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Dream job. Cubicle avoidance. Write for life.

These are just a few descriptors of what is now being called the creator economy. If you’re not familiar with the term, you’re not alone. But the chances are good that you’ve engaged with it before through websites and apps you regularly use.

What is the creator economy?

Perhaps the best way to explain the creator economy is with a story.

9-year-old Ryan Kaji loves toys. Unlike many kids his age, he doesn’t break them very often, which has led to him assembling quite a collection over the years. Ryan also loves YouTube. He loves it so much that he decided he would create a channel about his passion — toys. A lot of people now love Ryan and his toys — in fact, almost 30 million people love him. Ryan now earns money from his YouTube channel because all of those people watching him review his toys also see ads on his channel, and Ryan makes money when someone watches one of those ads.

Ryan is one of over 50 million people who independently create content and build communities of people who voraciously consume that content. As a result, adults and kids aren’t tuning into network television to see their favorite shows like they used to or spending their time driving to a movie theater when they can see the same film at home (just ask Scarlet Johansson).

SignalFire cites a survey that found that more American kids want to be a YouTube star (29%) than an astronaut when they grow up (11%). Sorry NASA; it looks like more kids will be making a video for their YouTube channel than watching your next launch.

There are opportunities galore for the creative segment of our population to make money online. Writers, filmmakers, musicians, and other content creators (like Ryan) can share their passions and creativity with an appreciative audience. Livestream gaming is one of the new money-makers opening up kids’ wallets. Many youngsters (and some oldsters) love to lay awake and watch their favorite gamers have fun all night.

The new creator companies

We’ve all heard of YouTube, but have you ever heard of content creation company Spext? If you’re into blockchain technology, how about Roll? Learn anything new on Strydal? Some of the creator companies we’ve heard little about so far are going to be the next big names, like LinkedIn, Substack, or Instagram are today.

The venture capital crowd has also noticed this relatively new economy and is putting their money on the table. They’ve been pouring cash into up-and-comers like Kajabi, Patreon, Cameo, Splice, UnitedMasters, and Skillshare.

Why are VCs getting behind the creator economy and putting up over $1.3 billion so far in 2021, compared to $464 million in all of 2020? Some of the evidence points to popular platforms seeing a rapidly increasing amount of income, to the point where content creators are becoming high net worth superstars. For example:

  • The top-performing YouTube channels harvested $211 million between June 2019 and June 2020. The numbers for 2021 will be staggering.
  • Big-name Instagram influencers like Eleonora Pons or Huda Kattan are netting up to 6 figures – per post.
  • The top writers at Substack can generate personal income as high as $1 million annually.
  • Since 2011, creators for one of the granddaddies of creator companies, Gumroad, have earned more than $460 million selling their content on the platform.

Mike Bienstock, the founder of Semaphore, said, “These are not people who had a lot of money and decided to start a business. This is pretty much first-generation wealth across the board.”

However, not everyone is lining their pockets with greenbacks. As top creators for big platforms are getting cut checks ranging from 6 to 8 figures, the “middle class” is hauling in much less. For example, on OnlyFans, the top 1% of creators reap a third of the profits, while the majority sees less than $145 per month.

Creator economy vs. gig economy

Perhaps the creator economy owes the gig economy a debt of gratitude. The pioneers of the gig economy, and the millions that have followed since by choice or chance, showed future creators that there is life outside of the traditional workplace.

Though both economies have been “the road less traveled” for many, they differ in many ways, as we illustrate below:

What's The Difference?The Creator EconomyThe Gig Economy
Who you work forMultiple customersMultiple aggregators
Skills requiredUnique, non-commoditized skillsNon-unique, commoditized skills
Nature of workLow process, high innovationHigh process, low innovation
Room for growthEarnings grow with time & effortEarnings decline due to competition
Job satisfactionHigh purpose fulfillmentLow purpose fulfillment
Job creativityFreedom to do what you loveMust do whatever pays
Job stabilityLow risk of replacementHigh risk of replacement

Addressing the benefits gap

Even though contributors to the creator economy are fiercely independent, many of them have come from traditional backgrounds: finance, education, journalism, graphic design, and many more. As a result, they’ve given up, or are about to give up, two things near and dear to them for so many years: a regular paycheck and their insurance benefits.

They’ve exposed themselves to greater opportunity, but also greater risk. They may not be driving on the freeway as much as when they had to head to the office, but they’re still at risk for other accidents and illnesses which jeopardize their income.

Health insurance is a benefit that many creators and gig-workers sorely miss. The feeling of security one has with an insurance ID card in their wallet has now been replaced by the fear of financial disaster and personal bankruptcy that can happen with today’s exorbitant healthcare costs. A broken leg from a skiing accident can easily cost you $5-$10 thousand. Cancer surgery and treatment without insurance — forget about it.

And that goes for the perils of disability too. Losing their disability insurance means they’ve lost their income if they can’t create content or deliver their gig services if they’re laid up with an accident or injury. Paying the medical bills is bad enough; throw in making the mortgage or rent payment, food, utilities, etc., without a paycheck — it’s a nightmare scenario.

Losing group life insurance coverage is another trouble spot for contributors to the creator economy. Two paychecks are a necessity for the vast majority of families, and the loss of one of them spells financial disaster for the surviving spouse/partner and family members.

Fortunately, all three of these are available on an individual basis. Group health insurance is usually portable and gives security while you find another health insurance policy. Disability insurance and life insurance are also available on an individual basis.

The beauty of the creator economy is that just about anyone can play. Find your passion, build a community of followers around it, and cash your check. That’s simple, but not easy. Add in tenacity and a strong stomach, and you’ve got a shot at it. There’s plenty of pie for everyone, and the pieces are only going to get bigger.


Having grown up in upstate New York, Bob Phillips spent over 15 years in the financial services world and has been making freelance writing contributions to blogs and websites since 2007. He resides in North Texas with his wife and Doberman puppy.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

Work-Life
Published July 31, 2021