The creator movement, a story of unbundling

The creator movement is the result of no-code tools and platforms that allow creators to build their own businesses and go direct-to-consumer.

The creator movement, a story of unbundling

Apple’s announcement of premium subscriptions for podcasts is just one of many recent changes that allow creators to go direct-to-consumer (DTC) and build their own businesses. Just like Shopify, Substack or Convertkit allow you to sell products and content directly to your customers, you can now monetize audio content beyond ads. It’s an exciting time for content creators.

The creator movement or passion economy is so massive that the big internet platforms are now launching new creator features. But let’s take a step back and look at what’s actually happening.

The great creator unbundling

An interesting question is “Where are all these creators coming from?” Many of them are not coming out of nowhere; they have been working for companies as writers, video editors, graphic editors, or social media managers.

The old contract between creators and companies looked something like “I pay you a recurring salary plus benefits, and you create content for me.” Journalists who write for publishers are the best example. Maybe the company would teach you more skills and connect you with a network of peers. That’s it, but there were many good reasons to take that contract and there was no real alternative!

But now, creators can distribute and monetize their content directly. A recent piece in the New York Times points out how much money journalists can make by unbundling from publishers and going DTC. In this case, it’s the Substack Pro program is like a book writing advance:

Danny Lavery had just agreed to a two-year, $430,000 contract with the newsletter platform Substack when I met him for coffee last week in Brooklyn, and he was deciding what to do with the money.Emphasis mine, source:

That’s way more than a writer could make writing for a company. Granted, we’re taking about the cream of the crop here, but if that’s not a strong sign, then I don’t know what is. And that’s exactly what’s happening on the creator side. People realize they can sell their talents and crafts directly, and for much more money. None of that would be possible without the right tools.

Substack unbundles journalists from newspapers, which leaves newspapers in a dangerous vacuum because well-known writers are important from a brand and business perspective. And yet, those are the people most likely to succeed with their own platform. Pair this trend with shrinking ad returns and higher dependencies on aggregators like Google, and you get a dangerous cocktail. Last week, I wrote about the DailyMail lawsuit, a strong symbol for the second-order consequences of unbundling.

But it’s not just journalists and writers. Composers and musical artists now have a bigger opportunity than ever before to make a living. Samuel Kim, a talented soundtrack (re-)composer offers premium subscriptions through Youtube and Patreon.

Youtube's subscription feature
Youtube’s subscription feature

Justin Kan, founder of Twitch, went from startup entrepreneur to podcast creator. James Beshara, founder of Tilt, started a podcast and now uses it as distribution vehicle for his new projects he’s involved in.

ConvertKit added several creator features over the last two years. Other than Substack, which allows writers to charge for newsletters and podcasts, ConvertKit allows writers to sell ebooks, presets, music, and more.

Intellifluence connects influencers of all platforms with companies that need reach. Cameo allows influences and celebrities to sell social capital. Kajabi and Gumroad provide a full-stack platform for creators.

Part of why it’s so easy for many creators to go DTC now is that they don’t need technical expertise to build a business. Whereas you could use Stripe, Memberful, or Patreon to monetize for years, it still took a bit of technical knowledge to set it up. Now, anybody can build a full-stack business.

The re-bundling trap

The creator economy is picking up so much steam right now for two reasons.

Number one is that distribution and monetization are melting together like cheese on a yummy sandwich. You were able to monetize your content for quite a while but still had to take care of acquisition. That’s something the big platforms have realized.

Youtube's creator academy focuses on discovery and monetization
Youtube’s creator academy focuses on discovery and monetization

Twitter acquired Revue, a newsletter platform, and announced Super Follows and communities. Youtube added subscription and merchandize sales features. Facebook announced a new newsletter feature and Audio Rooms (think: Clubhouse). Clubhouse itself is introducing payments for creators. Streamers can reach buyers through Amazon Live.

Discovery and distribution are key for creators. That’s why Gumroad, other than Kajabi, has a search function and category pages that aggregate creator material.

Notice how Apple does more than just allowing creators to monetize podcasts. They can soon curate content and build Youtube-like channels on Apple’s Podcast app:

Also next month, listeners will be able to discover channels, which are groups of shows curated by creators with unique titles, descriptions, and artwork. Just as they can with shows, listeners will be able to browse free channels, which make it easy to find more shows from their favorite creators, as well as paid channels and channels that provide additional benefits for subscribers.source:

How many people will pay for podcasts, and how much remains to be seen.

However, as big platforms provide distribution and monetization, they also aggregate creators. Aggregation has the benefit of easy access to distribution but the disadvantage for creators of being just one of many, a commodity. Creators need to build their own platforms while leveraging the distribution of big platforms.

Number two is that in the process, creators become platforms themselves. The idea of influencer marketing is simply that companies pay to tap into the influencer’s audience. They become integrators like Disney or the New York Times. Only those that understand these two dynamics will succeed over time.

What does that mean for content marketing?

When the traditional newspaper industry collapsed around 2008, Many journalists went from newspapers into content marketing. Now they might go DTC. For companies that use content to acquire customers, the creator movement has several second and third-order effects.

If creators can monetize their content directly instead of getting paid to do it for companies, it might get harder to find good creators, and the price for content might go up. As a result, more companies might collaborate with creators in the context of influencer marketing in a freelancer or project-based relationship.

The creator trend might also lead to fewer commodity content. When companies compete for distribution on platforms like Google, they enter a zero-search game that only a few can win. As a result, many companies go after the same juicy but competitive keywords or topics. But if they don’t understand how to win that battle and build content moats with content-market fit, they produce a lot of mediocre/commodity content in the process. When content creators stand on their own, they might seek out spaces they can easier compete in without middlemen.

Lastly, the creator movement might lead to more freelancers and fewer full-time employed content marketers because more creators go DTC.