📺 the creator economy in 2030 and the growth of viewer-funded businesses

an interview with Chip Horne of YouTube

In this special edition, we hear from Chip Horne, the Global Head of Non-Ads Monetization Product Solutions at YouTube. Chip is an incredibly astute and insightful friend from my days at YouTube and we owe him a debt of gratitude for his reflections and thoughts below on the changing creator landscape. Note that all the views expressed below are his personal views, not those of the company.

The year is 2030 - what does the creator landscape look like? What are creators doing online?

This is an interesting time to try making 10-year predictions. It’s been widely acknowledged that COVID moved digital behaviors forward by several years in a matter of weeks, so the potential changes we could see by 2030 are immense! 

Even without COVID, the creator economy is evolving at such a rate that I’m sure in 2030 we’ll look back on the current landscape as very raw and rudimentary. Whole categories of content, user experience, business model - even sub-economies within the wider ecosystem - will emerge that haven’t been conceived of yet.

Who will we even consider to be creators? I see two trends having an impact here. First, the line between mainstream and digital talent will fade away: not so much through creators ‘breaking through’ into the mainstream (a narrative that already feels out-of-date), as through the opposite - talent that has (or would have) found an audience through traditional media realizing that they can reach the same audience, have more creative autonomy and move faster by thinking and acting like creators. Second, as it gets easier to make and monetize quality content, being a creator becomes a more and more compelling side-bet for all sorts of individuals and companies with valuable perspectives and expertise to share - from farmers to financial analysts.

These two trends will up-level the whole ecosystem. The long tail will only get longer - and stronger, with niche interests better and better served; and I expect the head (top percentile of creators) to get stronger too - in fact, I think conditions are ripening for content to come along that unites viewers around the world at a scale we haven’t seen before. This feels like a total Hail Mary (if the history of viral content teaches us anything, it’s that you can’t predict it), but I could imagine some kind of live interactive gaming experience taking hold of the global imagination, and it’ll be so simple we’ll all kick ourselves for not having thought of it ourselves. Or it could be MrBeast hosting a reincarnation of HQ Trivia, with millions of people competing to be the bride/groom at the next Royal Wedding, while he simultaneously skydives from the edge of space, all set to a K-pop soundtrack. You heard it here first.

And how are creators making money? 

There are fundamentals that I don’t see changing: money comes into the ecosystem either from advertisers looking to reach an audience, or from the audience itself. For the former, the creator economy will continue to capture a greater and greater share of ad spend, mostly because it will capture a greater and greater share of viewer attention. But it’s the latter - growth in viewer spend - that excites me the most.

The internet has created huge consumer surplus - people value what they’re consuming far more highly than what they are currently paying for it: that’s an incredible opportunity. I’m not saying it’s possible to suddenly start charging everyone for content that they’re used to receiving for free or near-free. But we’re seeing there is huge willingness to spend. Sometimes that can be out of a desire to support, even a sense of fairness; a recognition that creators of value deserve to get paid for that value. But more realistically, most people pay (more) to get more. So...more of what? We can break viewer payments down into three categories: paying for content, paying for experiences, and paying for goods. 

Paying for content sounds like the most obvious but actually it’s not simple: if you put your whole YouTube channel behind a paywall, how will new viewers ever discover it and realize it’s worth paying for? Creators are figuring this out with channel memberships, flexibly windowing content and maintaining a balance between what’s free and what’s paid, to grow both sides of their channel and keep all viewers happy. This is already transformative: we’re seeing creators with very modest audiences (in YouTube terms), who previously couldn’t make a living from ad revenue alone, now building viable businesses from a small core of a few thousand members.

‘Experiences’ include interacting directly with the creator, the content and the community, and standing out from the crowd. On YouTube that can mean buying a Super Chat and having the creator call out your name and your message in real time; joining a digital meet-and-greet - a personal 1:1 - with your favorite creator; having access to a virtual room where you can hang out with other like-minded fans - like an exclusive members’ club having; or simply having a member badge by your name whenever you comment. All those things are happening right now; in 10 years will we look back and say ‘wow, that was so basic’? Imaginative and enterprising creators will find ways to incorporate viewers directly into their content, make it awesome for those viewers, and earn from it.

Finally, paying for creator-associated goods is nothing new: creators have been flogging merch, doing brand deals and adding affiliate links in their descriptions and bios for years. But all signs point to it growing dramatically in the coming decade. Viewers trust their favorite creators’ taste: creators have the opportunity to sell all sorts of self-branded products, and brands will continue to pay more and more for creators’ influence. Short-form video and live streams will increase the FOMO factor, native purchase flows will reduce friction, and interactive features will mean the purchase itself can become part of both the content and the viewer experience.

One last thought here: having said earlier that money comes into the ecosystem either from advertisers or from viewers, I’m excited to see how the two can work together to have a compounding effect. As viewer-funded businesses grow, they’ll become more and more attractive opportunities for brands to get involved in. For instance, Maybelline could sponsor a beauty creator’s memberships business, sending members regular make-up samples or discount codes. This is exciting because it can be genuinely win-win-win: great offers and value for money for viewers, deep engagement for brands, and a chance for creators to earn more from both.

In a world where we're moving from institutions to individuals, and creators don't need to rely on incumbents for the infrastructure that they've traditionally provided to make money - what are some of the core pieces of infrastructure that still need to be built?

So far I’ve talked about money coming into the ecosystem - but as it grows, the flows of money within the creator economy will also grow: in other words, creators paying for services that will help them to succeed. I can see a couple of these flows becoming much more significant than they currently are: their current absence is striking when you compare the creator landscape to the traditional ecosystem.

The first is around collaboration. I’m fascinated by the delta between the number of people it can take to produce a TV show or a movie, and the fact that many creators work on their own. And yet, to take a very reductive view, both achieve the same goal of entertaining a viewer for a period of time.  One conclusion to draw from this could be that market pressures will force the average size of a TV/Movie production team down - but I’m more interested in the opposite question: what do creators need to help them build their own teams? 

I’m a firm believer that the best creativity comes from collaboration, not from lone geniuses. On a practical level, it’s simply unrealistic to expect that the same individual can deliver the goods across all areas - ideation, writing, presenting, shooting, sound recording, editing - and manage the business side of the channel at the same time. A lot of creators already rely on the skills of others, and generalist freelance platforms like Fiverr and Upwork make it possible to find an editor or an animator. But I’d love to see infrastructure built that specifically supports virtual teamwork for creators, and makes collaboration accessible, and as frictionless as possible, for all. One person could then become the editor, the script consultant, or even the thumbnail designer - for dozens of creators, helping them all up their game, and earning a good living at the same time.

The second is around advertising for content. Seeing trailers for other shows or movies is a deeply engrained part of TV-watching or cinema-going (not to mention seeing ads in newspapers, magazines, or on billboards and buses). But it’s never caught on in a meaningful way in the creator ecosystem - where ‘the algorithm’, despite being the subject of endless suspicion and speculation, is implicitly trusted as the chief determinant of whether and how prominently a creator’s video is promoted to its potential audience. In theory creators can already run ads for their own content on YouTube, but almost none do: I can see value in infrastructure that makes it easy to pay to promote your content to relevant audiences - assuming, of course, you can get a positive return on your investment from the revenue opportunities that would result. How to do this in a way that wouldn’t upset the creator community or disrupt the egalitarianism of the ecosystem or - after all, every channel starts with zero subscribers, and every video with zero views - is another question: I’m excited to see if anyone’s figured it out by 2030.