The Way Overblown Creator Economy

After years of hype, the Creator Economy is slamming into reality. Influencer programs are shuttering. Investment is drying up. And worsening economic conditions are threatening to crush creators and the tech infrastructure behind them.

While today’s economic downturn is causing broad pain, the creator economy is suffering in particular because its middle class hasn’t yet emerged. Online content creation is still mostly viable for the very top echelon of online creators only. And when mid-sized creators can’t make it, the VC-funded platforms meant to serve them can’t scale. So it’ll likely be a while before “link-in-my-bio” startups raise at $1.3 billion valuations again.

Tough Times for Content Creators

“People only have time to consume so much. So you have to be the best, or in the top few, in any given space,” said Austin Rief, chief executive officer at Morning Brew. “It’s really tough to be the 37th best finance creator.”

Most businesses building tools for creators will go under this year, Rief predicted, noting that the industry is smaller than many hoped for and that 99% of the value still goes to the top .1% of creators. Many within the industry have long held similar views but kept them to themselves as VC dollars poured in. Now, amid a downturn, it’s apparent that the status quo won’t hold.

“Trying to siphon off 5% fees from an industry where even the top 1% are only mere multimillionaires was never going to work,” said one top 1% content creator. “How are you going to reach a billion? Your addressable market itself is not a billion-dollar industry.”

Related Article: How Are Brands Investing in the Virtual Economy?

Predictions for Creator Economy Now Seem Fanciful

Industry predictions put the total value of the Creator Economy — a fancy term for the online content creator business — at $104.2 billion. The number now seems fanciful, especially since it includes money invested in startups that may never return their investments. 

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