Post-pandemic, publishers and creators need to lean into new revenue streams in a landscape that differs significantly from that before.
In an INMA digital strategies blog, Josep Nolla, who works in the strategy and business development department at Bolt in Stockholm, says many publishers pivoted to new revenue streams in the face of potentially fatal loss of advertising income. “In many cases, companies have come out of the chaos better equipped and suited to the modern, digital world.
But he says at the same time, a whole new economy burst onto the scene. “This new breed of creators may be looked upon as charlatans and opportunists by some purists in traditional publishing, but the reality is there are more similarities than differences between this exciting new economy and traditional publishing.”
The creator economy – defined as a software-facilitated economy that allows creators to earn revenue from their creations – has as its most popular tools, Twitch, Substack, OnlyFans, Lightricks, YouTube, Instagram, Collaction, Spotify, TikTok and Patreon.
And he says the definition fails to fully relay the ease with which the democratisation of technology has empowered almost any individual to turn their hobby or passion into a potential career. A reliable internet connection and the use of one or more of these tools have enabled an economy comprising more than 50 million creators and last year estimated to be worth US$20 billion.
“The success of this new creator economy is contagious,” he says. “A recent survey found that 29 per cent of American kids aspire to become YouTube stars, while only 11 per cent dream of growing up to become an astronaut.
“With so much momentum behind this movement, it is no surprise that the global value of the creator economy is expected to explode even further and be worth more than US$100 billion in 2022. It is likely to hit US$1 trillion in the not-too-distant future.”
Nolla says the creator economy has enabled people such as viral train-spotting sensation Francis Bourgeois to turn his Instagram account into a destination that boasts 1.5 million followers, helping him become the face of Gucci.
While the instinctive first reaction of those in traditional media may be to pour scorn on this new economy and dismiss most of its leading figures as flash-in-the-pan anomalies, it is more sensible to focus on the inherent similarities than focus on the differences. “It is here where open-minded publishers have the opportunity to see where they too, could capitalise on this new phenomenon,” he says.
“One of the greatest lessons from the pandemic for publishers was the already understood notion that diversification is essential. The overnight switching off of advertising dollars brought about by the pandemic reinforced the urgency of this understanding. It accelerated the shift to new sources of revenue streams, such as subscription models and the implementation of embedded e-commerce.
“The creator economy also skyrocketed in popularity as millions of people were forced to stay at home and find new ways to occupy their time. Many popular creators first gained fame by showcasing their unique skills or hobbies during this period. These people essentially diversified themselves by turning their passion and media skills into businesses.”
Nolla says the key crossover here is that savvy individuals turned their social media accounts into valuable commodities that they could convert into new revenue streams. The most tuned-in publishers also understood that becoming direct-to-consumer (D2C) destinations was the ideal transition to make when loyal readers had little option but to stay at home and turn to their most trusted online resources.
He says the biggest similarity between successful publishers and content creators is community. “Publishers are ultimately sustained by their readers, and creators only wield economic power because of the number of followers that make up their loyal and engaged community.
“In an increasingly digital-first world, enabling these loyal communities to shop and checkout directly via content – whether an online article or a video – is what the consumer wants.”
News publishers who produce high-quality content that delivers real value to their readers can now package it into embedded commerce with a seamless checkout that offers an enjoyable experience. Content creators can also deliver this same kind of experience via Instagram Shopping and the increasing variety of live-shopping options. A glimpse into the possibilities afforded to both creators and publishers in this realm can be seen in the huge success this form of embedded commerce has had in the last few years, particularly in China.
“In a sense, content creators and news publishers are two sides of the same coin,” says Nolla. “Each serves its own community, and they can learn from each other.
“The challenges faced by publishers and content creators are also similar. Even with strong communities in place, both parties may struggle to make money from e-commerce. Therefore, becoming transactional destinations increases their brand value and helps them monetise better.”