Platforms, Not Creators, Reap Financial Rewards of Creator Economy

The creator economy is apparently leaving a bulk of creators out in the cold.

In an opinion piece published Saturday (April 22) by the Financial Times, Leo Lewis argues there is a “stunning concentration of revenues” on a small number of Gen Z creators, and a “yawning gap where a ‘middle class’ of fairly decent income might ideally be.”

He points to figures from Goldman Sachs that estimate a global creator population of 50 million, 96% of whom are “amateurs” earning relatively little, with the remaining “professionals” taking in upwards of $100,000 per year.

Citi, meanwhile, says that 90% of Substack revenues come from under 10% of writers, a ratio that also applies to creators on Twitch and YouTube.

While this is good news for platform providers — as the idea of superstar creators reaping huge incomes continues to entice new would-be creators — it’s a different story for the creators themselves, Lewis writes.

“While alternative revenue models may alter the creator economy again in the coming years, the game is nowhere near as democratic as it seems.”

This is happening at a time when more than a third of Americans in Gen Z are working at some sort of side gig, according to research by PYMNTS and LendingClub in “New Reality Check: The Paycheck-to-Paycheck Report.”

These jobs, per the report, include informal tasks and gig work, as well as selling artisan and used products. In many cases, these alternative income sources are accessed via online marketplaces or by using mobile apps.

As noted here last week, it may be this section of Gen Z that merchants, banks and others seeking to do business with this age cohort could cater to first.

“If financial stability is this generation’s North Star, the cohort may likely be seeking financial advice from banks or FinTechs to best manage their money,” PYMNTS wrote. “This sort of advice, as well as related innovative tools, have demonstrated to be successful in retaining customer loyalty.”

One recent example of FinTechs targeting this consumer need came from Klarna working with the budgeting app Buddy aimed at the Gen Z demographic. The offering lets users check real-time account balances, track spending and set up payment reminders on one platform.

“Generation Z overall is marked by an openness to digital innovations and high adoption of those they find beneficial to integrate into their daily lives, such as health-related wearables,” PYMNTS wrote.

“The FinTech or other firm that can appeal successfully to both Gen Z’s openness to digital innovation and drive for success may pick up customers — for the long haul.”