The “creator economy” could grow to nearly half a trillion dollars in the next four years, according to Goldman Sachs.
That buzzword describes the online ecosystem of people creating and monetizing videos, music, podcasts, newsletters, art and other forms of expression, usually on social media.
But advertising and algorithms can be fickle mistresses. For the last decade, Patreon has enabled fans to directly support creators with paid digital subscriptions. Now the company is offering a free membership option and the ability to sell digital works.
Marketplace’s Meghan McCarty Carino spoke with Patreon CEO and co-founder Jack Conte about how these new services can help the creator economy grow.
Below is an edited transcript of their conversation.
Jack Conte: It’s become very clear over the last three years that the way the internet is being organized is shifting dramatically, and it’s not good for creators. The way the internet used to work is a creator would publish something and then some fans would find it online, and they would follow that creator or they would subscribe to the creator. And then when the creator published more things, their fans would see it and would enjoy it. And there’d be this wonderful sort of community of a creator and their fans. And I think a lot of the major platforms are shifting to a more algorithmic curation of content. And you might think, OK, so what’s the harm there? But actually, every post that shows up in your feed that you didn’t choose to subscribe to means that a post below that post from a creator that you did choose to subscribe to is getting demoted! And that’s unfair for creators, that’s not the way it should work. When a fan decides to follow a creator, and when a creator decides to invest in a platform and build a business there, they should be able to reach those people.
Meghan McCarty Carino: The creator economy appears to still be growing. Do you see gaps or services that are needed to allow it to continue to thrive?
Conte: Sometimes it’s easy to forget, but we’re really only, like, 10 years or 15 kind of into self-publishing, you know? And so 10 years ago, the kind of main priority and burning fire was ensuring that creative people are compensated for their work, which is really important. Now, creators are starting to be paid, building essentially small business media companies. And there’s a whole new set of problems popping up for this new category of person. What are those sorts of things? It’s, you know, the ability to get your message out there. It’s the ability to build a tight-knit community. It’s the ability to have publishing tools that drive your business, financial tools to accounting and tax preparation. And any problem that an emerging, small business would have is a problem that a lot of creators are starting to experience right now as they transition from being, you know, basically to becoming full-time creators. And so I think that’s a lot of what we’re starting to see bubble in the creator economy. And I think we’re just gonna see more and more. I mean, this is the tip of the iceberg.
McCarty Carino: There’s been some reporting alleging internal mismanagement at Patreon that has delayed some big launches, like the native video service. How is Patreon ensuring that its future updates are being released in a timely manner and that these communities that are being built will be sustainable?
Conte: The truth is, we are moving faster than we’ve ever moved in our history as a company. And then if you look at just what we’ve shipped over the last year, you know, analytics and free trials for creators and video and a new billing system and posting improvements, audio previews, Discord integration improvements, tier highlighting for creators — I mean, it’s actually been, like, just a boatload of things that we’ve shipped for people, and there’s also just a lot more coming down the pipe right now. We’ve got some more announcements coming out in a few months, which, you know, we’ll be talking about soon.
McCarty Carino: We have seen creators sometimes clashing with platforms over issues like revenue sharing or restrictions on brand deals. I mean, what do you think is the key to keeping a positive relationship between platforms and creators?
Conte: Gosh, it pains me, as a creator myself, to have lived through that and to be living through that. At its core, I really think there’s one big problem, which is the business model of these platforms when your customer is the advertiser, which we should make no mistake, that is the customer for most of the internet platforms, that’s who’s paying the platforms, that’s where their revenue is coming from. And when that is the case, creators take a backseat. It just is what happens. And that’s not the way it should be. That sucks. It’s not fair to creative people. Creative people deserve a place where they are the customer, where they are the priority. And so, you know, I think the main answer to your question, as trite as it seems, it’s building a truly creator-first culture. It’s building a culture inside the company where every line of code, every response to every email, every policy update, everything is trying to serve creators, not advertisers. Patreon has from Day One always thought of creators as our ultimate customers, and our business model depends on it. Patreon is not paid unless our creators are successful.
Related links: More insight from Meghan McCarty Carino
That report I referenced on Patreon’s internal struggles comes from an investigation by The Information earlier this year. The company has also weathered layoffs — it cut about 17% of staff last September.
Patreon, like so many other internet companies, saw explosive growth during the pandemic and was making moves toward an initial public stock offering.
But it has put a hold on those plans, with its valuation falling as the tech industry decelerated.
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