The creator economy will boom even further in the upcoming years

Goldman Sachs Research expects the boom of the “creator economy” to explode even further, as individual creators with online followers are becoming a major force in the digital landscape.

The creator economy will boom to reach $480 billion by 2027

The prediction is that the total market could double in size over the next five years, reaching $480 billion by 2027. The main expected growth drivers of the creator economy are influencer marketing and platform payouts, particularly from the monetization of short-form video platforms through advertising, according to the analysts.

"Content creators are the driving force behind the digital revolution, transforming the marketing landscape with their ability to craft compelling stories and build authentic connections with customers"

So, What’s fueling this growth?

Digital media consumption is on the rise, and new technology has made content creation more accessible than ever. Platforms like TikTok are gaining popularity, while legacy platforms like Facebook and YouTube continue to introduce new formats for sharing user-generated content.

What is the creators’ source of income?

The 50 million global creators are expected to grow at a 10-20% compound annual growth rate during the next five years. Their income comes from various sources, the main one being branding deals to pitch products, which makes approximately 70% of their revenue. In addition to this, they can get a share of advertising revenues with the host platform and other forms of direct payments from followers.

Currently, only about 4% of creators earn more than $100,000 a year, but their share is expected to remain steady as the ecosystem expands.

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Scale

a large, global user base with diversified interests is essential for creators to reach their target audience. The bigger the platform, the more opportunities there are to find their niche!

Capital

Access to significant funding is crucial for platforms to support monetization efforts. Whether it's through a diversified revenue base or being part of a larger parent company, capital helps creators thrive.

AI-powered engines

AI-powered recommendation engines matching creators with interested users.

Effective monetization tools

Diverse product offerings and payout structures so creators can have more than one source of revenue. After all, who doesn't want multiple sources of income?

Robust data and analytics

Transparency on engagement, retention, conversion, and other metrics is vital for creators to understand their performance and optimize their content strategy.

E-commerce options

Integrating shopping into the core user experience opens up new opportunities for creators to monetize their content. Yay for turning followers into customers!

As of right now, the big platforms have the upper hand for now, according to Goldman Sachs Research. As competition for content and audiences intensifies, creators are expected to migrate to these platforms, prioritizing stability, scale, and monetization potential.

So, what does this mean for you, creators?

It’s crucial to make strategic choices about where to showcase your content and build your audience.
Choose platforms that offer not just stability but also opportunities to grow and monetize your content. Remember, it’s not just about the number of followers; it’s about the value you provide and the income you generate!

And if you’re still unsure about where to start, don’t worry – we’ve got your back! At Nexoom we connect brands, creators and viewers. Contact us to discuss the best strategies for your content creation journey!

Note: This information is for educational purposes only and is not intended as financial or investment advice. Goldman Sachs does not guarantee the accuracy or completeness of the information provided.

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