Creators can find more benefits by getting closer to their fans

Around the world, some 50 million people consider themselves "creators". That's a staggering number, but logical considering that 1 in 3 kids between the ages of 8 and 12 say they want to be a YouTuber when they grow up. Sensing a trend, a few years ago VCs started turning on their ring lights. Those lights began to fade earlier this year as many venture capital firms began to pull back and assess their strategy across all sectors, including the shrinking creator economy. 30% venture capital funding between Q4 2021 and Q1 2022.

On the surface, market momentum has always been good. You have high demand for creator content, a seemingly endless stream of young people hoping to become creators, a thriving tech ecosystem to support those creators, brands looking for genuine endorsements, and VCs willing to invest in the sector, although at a slower pace than in 2021 . The picture is less impressive if you take a closer look, with issues related to the friction that exists between fan demands, creator bandwidth, brand buying habits, and the fundamentals of how social media platforms work. . The economic downturn has accelerated this trend and is forcing creators to take stock of what really drives their business.

Creating dynamic content in hopes of hitting the lottery of virality is a daunting task. It takes a tremendous amount of time and resources to produce – something that has been increasingly hard to come by with less advertising dollars and venture capital money pouring into the industry. It's one of the reasons why the majority of YouTube creators report incomes that would put them below the poverty line in the United States, even without unprecedented inflation. Even if you're one of the small percentage of creators lucky enough to be included in social platforms' hand-picked monetization cohorts, you might not be better off. Even well-followed creators like Mr. Beast, a TikTok star with 34 million fans, reported earning less than $15,000 based on his inclusion in the TikTok Creator Fund. This equates to approximately $0.000015 per view or $0.00044 per fan.

Creators have always been both intrigued and frustrated by relatively low earnings, but it makes sense. Social platforms are built for maximum scale to support the massive data and advertising operations that make up the bulk of their revenue. They are algorithmically optimized to reward virality at the expense of community and meaningful interaction. Using the example of Mr. Beast, if he were to create a paid private community on Discord, Subtext (my company), Patreon, etc. and converting 0.05% of his fans to a $5.00/month subscription, he would earn $10M+ annually with less platform dependency, fewer content creation hurdles, and fewer dependence on changes in the advertising market.

Optimizing for community and relationships also hopefully improves life. If you ask most creators what they enjoy most about their work, it's almost always the interactions with their fans. Of course, most creators filed for bankruptcy a long time ago, and their feedback can be a vortex of support, bots, toxicity, envy, and demands for more content. Lost in the white noise are the authentic interactions and voices of true fans who, instead of being able to support the creators they love, also feel increasingly alienated.

In the face of economic headwinds, more and more creators are looking to refocus their efforts, and in doing so, they are realizing that the vanity metrics they have sought on social platforms do not provide a stable foundation on which to rely on for the long term. Instead, they are increasingly turning to more private platforms.

The reality is simple:

Fans want more live...