. 

    It also opened the door to new ways for creators to make money online. Increasingly, creators are taking their audiences off-platform and monetizing a range of products and services that can operate outside of the constraints of the platforms—things like:

    • Coaching 
    • Consulting 
    • Speaking engagements
    • Fan engagement 
    • Virtual events

    When content creators act as their own business, the need to turn to larger brands for sponsorship is obliterated. Successful creators no longer have to risk alienating their true fan base by partnering with brands they don’t fully believe in. For influencers, this means building long-lasting relationships with consumers.

    Let EMCEE Take You To the Next Level

    With so many influencers and would-be creators out there, imagining making your leap into the creator economy can be intimidating. It’s a thrilling and thriving sector, but for many, it’s shrouded in mystery. 

    That’s why EMCEE is committed to making the process more transparent—by acting as a go-between for content creators and the brands who can mutually benefit from a partnership with them. 

    When you join EMCEE as an influencer, you get access to our cutting-edge platform that takes you from an online brand to full-fledged retailer. 

    As soon as your application is accepted, you can start adding products to your virtual storefront to sell directly to your followers. Sell the best of the brands you love and/or add your own items, from apparel and accessories to Q&A sessions or virtual events. 

    And because we work directly with brands, you’re guaranteed to earn top commission on every sale. 

    No matter your niche or your follower count, EMCEE can help take your personal brand to the next level. We make it easier than ever for content creators big and small to operate multi-brand online shops by subtracting all the hassle of running an online business.


    Sources: 

    1. CBInsights. The Creator Economy Explained. https://www.cbinsights.com/research/report/what-is-the-creator-economy/
    2. MarTech Alliance. The What, Why, and How of the Creator Economy. https://www.martechalliance.com/stories/the-what-why-and-how-of-the-creator-economy
    3. SignalFire. Signal Fire’s Creator Economy Market Map. https://signalfire.com/blog/creator-economy/