The Rise of the Creator Economy

Julia Maltby
6 min readSep 20, 2020


Over the last fews years we’ve seen a surge of the “creator economy” — creators earning income from making and distributing online content. The concept of monetizing creator-produced, online content isn’t new. Notably, Patreon has been around since 2013. Yet, the convergence of a number of macro factors (ranging from the rise of the gig economy to COVID-19 ramifications), coupled with the development of tools and products to support online creators, has caused the category to take-off.

Historically, the creator economy has been predominantly composed of individuals sharing an existing skill, perspective, ability etc. that they’re now able to distribute, and ideally monetize, through online platforms. For example, a teacher who can offer online courses through Teachable. However, we’re now seeing an entirely new segment of online creators gaining momentum, and amassing followings without sharing a unique skill they already held (e.g.,TikTok superstars).

A Brief History of the Creator Economy:

In the 1990s, “creators” predominantly existed in the traditional, professional sense (authors, journalists, actors, musicians, etc.). Without online platforms, many creators struggled to amass large followings, making independent monetization challenging.

In the late 1900s early 2000s, this dynamic began to shift. By 2000, 50%+ of US households had personal computers & digital cameras. Simultaneously, online content sharing platforms emerged, enabling creators to attract and grow their online followings (e.g. Blogger in 1999 and YouTube in 2005).

By 2010, a second wave of content sharing platforms emerged. These platforms were both sector agnostic (e.g. Instagram) and vertical/category specific (e.g. Medium). Many of the vertical-specific platforms offered new monetization methods, such as subscriptions to specific creator pages in exchange for exclusive or first-access content. To support creators amassing audiences on platforms without democratized monetization built in (such as YouTube, where a small portion of creators earn ad revenue), platform-agnostic, “layer on top monetization” tools also emerged (e.g. Patreon).

Content “Type” Evolution:

Unsurprisingly, creator-produced content evolved as the tools and platforms available to creators matured. Video content, for example, saw clear shifts in 1) creator/fan ratios 2) content composition 3) content duration and 4) creator/fan engagement mechanisms. See below for a high-level summary of these shifts.

Creator Monetization Today:

Today, there are a handful of ways creators monetize their online content. While not fully exhaustive, the most popular and widespread mechanisms are 1) Advertisements 2) Subscriptions 3) One-Off Sales/Donations 4) Brand Sponsorships & Influencer Marketing and 5) Affiliate Marketing. I’ve outlined how each mechanism works as well as some of the “cons” for creators and consumers below.


How It Works: Creators that meet a threshold of followers are able to monetize their content through ads. Generally, the entire ad process is managed by the platform, and it distributes a portion of the proceeds to creators (e.g YouTube takes 55% of ad revenue and distributes 45% back to creators).

Cons (for creators):

  • Most creators don’t have enough fans to be eligible for ads.
  • Even for eligible creators, it’s nearly impossible to make a sustainable income via ads. ~97.5% of YouTubers don’t make enough to reach the US poverty line ($12,140). source
  • Ad revenue for creators is impacted by larger market conditions (e.g. despite soaring content consumption rates, ad revenue for creators has declined during Covid, as enterprises pause ad campaigns), currently down 33%. source

Cons (for consumers):

  • Consumers hate ads, and are willing to pay to avoid them (½ of consumers use ad-blocking technology and many consumers pay for no-ad streaming services). source


How It Works: Fans pay a set, recurring amount to creators, generally in exchange for exclusive or first-access content. As examples, Patreon (layer-on-top, platform agnostic) and Substack (subscriptions built into the content hosting platform).

Cons (for creators):

  • Some monetization platforms (e.g. Patreon) require creators to re-direct consumers (v.s having monetization and content hosted on the same platform).
  • Low discoverability (platforms don’t help creators find/connect with new subscribers).
  • Slow payment processing on some platforms.

Cons (for consumers):

  • Little/no “social status” or recognition for being a top-tier subscriber.
  • Generally challenging to connect/create community with other fans.

One-Off Sales/Donations:

How It Works: Consumers make one-off payments to creators (either through a “layer on top” platform like Buy Me A Coffee, or through a content platform itself). This can also take the form of one-off paid comments (e.g. YouTube superfans can pay to have comments highlighted during a livestream. YouTube keeps 30% of comment revenue).

Cons (for creators):

  • No predictable revenue and small earning potential.

Cons (for consumers):

  • Unable to build meaningful, repetitive connections with creators/content.

Brand Sponsorships & Influencer Marketing

How It Works: Influencers partner directly with brands, and are paid to post products on their behalf (importantly, platforms historically don’t participate in the “matching” process). Influencers are paid upfront (vs affiliate marketing, where they’re paid based on commission).

Cons (for creators)

  • Only revenue generating in a meaningful way for creators with thousands of followers (w/ current structure).
  • Can come off as product pushing, disrupting the authenticity of a creator’s content.

Cons (for consumers)

  • Again, creators pushing products can seem inauthentic, jeopardizing the creator/fan relationship.

Affiliate Marketing

How it Works: Brands provide creators with an affiliate link for products. When a product sells, creators earn commission for the sale.

Pros (For Creators)

  • Lower earnings, but more accessible (creators with small/niche followings can still be profitable affiliate partners for specific products).

Cons (For Creators)

  • Creators have to proactively work to grow their followers (they can’t keep promoting the same products to the same followers).

Cons (for consumers)

  • Like brand sponsorships/affiliate marketing, affiliate marketing can feel product pushy/inauthentic.

Looking To The Future:

There are many developments within the creator economy that I believe we’ll see gain momentum through 2020 and beyond. Below, I’ve highlighted three trends or subsectors of the creator economy to watch.

First, fans and creators will increasingly have collaborative, versus one-way, relationships. Creators will look to fans to provide feedback and input on potential offerings and products. We’re already seeing this extensively with Instagram creators polling their followers for suggestions. But, this offers minimal, meaningful analytics to creators. ZebraIQ is an interesting company tackling the analytics aspect of this problem. Jemi is another startup that’s looking to create customized relationships between creators and their fans.

Second, I believe we’ll see a rise of educational content and community offerings for up-and-coming creators. As discussed above, right now a tiny segment of creators are monetizing their followings in a meaningful way. Moreover, new creators lack the tools, resources, and communities needed to understand audience growth, development, and ultimately monetization. These educational tools and communities could emerge as platforms of their own, or baked into existing creator tools as supplementary product offerings.

Third, much like we saw with the gig economy, platforms specifically geared towards supporting the unique needs of online creators will emerge in the coming years. Looking at fintech, for example, we’re already seeing companies like Karat that incorporate creator stats, such as subscriber count, views, sponsorships, and more, into banking. Two of our portfolio companies operate within the music category: Splice, which offers creators a music production and collaboration platform, and HiFi, which provides creators with tools and services for financial rights.

Ultimately, I’m excited to watch this sector evolve. If you’re working on a company within the creator economy, or generally interested in the space, I’d love to connect. Please shoot me a note at, or reach out to me on Twitter here.



Julia Maltby

Early Stage Investor @ Flybridge & X-Factor Ventures | GP @ The MBA Fund | Previously @ Underscore VC, WeWork, and Plum Alley Investments | Wharton MBA