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Creator Economy

  • 8 mins

Content Creator Business Models: Strategies for Long-Term Success

Cam Mulvey

July 31, 2023

The thrill of hitting “upload” and sharing your passion with the world is unmatched. It's the culmination of hours of hard work, dedication, and creativity, all distilled into a single moment of release. In that moment, you unleash a piece of yourself onto the digital stage, and the anticipation of how it will be received by your audience is both thrilling and nerve-wracking.

But amidst the likes and comments lies a burning question – how can you turn your content into a sustainable business that pays the bills?

In this blog, we'll break down the top monetization strategies into three basic categories, focusing on the patron–who's paying you. 

But before we dive in, let's address a crucial aspect often overlooked in content creator monetization discussions - sustainability. Sustainability is the cornerstone of a successful content business. While traditional employees can plan their career trajectories over several years, creators face unique challenges. Without a sustainable content business model, creators will find it challenging to plan for the future of their business. 

Consider these eye-opening statistics: 61% of content creators experience burnout, most creators earn less than $25k per year, and the most successful creators utilize an average of only 3.4 channels and 2.7 income streams. Most creators are solopreneurs, running an entire business from an iPhone and a MacBook. A diligently planned sustainable business model will position creators on the positive sides of these statistics, with earning cash flow and avoiding burnout. 

Content creator working on content alone - Building a sustainable business by leveraging a content creator platform

To achieve sustainability, your monetization strategies should embody four key pillars:

  • Predictable: You can tell roughly how much you’ll earn this month, next month, and six months from now. This predictability enables creators to plan and invest in their business, including creating higher quality content. 
  • Reliable: You should not have to worry about significant fluctuations in your revenue. A reliable business model allows creators to build their business and audience with confidence.
  • Scalable: You are able to expand your business and revenue streams without sacrificing quality or overburdening yourself. A scalable business model allows creators to maximize their revenue potential while maintaining their creative vision and engagement with their audience.
  • Aligned: The business model aligns with your values, content, and audience. If the person providing you the opportunity succeeds, you’ll succeed as well.
A visual depiction of the four pillars of sustainable monetization, shown against Roman-esque pillars against a tropical beach

Third-Party Strategies: Forging Lucrative Partnerships 

Sponsored Content: Leveraging Brands for Profit

For the majority of creators, sponsorships and brand partnerships are the most significant source of earnings. It's a simple concept - a company pays you to promote their brand or products in your content.

Here's how it typically works: A brand reaches out to you or vice versa, and they present the terms of the collaboration. You then creatively incorporate the promotion into your content, and in return, they compensate you for the shoutout. While it sounds straightforward, sourcing brand deals was reported to be the biggest challenge faced by creators last year.

Many creators post fewer than 20 sponsored posts per year, which means they're cashing a check less frequently than every other week. So, why are brand deals, despite being a top-earning source for creators, relatively rare and difficult to secure?

The answer lies in the realities of being a content creator. If you're a mega-influencer like Mr. Beast, brands are lining up to work with you. On the other hand, if you're a micro or nano creator, opportunities are available, but they're much harder to find, source, and negotiate. Moreover, the current economic landscape has many brands cutting back on their marketing budgets, leading to uncertainties about influencer marketing spend. 

While sponsored content is currently a solid income stream and offers scalability and control over sponsor alignment, its predictability fluctuates, and its reliability could be at risk in the coming months.

Affiliate Marketing: A Simple Entry into Earnings

Another popular monetization avenue is affiliate marketing. It serves as one of the easiest ways to start earning money as a creator, as many programs have no specific qualifications for joining. Brands often make their affiliate programs publicly available, allowing creators to join independently.

Once you're part of an affiliate marketing program, you’ll receive specific e-commerce product links that you can promote on your profile. Compensation in affiliate marketing is typically based on the "Cost per Acquisition" (CPA) model, meaning you receive a percentage of the proceeds when someone clicks on your link and completes a purchase.

While affiliate marketing can be a straightforward income stream, its profitability largely depends on the size of your audience and the value of the goods being promoted. For creators with smaller audiences or low-priced products, earning significant income from affiliate marketing can be challenging.

When diving into affiliate marketing, you might find yourself facing a conflict of interest – with none other than yourself. Many creators invest valuable exposure in promoting affiliate links within their content, which could be better repurposed to promote their own merchandise or products. Instead of promoting Amazon’s products and driving sales for Jeff Bezos, why not focus on driving sales for yourself? 

In terms of sustainability, affiliate marketing has its pros and cons. While its reliability might not be the highest, it becomes more predictable as you gain experience. The scalability and alignment of affiliate marketing are well under the creator's control, offering flexibility in how they approach this strategy.

Leveraging Platforms to Pay the Bills

AdShare: Passive Income for Content Creators

AdShare, or any kind of “Revenue Share,” is the second most popular method for creators to monetize their content, most commonly on YouTube. When you watch a YouTube video, the ads shown on that video generate revenue, which is then split between the platform (45%) and the creator (55%). 

AdShare is a powerful tool in the creator's arsenal because it resembles the closest thing the creator economy has to passive income. Your content from years ago can still continue to earn income for you, as long as you put in the effort upfront to produce high-quality and evergreen content, especially on platforms like YouTube where content distribution isn’t linear. 

A recent exciting development in the creator economy is the expansion of AdShare programs to other platforms. For instance, Elon Musk's decision at Twitter to pay creators a portion of the revenue from ads running on their tweets is a promising step in the right direction.

Of course, AdShare does have some downsides. Creators do not have control over the advertisements displayed on their content and the platform takes a significant percentage. However, considering the benefits it offers, these drawbacks are easily outweighed, making AdShare an attractive component of a creator's business model.

While algorithm changes can impact the predictability of AdShare income, it remains a reliable and scalable source of earnings for creators. It does an excellent job of aligning creators with platforms, as both are incentivized to maximize ad revenue by keeping viewers/users engaged. 

Creator Funds: An Unsatisfying Solution

The alternative strategy that makes the platform your patron is Creator Funds. These programs emerged on various social media platforms in 2020 as a way to reward creators based on specific metrics like watch time. While the idea behind Creator Funds is great, the execution often falls short (which I unpacked in-depth in a blog and in a video). 

The biggest issue with Creator Funds is that they are a static pool of money. As the platform grows and more creators participate in the fund, the potential payout for each individual creator diminishes. This means that as the platform becomes more popular, the earnings from Creator Funds become less and less appealing for the creators involved.

So, when we evaluate Creator Funds based on our pillars of sustainability, they are not a reliable source of income, as the payout decreases over time, and they do not offer scalability, as their potential diminishes as the platform's user base grows. I suppose they are theoretically aligned, by rewarding engagement, but the only pillar they truly satisfy is with payouts that are predictably insufficient. 

Audience Strategies: From Merch to Premium Memberships

Now, let's dive into the various audience-centric strategies that creators can leverage to directly monetize their loyal followers.

Merch: Cultivating a Personal Brand 

One of the most traditional and commonly used methods for creators to monetize their audience is through merchandise sales. Selling custom t-shirts, hats, and other branded items has been around for ages, well before the rise of the creator economy. 

Custom merchandise allows creators to strengthen their relationship with their audience by leveraging their unique brand identity. With the help of various online platforms, designing and selling merchandise has become easier than ever. However, there are some notable downsides to consider. Managing physical inventory can be challenging and may add to the overhead costs, even if you are able to outsource it. To overcome this hurdle, it's advisable to look for platforms that handle production, storage, and shipping on the creator's behalf, which can take a bite out of your margin. 

Selling merch can be a fantastic way to monetize a fan base. As you gather data on merch sales, the income stream can become predictable and aligned with your growth. However, scaling this strategy can be challenging, especially if you're operating as a solo creator.

Digital Products: Unlocking New Possibilities

For creators who wish to sell products directly to their audience without worrying about physical inventory, digital products offer a variety of opportunities. These can include templates, e-books, photo-presets, and even NFTs (Non-Fungible Tokens). 

Among digital products, courses stand out as a powerful means for creators to share their valuable knowledge and empower their audience. Course platforms typically operate by charging creators a platform fee for hosting their content. Creators, in turn, can charge a one-time fee to their students, with the majority of that revenue going directly to the creator (except for platform or transaction fees). 

However, transforming your content into a successful course can be challenging, even if you consider yourself an edu-creator. Being effective on platforms like YouTube or TikTok does not necessarily guarantee success as an instructor, as courses require a different approach and instructional methods. Nevertheless, if executed successfully, courses offer substantial earning opportunities: course platform Teachable reported a 38% increase in course creators earning over $100,000 in 2021. 

Digital products are highly scalable and, when aligned with the creator's content, become both predictable and reliable revenue streams.

Tips: The Generous Support of Fans

Tips have become increasingly popular, with various platforms like Buy Me a Coffee enabling creators to receive tips from their fans. Even prominent platforms like YouTube have introduced tipping features directly on-platform. Generous fans have been known to tip their favorite creators with impressive sums.

While tipping can provide an additional income stream, it is inherently unpredictable and unreliable. Tips are typically given on a whim, making them difficult to rely on as a consistent source of revenue. Therefore, tipping is not considered a robust business model on its own.

Premium Memberships (Subscriptions): Predictable and Reliable Revenue

Premium Memberships have emerged as an exciting strategy for creators to monetize their content directly. Memberships allow fans to subscribe on a monthly basis, gaining access to exclusive content or off-platform communities curated by the creator.

Among all strategies, subscriptions for content creators are the only naturally recurring option, making them highly predictable and reliable. Platforms like Twitter, Twitch, and Instagram have embraced this approach, and even new platforms (**cough cough, Sute, cough**) are adopting it. 

Data from a recent Zippia report indicates that the average creator with a subscriptions business model earns 20 times more than those without, even with an average of only 1.5% of their followers subscribing. Moreover, two-thirds of social media users are willing to pay for premium memberships, with an average willingness to spend $14 per month.

Premium Memberships tick all the boxes of sustainability. They provide creators with a stable income stream that aligns with their audience's needs, interests, and exclusive offerings. Memberships are scalable, allowing creators to expand their premium community without compromising content quality. By embracing premium memberships, creators can build a flourishing and sustainable content business.  

Group of content creators empowering each other - Emphasizing the importance of a content creator platform and content creator community

Monetizing your content as a creator is not a one-size-fits-all endeavor. Each strategy has its merits and challenges, but the key lies in finding the right balance that aligns with your values, content, and audience. Sustainability should be at the forefront of your decision-making, as it lays the foundation for a thriving and profitable content career.

As you embark on your monetization journey, remember the four pillars of sustainable monetization: predictability, reliability, scalability, and alignment. Consider your unique strengths and audience preferences to craft a diversified and robust business model.

If you're an edu-creator in the field of entrepreneurship, career development, or personal finance, we encourage you to strongly consider a premium membership community, and we invite you to apply to Sute to learn more about how we can support your journey to building a loyal fanbase and be the best content creator platform for you.