What is the Creator Economy: Characteristics, Participants, Impacts

What is the Creator Economy: Characteristics, Participants, Impacts

The creator economy is an emerging economic activity and a subset within the realm of the greater economic system that has emerged from the rise of digital information and the subsequent widespread popularity of Web 2.0 technology.

Specific Web 2.0 applications such as blogging, social media, and other media-sharing websites and apps have promoted online participatory culture and enabled user-generated content while upholding accessibility and ease of use.

Nevertheless, because of the inclusiveness of Web 2.0 applications, they have created a creator culture that has allowed an average individual to transition from being a simple content consumer to an actual content producer or creator at a minimal cost.

Characteristics of the Creator Economy

A Brief Look Into History

It is worth mentioning that technological advancements often result in the emergence of novel economic activities and subsets of an economic system. For example, the invention of farming during ancient times created the agriculture economy while developments in manufacturing allowed societies to transition to the industrial economy beginning in the 1700s.

The impacts of farming and manufacturing capabilities also enabled several societies to diversify or specialize in the so-called service economy that also became the foundation of other economic activities with the help of specific technological developments.

For example, the emergence of the Information Age in the mid-20th century was at the core of the rise of the information economy. But the invention and subsequent widespread utilization of computers and the internet resulted in the emergence of the Digital Information Age beginning in the 1980s and further expanding and advancing in the mid-1990s.

The Digital Information Age not only supplemented the information economy but also created newer economic activities such as the digital economy, the gig economy or the freelancer economy, as well as the emergent virtual economy.

Definition and Characteristics

It is important to emphasize the fact that the explosion of the online creator culture due to the capabilities and possibilities of the modern Digital Information Age eventually paved the way for the rise of the creator economy.

To understand better what this particular economic activity is, it is important to know the products it produces. Note that the farm produces and livestock are the main products of the agricultural economy while both commercial and mass-produced or consumer goods are the output derived from the industrial economy.

In the information economy, the outputs are tangible goods such as print collaterals or intangible intellectual capital, especially if placed within the context of the knowledge economy. The service economy also produces intangible outputs.

On the other hand, within the specific subset of the creator economy, the products are the digital contents produced and shared online by individual or organizational content creators. It has some similarities with the digital economy because major transactions transpire in the digital realm and it takes advantage of online-enabled markets and existing industries.

It can also be considered a sub-category of the gig economy because most of its participants are self-employed individuals or freelancers who utilize digital platforms to earn money. Content creation is fundamentally the hallmark of the creator economy.

However, its participants are not simply creating and sharing content as a pastime. They have found ways to make money from their digital creations that are distributed online. Platforms such as Facebook, YouTube, Instagram, Twitter, and TikTok have become avenues that have allowed these participants to share their content and reach their target audience.

Participants of the Creator Economy

Of course, to understand further what the creator economy is, it is important to know its participants, as well as their specific roles and contributions. Take note of the following:

• Individual Content Creators: These include independent bloggers and vloggers such as freelance writers or product reviewers, online or social media influencers and internet celebrities, game streamers, digital artists and online performers, and content curators that utilize digital platforms to share their digital creations to their targeted audience and existing audience or followers.

• Auxiliary Individuals and Organizations: More established content creators need to produce higher quality content at shorter intervals. To do so, they also hire a team composed of graphics designers, videographers, video editors, copywriters, and social media managers, among others. Some would also hire the services of talent managers or agencies, as well as third-party business services providers.

• Brands and Marketers or Advertisers: Remember that digital content is the main product of the creator economy. Individual creators earn an income by monetizing their creations. They do so through partnerships with brands as part of their social media marketing and influencer marketing activities or by placing ads on their platforms through partnerships with online ad networks.

• Technology Companies: These include owners and developers of platforms such as Meta Platforms that own Facebook and Instagram and Google that owns and operates YouTube and the AdSense and Google Ad Exchange ad networks. They serve either as a provider of online-enabled mediums for content distribution or as a provider of services that help creators monetize their content.

• Online Users or the Audience: If digital content is the product and the content creators are the producers, the end-use consumers are the online users. The main goal of content creation and distribution is to reach as many people as possible and encourage them to engage both with these digital creations and the content creators. Reach and engagement levels are determinants of monetization potential.

The participants of the creator economy tell that although individual content creators are at the center of the economic activity because they are the main producers of its main product, other individuals and organizations also take part in the entire value-creation process.

It is also important to highlight the fact that both digital content and the content creators themselves are the main money-making products of this economic activity. Their followers or the overall population of online users are the consumers or end-users.

Economic value is derived from the capability of these creators or the digital contents they have created to reach and engage with the audience. The relationship between these creators and their audience provides marketing potential for brands and organizations.

Impacts of the Creator Economy

Positive Impacts and Benefits

Based on the aforementioned discussion of its characteristics and its participants, it cannot be denied that one of the impacts of the creator economy is that it has expanded the subfield of digital marketing and the specific subsets of social media marketing. Creators and their contents serve as an avenue for deploying marketing messages.

The rise of influencer marketing and its effectiveness is a testament to the positive impact of the creator economy. Creators have provided brands or organizations with another opportunity for promoting their products or causes or supplementing their existing marketing strategies.

However, several creators also earn by selling their creations directly to end-use consumers or by using themselves to promote their own brands or businesses such as merchandise and services. Some also earn through fundraising or by employing a subscription-based business model to provide their followers exclusive access to their contents.

Estimates made by The Influencer Marketing Factory in the third quarter of 2021 revealed that the total market size of the influencer marketing industry was USD 13.8 billion while the entirety of the creator economy was over USD 104.2 billion.

The most obvious macroeconomic benefit of the creator economy essentially centers on job creation. A number of individuals have become online influencers and digital content creators to augment their income. Some have gone full-time because of the higher earning potential while enjoying the advantages of telecommuting or remote work and work-from-home arrangements.

Of course, considering the diversity of its participants, startup marketing firms, brands or advertisers, providers of auxiliary or support services, and relevant technology companies have also benefitted from this economic activity.

Negative Impacts and Issues

But benefitting from the creator economy can be challenging. Creating and maintaining a social media presence or sharing digital content online will not guarantee success. A Harvard Business Review article published in 2020 and authored by Li Jin mentioned that there are only a few big winners and a lot of people are still hustling to get by and make a living.

The success stories of toy reviewer Ryan Kaji who became the highest-paid YouTuber in 2016 with a total income of USD 11 million and American dancer Charli D’Amelio who was worth USD 4 million in 2021 due to her exposure on TikTok are undeniably inspiring.

However, the fact remains that there is only a handful of them who are benefitting from the creator economy. Li Jin explained that the existing creator landscape more closely resembles the United States economy in which wealth is concentrated at the top. She explained that only 2 percent of creators on Patreon are making money within the federal minimum wage.

Singers who want to earn from their music by publishing on Spotify need 3.5 million streams per year to achieve the annual earnings for a full-time minimum-wage worker in the U.S. Note that a YouTube earns between USD 3.00 to 5.00 per 1000 video views.

Then there are the issues associated with the disadvantages of influencer marketing and the prevailing problems of social media. These include the so-called influencer fraud in which individuals resort to artificially inflating their number of followers and level of engagement, as well as the propagation of misinformation.

Several content creators have also become avenues for spreading political propaganda, conspiracy theories, discrimination toward specific groups, and all sorts of misinformation that have negative social and cultural implications. And they also earn from doing so.

Possible Future Implications

The pros and cons of the creator economy are irrefutable. There are indeed highs and lows to this emerging economic activity. Nonetheless, as noted in the report furnished by The Influencer Marketing Factory, its economic value and contributions are expected to grow and become more impactful with the expansion of the digital information age beyond Web 2.0.

A number of technologies are also compatible with the overall creator landscape. These include blockchain technology and its specific applications, including cryptocurrencies and digital asset creation and management through non-fungible tokens.

Note that the digital artwork “Everydays—The First 5000 Days” by Michael Joseph Winkelmann, also known as Beeple, was sold for USD 69.3 million. Several internet memes such as the infamous Disaster Girl meme, the Nyan Cat YouTube video, and the Doge image have also been tokenized through blockchain technology.

An increasing number of content creators are also seeking to monetize their digital creations by selling them in exchange for crypto-coins and crypto-tokens or by turning them into digital assets through the tokenization process using the principles of NFTs.

The future applications of the metaverse will also bring new opportunities for creating and sharing content. Note that the metaverse is an imagined always-on shared virtual environment that will allow users to create their virtual presence and interact in an immersive digital realm using relevant technologies such as virtual reality and augmented reality.

Its eventual introduction will bring forth an upgraded social networking experience characterized by the creation and distribution of immersive digital content. The creator economy can exist and flourish further in this immersive virtual environment.


  • Cunningham, S. and Baym, N. K. 2021. Creator Culture: An Introduction to Global Social Media Entertainment. NYU Press. ISBN: 978-1479879304
  • Dionisio, J. D. N., IW. G. Burns III, and Gilbert, R. 2013. “3D Virtual Worlds and the Metaverse.” In ACM Computing Surveys. 45(3): 1-38. Association for Computing Machinery. DOI: 1145/2480741.2480751
  • Jin, L. 2020. “The Creator Economy Needs a Middle Class.” Harvard Business Review. Available online
  • The Influencer Marketing Factory. 2021. Creator Economy Report. The Influencer Marketing Factory