YouTuber MrBeast has 71.6 million subscribers and is rumored to make $24 million a year. That’s pretty jaw-dropping, to be sure. But I’m more impressed by another figure: two million, the number of professional online creators who are following their dreams and making enough of a living to be producing content full-time. And that’s only scratching the surface of the greater opportunity here: In total, more than 50 million people overall are estimated to participate in the creator economy.
Not long ago, making money as an online creator was considered the exclusive domain of popular celebrities or influencers. In fact, a widely cited 2020 Harvard Business Review article by Li Jin titled, “The Creator Economy Needs a Middle Class,” pointed out “the top creators are massively successful, while long-tail creators are barely getting by.” On Spotify, 90 percent of royalties are made by less than 2 percent of the site’s artists, Jin notes. On Patreon, meanwhile, only 2 percent of creators were able to earn minimum wage.
But as new platforms make new business models and means of ownership accessible to everyone, we’re already seeing a new class of creator emerge that’s more SMB than celebrity. Everyday entrepreneurs are finding new opportunities to top up their income, pursue their passions and build their own businesses, with lower barriers to entry and a higher likelihood of success than before.
In other words, a new creator middle class is emerging. Here’s why we’re seeing the rise of this new tier of creators—and how to make sure they stick around and thrive.
Everyday Creators, Real Income
Even as the middle class in North America is shrinking, a boom in mid-level digital creators earning income is in motion. I see it every day. On our platform alone, more than 50,000 active course creators from 165 countries are earning hundreds of millions in revenue each year.
The entrepreneurs we serve fall into several discrete categories. Some are side hustlers just seeking to augment an existing income. Others are full-time creators relying on their courses, communities, membership sites and other digital products as their primary source of revenue. Still others are looking to scale their creations into larger enterprises. They are, by and large, not celebrities or individuals with outsized social media followings. And what’s inspiring to me is that so many of these creators are matching effort to reward—they’re finding ways to be fairly compensated for their time and energy, however much or little they dedicate.
The creators—and what they offer—run the gamut. There’s occupational therapist Jessica McMurdie of Play it Forward and Sydney Montgomery, who offers law school admission consulting. James Testani is teaching guitar, while K. Michael Russel is coaching aspiring comics artists and Jonathan Levi is sharing his speed reading wisdom. I even have my own online course—an LSAT prep series called Alpha Score—that generates a reliable income.
More encouraging still is that we’ve actually seen the number of creators surge since the pandemic started. At Thinkific, we experienced a 221 percent surge in course creation during COVID’s early days. Whether because of shifts in employment or discontent with the 9-to-5 that the pandemic put into sharp relief, we’ve witnessed a distinct influx of people earning a living in the creator economy.
A closer look shows us that entering this creator middle class isn’t an accident. It depends not only on creating great content, but also where you create it…and for whom.
It’s All About the Monetization Model
In her 2020 article, Li Jin makes an important observation about where everyday creators can earn money: “Sales of high-value products, such as courses and e-books, can help creators with modest audiences to thrive.”
To me, this touches on a critical dichotomy in the creator economy: direct vs. indirect payment. Familiar creator websites like YouTube operate largely on an indirect payment model. Creators generally aren’t compensated by the users who watch their content. Rather, they receive a share of revenue from the ads that YouTube runs during their videos. This varies; some sources indicate a YouTuber can earn $3 to $5 per 1,000 video views.
Financial success on these kinds of websites will always be limited to the select few. Their algorithms ensure it works that way, driving views to the top creators. If you’re extremely lucky or extremely savvy at gaming the algorithm, like MrBeast—you’ll rise to the top and generate the millions of views needed to earn a living. But the odds are slim. A Washington Post article noted that the top 3 percent of YouTube channels account for 90 percent of all views.
However, there’s an entirely different way to earn as a creator—direct payment. We see it with the growth of sites like Substack and Twitch, where creators are compensated directly by users through paid subscriptions. Tipping is another form of direct payment with growing traction; Twitter just added a “tip jar,” while TikTok allows users to give each other digital gifts that can be converted to cash. The upside here is that the lion’s share of revenue generated from content goes directly back to the creator.
The Power of Owning Your Platform
Yet, even within direct payment sites like Twitch or Substack, algorithms often still drive users toward high-performing content. This acts as a positive feedback loop, where a few creators generate the overwhelming majority of views and others languish in relative obscurity. Meanwhile, these sites can dictate who controls access to the audience and what commissions are charged, leaving creators vulnerable. For all these reasons, questions like, “Can streaming pay?” continue to swirl.
That’s why, to me, the most viable model is one where creators are freed entirely from reliance on a third-party site, marketplace or brand. With Shopify, WordPress or my own platform Thinkific, for example, creators pay a fee for software or functionality. But they retain ownership over their site, their content and their audience—and are not beholden to shifting algorithms or onerous commission structures.
Ultimately, this concept of ownership lies at the heart of building a flourishing creator middle class. To me, there are four critical principles that serve to empower creators and unleash earning potential:
- The creator owns the business—the website, the brand, the data. This means you control the terms, own the future value of the business and could even sell it. When someone refers a friend to the site, it’s your site, not a marketplace full of competing content.
- The creator owns the direct customer relationship. This allows you to retain that customer over time, building loyalty, generating new customer referrals, even charging recurring subscriptions and selling future products to them.
- The creator owns the product being sold, or they receive the majority of revenue from the sale of that product.
- This direct sale approach translates, in turn, to more revenue per user. Because you’re not taking just a tiny cut (as in ad-based models), you need fewer customers overall to sustain a decent income.
The combined impact of these factors is that you can build a successful business generating meaningful revenue without the need for millions of fans, plus you own it and have more control over the growth of it in the future. You could even sell it one day.
Supercharging a Creator Middle Class
I’m hopeful that this is just the beginning. A creator middle class (just like any middle class) is vital for a healthy economy and society. Direct payment models and tools that put creators in the driver’s seat are contributing in real ways to the growth of this class. At the same time, it’s encouraging to see forward-looking steps being taken by outside organizations and tech companies themselves to secure a healthy, growing creator middle class. As the creator economy grows, so do training and mentorship programs, support networks and even investment funds specifically for burgeoning creators.
Ultimately, the creator economy can be a vehicle for more equitable income distribution and, just maybe, a fairer world. Creators wield more power on platforms than gig workers, thanks to their unique services and individuality. As Li Jin points out: “The passion economy is rooted in and celebrates the notion of creator leverage.” A growing cohort of creators is using that leverage to take the power—and the money—back. It’s about time.