Was The Creator Economy Way Overblown? — With Kaya Yurieff and Joe Caporoso

Kaya Yurieff is a reporter at The Information covering the Creator Economy. Joe Caporoso is the President of Team Whistle and founder of Badlands, a subscription podcast covering the New York Jets. Both join Big Technology Podcast to discuss whether the Creator Economy — a term for the online content creator business — was overblown. We dig into the motivations of platforms and VCs looking to build businesses off those who believed they could make a living by posting on social media. And we examine how creators who make it do so successfully. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [email protected] My article that kicked off the discussion: The Creator Economy Was Way Overblown Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Kantrowitz?

  LinkedIn Presents.

• 0:14Alex Kantrowitz?

  Welcome to Big Technology Podcast, a show for cool-headed, nuanced conversation of the tech world and beyond. The creator economy, just the term itself, promises that creating content online is an economy in its own right, that if you post and podcast and YouTube enough, you can make it. The term's been pushed by platforms like YouTube and VCs and creators themselves, and perhaps with a bit of wishful thinking, because only a select few creators, those at the very top, realize the promise. That at least is what I found in my reporting and what I wrote about in a recent Big Technology article called "The Creator Economy Was Way Overblown." So today, let's interrogate my premise, and

• 0:56Alex Kantrowitz?

  if it's right, let's ask who benefits from the illusion, or delusion, that the creator economy indeed exists. Our guests today are Kaia Yuriev, a Star Reporter who covers creators for The Information, and Joe Caparozzo, who's the President of Whistle Sports, which is a media company that effectively lives on social media. Joe is also the host of Badlands, a subscription podcast about the New York Jets that I'm pretty much addicted to, so he can speak to us from both a social media partner perspective and a creator perspective, which will be nice. Our conversation is coming up right after this. This episode is brought to you by Genesis. What does it actually take to put Agentic

• 1:37Alex Kantrowitz?

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• 2:21Alex Kantrowitz?

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• 2:37Alex Kantrowitz?

  Welcome to the podcast, Joe and Kaya.

• 2:39Speaker 01

  Hey.

• 2:40Speaker 02

  Hi, thanks for having me.

• 2:42Alex Kantrowitz?

  Great to have you both. This is going to be a discussion that will really cover the creator economy, whether it's overblown and maybe my perspective is a little bit too negative. So why don't we just start with the definition? Kaya, what is the creator economy?

• 2:56Speaker 01

  It's a great question. I feel like everyone defines it a little bit differently. I view it as kind of the, in three main buckets. So you have the creators themselves, you have the platforms, and then you have kind of the, in the middle, the managers, the video editors, and kind of the economy around it. So, you know, you have tech platforms, you have startups. So that's kind of how I view it as an entire ecosystem.

• 3:16Alex Kantrowitz?

  Joe, do you agree?

• 3:18Speaker 02

  Yeah, I think that's an accurate description. I think internally, working at a publisher, we generally think of it as how different creators and online influencers are monetizing themselves on different social or OTT platforms is generally how we define it. But I think that description summarizes it pretty well right now.

• 3:39Alex Kantrowitz?

  So whenever something has a big term like creator economy, it generally comes from like VCs trying to play it up as this thing that's now so big that it's worth investing in, or platforms actually trying to play it up so people spend their time on the platforms creating. What was the promise of the creator economy, Kaya? I mean, when these people, I mean, really it was YouTube that popularized it and then the VCs ran with it. When you hear a term like creator economy, what is it? It's obviously a label for something, but it's also a message. What is the message?

• 4:17Speaker 01

  I think the message is that anyone with some sort of passion or niche can use these online platforms to get their message out, to create content around it, and then hopefully be able to make a living out of it. And what's funny about the term is, yes, we called YouTube creators YouTube creators, but we didn't really use creator economy pre pandemic. So, I mean, this is industry has been around forever. I mean, I don't remember ever calling it the creator economy before the VC boom and the pandemic. We would say maybe like influencer industry, or we had these words that really didn't catch on. And then for some reason, creator economy really stuck.

• 4:53Speaker 02

  New wrapping on something that's been around for a long time that a lot of MCNs years ago were built around. Sounds a little more-

• 5:01Alex Kantrowitz?

  Ad networks for YouTube.

• 5:03Speaker 02

  Yes, yes, exactly. Just fancier wrapping and making it sound bigger by calling it its own economy. But this is something that's been around for a long time, especially, you know, driven out of the initial YouTube CMSs that ad networks and MCNs were built on the backs of.

• 5:21Alex Kantrowitz?

  And so, but there's this promise, right? Of course. Okay, so we have the term, you know, maybe it started in the pandemic. Maybe we were hearing about these influencers. But, and maybe I was part of the problem also because I've written a bunch of stories about this as well. But there was this sense that if you worked as a creator online, you could participate in the economy, just like it was almost as normal or as something that you could expect the most success from, like you would a normal job or a normal endeavor. Is that fair? And was that a little bit overblown? What do you think?

• 5:56Speaker 02

  I mean, I think it's, it's something that can be built towards for a select group of creators, especially if they find ways to diversify their revenue beyond just one platform, or they find other, you know, other revenue streams to complement what they're building online. I think having it be that broad of a promise that it could be- A credible pathway to being a full-time career for a very high volume of people feels like an overpromise. It's more of an outlier, I think, for someone who could individually build a full career on just being a creator than more of the norm. I think there's certainly an increasing amount of opportunities as there's more platforms, as there's more D2C

• 6:37Speaker 02

  options, and there's more ways to monetize. But making it, I think it's more of the exception than the rule that a lot of people who participate on making online content are going to just be solely able to be a full-time creator with no other revenue streams going into it.

• 6:53Alex Kantrowitz?

  So, Kai, how did, I mean, I'm curious if you think this is true, but how did the powers that be, the platforms, the VCs, sell so many people on this idea? I mean, it really, I think you're right, in the pandemic, it also spurred into like, passion economy. But, but yeah, I'd love to hear your perspective on how this thing became so popularized and what, you know, what it actually looked like when it came, when the rubber met the road, were people really able to make a living on their channels and stuff like that?

• 7:26Speaker 01

  So from my perspective, it was really the combination of the pandemic and the rise of TikTok at the same time. So obviously, you know, YouTubers have been making a living for years. You know, YouTube first instituted its ad revenue sharing program in 2007. So this has been a long time in the making, but what happened is that it was harder to break out on YouTube or Instagram because it got really saturated. So you have this combination of people spending a lot of time at home online, and then you have the rise of TikTok, which is minting people left and right and making them go viral and making people with no pre-existing following suddenly have a million followers. I worked with SocialBlade, which is a data analytics provider, and someone put it to me as TikTok really introduced inflation into the greater economy. There are, as of last summer, more than 39,000

• 8:11Speaker 01

  accounts on TikTok that have more than a million followers. So I think part of the promise of anyone being able to find a following was kind of true.

• 8:19Alex Kantrowitz?

  Thirty-nine thousand?

• 8:21Speaker 01

  Accounts on TikTok have more than a million followers.

• 8:24Alex Kantrowitz?

  Wow.

• 8:25Speaker 01

  Compared to thirty-three thousand accounts on YouTube. So YouTube, which has been around for a lot longer, that's still a huge volume of people. And on Instagram, it's about twenty-three thousand accounts. So there are a lot, there's tens of thousands of people that have more than a million followers on these platforms. Of course, that doesn't always translate neatly into how much money you make. So the promise of going viral and reaching an audience became easier with TikTok, because you could post and your video suddenly is in front of all these people on the For You page.

• 8:53Speaker 01

  And then I think VCs and startup founders saw these opportunities to solve real pain points for creators, because, you know, creators can't just go to a bank and say, hey, look, I have a million followers. Give me a loan for X amount, right? Like, there are these real pain points. But what happened is there was just this explosion of founders and everyone's building the twentieth version of Patreon. You know, as of last summer, there were more than forty LinkedIn bio tools and startups. I mean, that's a lot of companies that are doing the same thing.

• 9:21Alex Kantrowitz?

  Can either of you explain to me, and we'll get back to it, because I really want to talk about the earnings here and how they've fallen short of expectations. But Kay, you've started to stir some emotion in me, because that's generally what happens when I hear about LinkedIn the bio startups. So Linktree, uh, yeah, Linktree, which is the premier LinkedIn the bio company. In March twenty twenty-two, so we're not even talking a year ago, raised enough money to value it at one point three, not million, billion dollars. How did that happen?

• 9:58Speaker 01

  So I asked a founder once why there are so many LinkedIn bio startups, and they said, because it's easy to build. So I think that's part of it. And two, it does solve a real utility and pain point, where you can't add more than one link to your Instagram bio. And creators want to show you their, you know, link to their podcasts, link to their merch, and link to all these things. So it's a real issue for creators, but you don't need forty of them. Once you pick your LinkedIn bio provider, you're not very, you know, it's not very likely that you're going to then switch to another service. So I think Linktree had the advantage of just being first. So they're kind of synonymous with it, but I cannot speak to the, to the VC thinking there on that.

• 10:38Alex Kantrowitz?

  One point three billion for Linktree. Yeah.

• 10:42Speaker 02

  1.3 billion to just have the ability to link out to multiple places does seem a little eye catching on the surface. And I think when you're a first mover and it feels like new tech and new something that is going to help drive direct monetization for people who are constantly hunting for new ways to drive monetization, link to my podcast, link to my store, link to my Patreon, link to my event tickets, it can be very appealing. And if you get the right handful of people initially using it and promoting it, then you get that excitement that drives that type of valuation. But the actual utility of it, how easy is it to be replicated? How sustainable is it as certain

• 11:24Speaker 02

  platforms also get stricter with outbound links? Does that continue to evolve? It's something that could be very fluid and fickle, just like algorithms could on the different social platforms.

• 11:34Alex Kantrowitz?

  Right. You can't even link to Mastodon most days of the week on Twitter. So imagine what Elon's going to do to the link in the bio startups.

• 11:41Speaker 02

  Definitely in the crosshair sooner rather than later, I'm sure.

• 11:44Alex Kantrowitz?

  All right. And so getting back to this idea that people can make money and build these big followings. So TikTok, for instance, like you're talking about, did enable people to build large audiences. And then it started with these creator funds. And the creator funds have not really paid out a lot of money. So there's a great report in Fortune a couple of weeks ago, talking about this one influencer, Azure McCannell, who had 713,000 followers and 11 million views in a month. Like, if you're thinking about a media business, that should be enough for a media business, you would imagine. Not only is it a big following, but even an algorithmic

• 12:25Alex Kantrowitz?

  feed, it's something that's attracting a lot of people. Anyone have any guess as to how much Azure made in five months after joining this program, Pulse?

• 12:36Speaker 01

  Two hundred dollars.

• 12:38Speaker 02

  Guessing it would be an underwhelming number.

• 12:40Alex Kantrowitz?

  It's a dollar, yeah, dollar and eighty-five cents.

• 12:43Speaker 01

  No, I thought it would be more.

• 12:45Alex Kantrowitz?

  Yeah, dollar eighty-five. And by the way, the fact that it was a few hundred kind of shows like those were maybe the heyday. So here's just right from the story. In interviews Fortune conducted with seven TikTok influencers, all of whom had followings of at least a hundred thousand, all shared confusion about their enrollment in the program and none reported year earnings exceeding five dollars. So I guess this is like the key question here. So you can build big audiences. You can have an audience. Why has it been so hard for creators to turn that and make a living out of it?

• 13:19Speaker 01

  So I think there's a difference between the platform payments and then the other ways creators make money. Because the creator that you're describing, he could make a lot of money through brand partnerships with those numbers and that engagement. I think where the platforms have really struggled, except for YouTube, which has also had its fair share of issues, is actually paying creators for posting. So Instagram also had a similar situation where they launched reels bonuses. And for some of the biggest creators, they were eligible to earn thirty-five thousand dollars if they hit certain engagement metrics. So the first, you know, the first month, first few months, people are making a killing. And then suddenly they're like, oh, wait, my earnings just dropped. Because they come out with a splash with these programs. Same thing with Snapchat for its TikTok competitor Spotlight.

• 14:02Speaker 01

  It was giving away a million dollars a day. And there were people that were getting checks for like thirty-five thousand dollars for one video. But the problem is these, these programs never stick around. It's a way to draw in users. So I think there's a difference between earning through the direct monetization on these platforms, which just has not historically been super lucrative, with the exception of maybe YouTube, and then earning from brand partnerships, which is the vast, the vast majority of creators earn from some sort of advertising.

• 14:31Alex Kantrowitz?

  Now, Joe, you, yeah, go ahead.

• 14:33Speaker 02

  No, I was gonna say that that perfectly summarizes it. Relying solely on programmatic revenue through any platform is very risky. They're very volatile quarter to quarter. They depend on where the CPM sit. They depend on any changes on the algorithm. It's a nice always on faucet that's been there for a long time from YouTube. It's been there in some iteration on Facebook and Twitter to an extent. Instagram, Tik Tok, I've experimented with it. Snapchat built a nice program for publishers and certain creators would discover on it. But you, if you want to make a living and have something that's a little less volatile, you have to diversify the revenue streams beyond programmatic. It has to be built on brand partnership deals, probably some direct to consumer mixed in,

• 15:16Speaker 02

  where you're pushing your own subscriptions or your other product to complement programmatic being a piece of the pie. But unless you're truly, truly massive, likely on a place like YouTube, to just count on programmatic dollars without the support of brand deals, without the support of D to C or events or anything else, that's another revenue faucet. It's going to be very unpredictable and it could go off at any moment. If the, if the platform changes their direction, if they change the algorithm, if they change their emphasis, if a part of a recession hits. So yes, it has, it has to be diversified. It can't just be programmatic.

• 15:52Alex Kantrowitz?

  Right, and Joe, you're president of Whistle Sports and you do a lot of work with the platforms. So has this been your experience? I mean, like, what has your experience been like in terms of counting on them? And you must work with some independent creators as well. It seems like that's standard for any publisher these days. And you are one yourself, in fact, with a podcast that I listen to all the time, all about the New York Jets. So talk about your, exactly. Yeah, you got it, got to have the therapy with that team. But, you know, you're also doing it, not just advertising, but through a bunch of different means. So, but talk about it from the whistle perspective.

• 16:28Speaker 02

  Yeah, I think what's been key for us for whistle over the last, you know, 10 years or so that I've been there has been from a programmatic standpoint, just from a distribution standpoint, really like decentralizing our approach and not putting all our chips on the table on one platform.

• 16:42Alex Kantrowitz?

  Okay, what is that? I'm hearing programmatic and decentral. Why don't you say that in English?

• 16:47Speaker 02

  So basically, programmatic is the split of the ad sense. We get back from all the platforms on a weekly and a monthly basis. And by decentralizing it, maybe that's the wrong word for it. It's basically like, we do not put all of our content and put all of our chips onto YouTube. We have a YouTube presence. We have a Snapchat discover presence. We have multiple Facebook pages. We have Instagram pages that were eligible for things like the creator fund. Same deal with TikTok. And as new platforms come and go, we test and see if there's anything there. And then, you know, go 90 comes and goes, Quibi comes and goes, but you're able to get some of that while it's still there. So the point is, is don't be one of the companies that builds 25 Facebook pages only that hack the algorithm.

• 17:28Speaker 02

  Then the algorithm changes and all those pages go from making a hundred thousand dollars a week to making eight dollars a week. And then you didn't have anything else going on on YouTube or Snapchat. And that's when you have to, you know, lay off a big chunk of people or totally pivot your entire business. And programmatic is a part of our pie, but the real bulk of what we use to drive our business is our brand business and doing brand integrations and selling pre-roll media across our YouTube channel, across our Snapchat discover slate. That is something that we also encourage creators to do too. Don't just have a YouTube channel. Let us work with you and syndicate your content on Snapchat. Let us work with you to maybe help you get into the TikTok creator fund. So you could turn that faucet on.

• 18:11Speaker 02

  That that's kind of how we've approached it by sort of spreading out and making sure that we don't over leverage basically on one platform. And we encourage creators to do the same.

• 18:21Alex Kantrowitz?

  Now, you're working with professional athletes or is this more like independent sports creators?

• 18:25Speaker 02

  We we've worked with professional athletes before. We do the, we do it more now on on the brand deal basis first, kind of like running their YouTube channel or trying to run platforms for them. Sometimes. You know, if they do have a true library of content, which is rare for a professional athlete, it's much more common for a creator to have a long library of content that can be verticalized and distributed elsewhere. That's where we do the bulk of our work overall.

• 18:49Alex Kantrowitz?

  Okay. So, all right. So I'm hearing from both of you that you can make it as a creator. I agree, obviously, trying to do that on my own in some way. Obviously, the journalism I create is, you could consider it part of this creator economy. It's published online, monetized online. However, it does seem like the people that have been able to do it, they're few and far between. Here's a stat actually from, and we're going to get into this story, but let me just briefly throw it out there from a story from the information where you were, Kaya, about Patreon. And so the story says the number of creators on the site with one or more patrons rose than less than 2%, rose less than 2%, less than 2% last year compared to nearly 40% in 2020.

• 19:34Alex Kantrowitz?

  So clearly, people have been trying this stuff and they're not able to make it on the scale that it was imagined they would be able to. I mean, you also think about Substack, right? Substack can't carry an entire economy filled with newsletter writers. You know, I happen to like it a lot, but there's a reason why they tried to look out for more funding and they couldn't get it. It's just the actual market of folks that are able to do that, do this is limited. There's also a quote from, from my story from Austin Reeve, who's the CEO of Morning Brew. He says, "People only have time to consume so much. So you have to be the best or in the top few in any given space. It's really hard to be the 37th best finance creator." So, you know, obviously,

• 20:16Alex Kantrowitz?

  there's opportunity, but how widespread is this opportunity? And are the statistics we're starting to see now, are they really telling more of the story now that some of the froth is out of the economy?

• 20:27Speaker 01

  I have very mixed feelings about this because I feel like I see one study that says 95% of creators make $1. And then there's another study that says, you know, the average creator in our talent management roster makes $100,000, which is very different. So I feel like we need a US census for creators where we can actually get, you know, really good survey data. And I think a hard part of my job is that a lot of the think tanks and academic research centers and the places we normally rely on for accurate data, they're not tracking the creator economy. And this economy is made up of millions of individuals across the world that all make money in different ways. So it's really hard to answer questions like, is there actually a creator economy class, a middle class?

• 21:11Speaker 01

  Is, you know, how many people actually make money? I mean, anecdotally from my work, I speak to creators at least on a weekly basis. And I am always surprised by how someone with a small niche following can actually make a real living that is similar to their nine to five job. There was a woman, Kimberly Nicole Foster, who runs a YouTube channel. I interviewed her last year. She has maybe around 200,000 followers, so not a huge amount, not in the millions. And she has this niche in black feminism. And she last year was making an average of $25,000 a month, mostly from subscriptions to her Patreon or to her YouTube channel. I spoke with a woman last week who's 19.

• 21:53Speaker 01

  She has about half a million followers on Instagram, a few million on TikTok, and she makes $100,000 a year from brand sponsorships. And she, neither of these women are household names, but they have a niche and an audience. And they make money through various ways. So it's hard. But then I also speak to people who have been a part-time creator for years and can't make it their full gig. So I think there's a lot of variety here, but I think it's not correlated to your follower size. It's not necessarily correlated to what platform you use. It's really about finding a niche and somehow trying to monetize it. So it's hard to really know. Clearly, how many people are making a real living from this, but anecdotally, it definitely is possible and you don't have to be Logan Paul or Charlie DiMaggio to make this a career.

• 22:38Alex Kantrowitz?

  Right. And just to empathize with you on the numbers here. So I was looking for like what the size was when I was writing my story. Have you heard this stat that the creator economy is $100 billion?

• 22:50Speaker 01

  Yeah, all the time. No clue what that.

• 22:52Alex Kantrowitz?

  Oh my God, it's entirely based off of exhaust fumes because I went and it's something that gets picked up everywhere. I get Forbes and Digiday has it and maybe sometimes in sponsored content, but it's everywhere. And the deeper and deeper you go, the more you realize that this number is effectively made up. And you know, if the people who actually came up with this number are willing to talk with me, then I'm willing to hear you out about what your methodology is, but I found it. So I traced it all the way back and it was created with this creator earnings benchmark report that these two companies Neo Reach and the Influencer Marketing Hub put out. And they list their methodology there and I'm reading through the methodology. I must've read it eight times. It just doesn't add up. They include venture funding in the actual number.

• 23:37Alex Kantrowitz?

  And I wrote their head of marketing like three times. I was like, please explain this number to me. Please, let's just talk. Please, very please, just tell me how you came up with that number. Total crickets. And I think there's a reason why that number is really getting popularized in the, in the culture. And, and again, like it's just based off of basically nothing. And I think there are numbers that you can look at. So you look at the VC funding that is going into creator economy startups. Now, of course, VCs are pulling back all the way because of this new era that we're living in that doesn't have zero interest rates anymore. But this is from TechCrunch. So I covered this in my story.

• 24:16Alex Kantrowitz?

  So there were 58 rounds of VC money worth 343 million in last year's first quarter. Then the second quarter was 42 rounds of 336 million. Then you go to 19 rounds worth 110 million in the third quarter. It's a very serious drawdown. And I think that when you ask about whether there's this middle class, and Kai, I'm kind of curious what you think about this because I'm going to make a counterpoint. I think you can see that there, there hasn't been a big enough middle class developing. What's your read on what's going on there?

• 24:51Speaker 01

  So I would add too that the information has a database where we track funding as well. And our data for last year showed that VCs poured about $2.5 billion into US creator economy startups. And that's a 50% drop compared to 2021, which was kind of the peak frenzy. And as you mentioned, all VC, you know, VC investments are, you know, paring back anyway. But that was worse than the 33% drop in venture funding reported by PitchBook in US startups. So you can see kind of a steeper.

• 25:19Alex Kantrowitz?

  So those are real numbers.

• 25:21Speaker 01

  Yeah. So what happened is that this sector was so overhyped in the VC world. You know, earlier we're talking about how there's 40 Lincoln bio tools. I had this conversation with Kirsten Green about a year ago. She's the founder of Forerunner Ventures. And she said, there isn't room for all these startups in the market, but that's part of making the market and seeing what the real opportunity is. So I think this environment now will kind of accelerate that. You know, we probably don't need 50 different versions of Patreon and 40 Lincoln bio startups and a lot of companies that are doing the same thing. So this, you know, and I think VCs just got really excited and were like, well, I need to have a creator economy startup in my portfolio. So why don't I fund, you know, the eighth earnings tracker or whatever it is.

• 26:03Speaker 01

  So I do think that part was overhyped where there was just so much attention and money being poured into it, especially into seed companies that really didn't have a ton of traction. I mean, they had a beta with 30 creators in it. You know, a lot of these products that I was interviewing people about, I was like, how did you raise a seed round from this kind of premiere?

• 26:23Alex Kantrowitz?

  They raised a full round with 30 creators in the beta?

• 26:27Speaker 01

  I mean, I'm not, don't quote me on this.

• 26:29Alex Kantrowitz?

  Oh, you're, you're on, this is on the record, Kyle.

• 26:32Speaker 01

  No, but I mean, but I mean, like a lot of these, a lot of these companies were doing these betas where they didn't even have a ton of creators testing. They had a sample of creators testing the product. So it's not like a lot of these companies went to VCs and said, we have 2 million creators using our product. Like a lot of these companies were going and saying, hey, here's the opportunity we see. You know, here's the overall market. So I think that was part of the problem too, is they were trying to solve these pain points for creators that were real, but then they didn't. There was a disconnect with, and then creators suddenly are like, wait, there's all these tools. I don't even know what to use. I'm just going to use like G suite, you know? So I think there was just an overwhelming amount of products hitting the market.

• 27:17Speaker 01

  I mean, even Patreon, right? It's been around forever and, and their growth has stagnated as well. So I just think there was so much hype around just building these tools for creators, but the companies almost should have gotten more creators on board before raising the funding.

• 27:33Alex Kantrowitz?

  You would think that the VCs would have done their due diligence on that, but that's another story. Joe, what's your perspective on this? Middle class or who do you agree with? Kai or me? Well, that's what I'm trying to say.

• 27:43Speaker 02

  It just depends how you, I guess you define, you know, middle class. I, I think I, you know, from my own personal experience, I've been able to find decent footing on a place like Patreon, but that was, that took a years of doing it away from Patreon and through more like traditional, having your own website and more traditional podcasting and tweeting far too much. It wasn't something that was just kind of a switch. I do think what's important, if you do want to find a footing in the middle class is it's going to be kind of segment dependent. Can you find the right niche? Certain ones I think are probably ripe for the taking to have a really robust middle class and maybe a bigger upper class, certain ones that are overcrowded or get overcrowded too fast, maybe not.

• 28:26Speaker 02

  You know, you've had a huge flood of people who were crypto and NFT influencers and that spikes and then it drops. Now, if you can find something really niche, like a certain segment of art, literature, a specific sports team, for example, like what we do, like there could be something there if you hit it at the right spot, but there's going to be a lot of variance. And again, we'll also come back to how you define, what, what is that middle class, you know, look like and how many different revenue streams do you need to have? And what do their amounts need to be to be considered middle class?

• 28:58Alex Kantrowitz?

  That's right.

• 28:58Speaker 01

  Okay, Alex, I'm going to step in here. I pulled up the story that I was thinking of.

• 29:02Alex Kantrowitz?

  Okay, great, great, great.

• 29:04Speaker 01

  I'm not going to, I'm not going to put this company on the spot, but they raised $3 million in seed funding.

• 29:09Alex Kantrowitz?

  Okay.

• 29:09Speaker 01

  No.

• 29:10Alex Kantrowitz?

  Come on, there's a name in the story. Oh, but you're going to talk about some of your, yeah, do it, do it.

• 29:15Speaker 01

  I'm just using it as an example. So this company raised $3 million in seed funding and they had less than a dozen creators on board. So putting it out there.

• 29:23Alex Kantrowitz?

  Way, way, way too little. I don't know. My VC firm is not investing in that. So Joe, you've done it. You've made it in the middle class. So I mean, you talked a little bit about your, your, what your secrets were, having the website and the social presence and doing it for years before you turned on monetization. What do you have? Like, you have like 2,000 people paying anywhere from $3 to $10 a month. Pretty solid.

• 29:53Speaker 02

  Yeah, I mean, look, it, we had a, for about eight to 10 years, or god, how old am I now? Ever since I graduated college, basically, just having consistent, traditional free content, articles on a website, podcasts that have programmatic ads inserted into them, just through like an ad network, and then a lot of, you know, social promotion on Twitter. And finally, after doing that for a while, I felt that we had a big enough of a base to flip to test the subscription model. And it's resonated, I think, a little more than myself and my co-hosts expected it to. But Patreon, I mean, for whatever other issues they've had, they do make that very easy and accessible to operate for, especially if it's not something that you're dedicating full-time energy into resources to. They

• 30:37Speaker 02

  do, if you have a bit of an audience that you're ready to pour it over, they do make it easy to get up and running quickly and make it relatively seamless to get into a rhythm of having monthly payments, having questions answered and things like that. So again, that took a long time and it was a very specific niche of one very bad football team where, at the time, no one was doing any subscription content. So a little bit of a right time, right place, but also a lot of years of no money and no middle class going into it to actually like build it up is just sort of a side thing of two guys angrily yelling about a football team.

• 31:16Alex Kantrowitz?

  Joe Caparozzo and Kaya Urieff are here with us. We're talking about the creator economy. Whether there is one, okay, there is one. Whether there's a middle class, more debatable. And then who benefits from the illusion that there might be? Why don't we cover that on the other side of this break? This episode is brought to you by AVPoint. Everyone's racing to roll out AI right now. Co-pilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data. And most teams have no single way to see it, secure it, and prove it's under control. That's exactly what AVPoint does. For 25 years, they've been the trusted layer beneath the world's most demanding data, now extended across your entire AI estate.

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• 33:37Alex Kantrowitz?

  And we're back here on Big Technology Podcast with Kaya Yuria from The Information, Joe Caparozzo, President of Whistle Sports. All right, last question about the creator economy, and then we can do a little bit of a ring around the rosy of different social platforms to do hot takes on each one of them. So let's just, I'm just kind of curious, because obviously, someone benefits from this illusion, if it is one, that you can make it on any platform, and that is the platforms themselves, which need quality content from creators in order to survive. And we talked about who's the ones that are really holding up the illusion and not paying out. It is the TikToks and the other quote-unquote creator funds that end up making you work for five months and paying out $1.85. So is that, does that resonate with either of you? I mean, I'm kind of curious if you think

• 34:22Alex Kantrowitz?

  the platforms have sort of gone along and perpetuated this illusion where in truth, the reality didn't quite hold up.

• 34:32Speaker 02

  I think it depends on the platform, right? I think there's always been, for me, whether you're a creator or a publisher, there has been sort of a history of like, we're going to roll out monetization in six months, and then we're going to roll out monetization in 12 months, we're going to roll out monetization in 18 months. And then there could be drips and drabs where, for a short period of time, there actually is true monetization and real testing and funding into original content. I think some have got, obviously, gotten to a very good rhythm of doing this. YouTube and Snapchat in particular, I'm speaking again selfishly as a publisher, where we syndicate a lot of creator and original content on Discover, and that's been really reliable over the last few years. But for other platforms, you know, like TikTok and like Instagram,

• 35:16Speaker 02

  I think we're going to find out in this year, like, are they actually going to consistently put on some type of monetization? Are they going to build their own version of Discover, where content is, vertical content is syndicated, that's a little more long form? And how long can you, you run that timeline to where people get frustrated and go somewhere else? I mean, YouTube does seem like they're getting ready to go full steam ahead on Shorts monetization, that's their version of TikTok. And my guess is that TikTok and Instagram are very aware of that. And if they don't want their creators, influencers, and publishers to put... All their hours or much more of their hours back into shorts, they're going to have to have a compelling monetization story to tell. And it can't just be this is going to come in six to eight months.

• 36:01Speaker 02

  It's going to have to be like, we're going to start flipping this on now and start building and testing with you.

• 36:05Alex Kantrowitz?

  What do you think, Aya?

• 36:07Speaker 01

  Yeah, I think the issue with the one-off programs is it's a great way to get a great headline of like, hey, everyone wrote about how Meta committed $1 billion in investments to creators. But the problem is that dries up and as more creators enter the program, then you get these payouts of $1, right? So I think the real test this year will be if, you know, Instagram follows with ad revenue sharing, similar to YouTube Shorts. TikTok does have a program called TikTok Pulse, which basically allows advertisers-

• 36:37Alex Kantrowitz?

  That's the one that that person made $1.85 in.

• 36:39Speaker 01

  So this is an early product where brands can buy advertisements on the top 4% of content. And then as a creator, you have to meet certain requirements. But if you're in that top 4%, you're eligible for 50% of that ad share. So, you know, Business Insider also had a story about this of people making like pennies to $17 from it. It is an early program and it's quite limited. So I think YouTube Shorts might put the pressure on TikTok to expand that because YouTube, you know, historically has been really good about sharing ad revenue. And that's at least recurring. These one-off programs, like the $1 million a day from Snap, like we all, we all know that's not going to last forever. So it's really about creating recurring revenue streams.

• 37:22Speaker 01

  But I still think the vast majority of creators are going to earn money from brand partnerships and other ways. So it almost makes it a moot point if these platforms are really going to pay or not.

• 37:34Alex Kantrowitz?

  Okay, so let's just do a quick hot or not type of thing about the platforms. And as opposed to like, are they paying out creators? Just kind of kind of curious, why don't we call it a vibe check on, on the social platforms and see where we get? So first of all, let's start with Snapchat. Joe, what's your read on Snapchat these days? Try to keep it like, let's say, a minute or less for each one of these.

• 37:57Speaker 02

  I mean, look, they went through a lot of changes last year. I think they've remained very friendly to publishers and creators for syndicating original content. I'm assuming they're going to put a lot of focus back into that after some of the things that they shed last year. And that makes me optimistic about continuing to work and build with them. And generally, you know, very responsive and open minded to that pool of people who contribute content to them.

• 38:21Alex Kantrowitz?

  Yeah, and their their usage has always been well, they've always grown users pretty well faster than platforms like Twitter, for instance. But the question has been engagement. So Kai, I'm kind of curious what your perspective is on Snapchat, given that lens.

• 38:34Speaker 01

  Yeah, I mean, they've been very good at retaining teens, especially for messaging. I think the problem is, is that once those teens, you kind of grow out of Snapchat, that happened to a lot of millennials. But I think on the creator side, their secret weapon has really been the ad revenue sharing program that they rolled out for stories. So that's something that some creators I've spoken to have started making a lot of money from. And it's a really low lift way where you I mean, I spoke to a creator who posts 100 times a day on Snapchat and earns ad revenue from it. So I think once more people catch wind of that, it might become more of an interesting proposition. But I think their short form video spotlight feature has just not, it hasn't been super relevant for creators after they took, they scaled back the payout.

• 39:16Alex Kantrowitz?

  So speaking of TikTok copycats, what about Instagram? Where do they stand? I mean, they're obviously trying to push reels and it's had mixed success. Let's just go one, two again. Joe, go ahead.

• 39:26Speaker 02

  Uh, look, I'm, we've seen some early testing with reels. I think they're going to have to move quickly to find creative ways to monet, to create monetization programs that are going to mirror what YouTube shorts are doing and the TikTok inevitably is going to do. There's still

• 39:39Alex Kantrowitz?

  Okay, but

• 39:40Speaker 02

  ton of interest, a ton of viewership, a ton of engagement, but the monetization element of it, particularly with some of the volatility on Facebook, I think is going to be key. I think you'd still find a lot of great content and a lot of really good, interesting creators on Instagram, but that pressure will continue to come on to reels, not just like in the spurts that we were talking about, but having some always on thing. Otherwise, why won't that content just get syndicated on shorts or eventually TikTok?

• 40:07Alex Kantrowitz?

  Right. And vibe check, is Instagram cool?

• 40:11Speaker 01

  I mean, I'm a millennial, so I think it's cool.

• 40:16Speaker 01

  I do think reels have gotten a lot better. It's been a slower burn than some of their other copycat attempts, like Stories was, you know, a much faster success. I do think reels is getting better. It's interesting, though, to hear Adam Mosseri, you know, say that they overdid it with video last year, and that anecdotally, I've been seeing a lot of the recommended posts on my feed are photos and memes. So I think they have been going through a little bit of an identity crisis, where one, they were trying to copy TikTok. Now they might be trying to go back to their roots, and, you know, they've been, you know, rolling out some more features, kind of focused on friends. So it seems like they have this tension between creators and the social networks that they've been kind of known for.

• 41:00Alex Kantrowitz?

  And then lastly, TikTok. What's the vibe check on TikTok, Joe?

• 41:05Speaker 02

  Really, really important. Definitely very hot with brands, advertisers, creators.

• 41:13Speaker 02

  Lot of positive, one of the few social platforms, if you put away, you know, obviously, some of the, some of the concerns around it, that generally seems to have a lot of positive buzz about growth, and it's always very common questions. What's your TikTok strategy? What's this? What are you guys thinking about TikTok? Can we have TikToks to complement this campaign? So again, monetization, though, what does that look like? How does that audience? How does that viewership pair with a monetization program?

• 41:39Alex Kantrowitz?

  And, oh, you want to go ahead?

• 41:41Speaker 01

  Yeah. I mean, shorts and reels have not unseated TikTok. They still are very relevant in driving trends and conversation. One thing I've noticed, though, is that they've been slower to have kind of breakout stars again. So it felt like 2021, someone was going mega, mega viral and becoming this household name constantly. We've seen Alex Earl do that recently. I mean, she's all over the news and has been kind of a breakout hit, but we haven't seen that in a while. So it feels like TikTok is starting to get a little bit saturated, but I think in terms of driving the conversation and culture and trends, it's absolutely there, and it's been harder for some of these big tech companies to compete with that.

• 42:18Alex Kantrowitz?

  Okay, last question, yes or no for both you. Creator economy, overblown? Yes or no?

• 42:25Speaker 02

  I will say slightly overblown in some of the billion billion numbers that were thrown around for that that feels overblown in terms of there being opportunities to there have being a middle class actually built out if you can integrate brand partnerships and if you can use multiple platforms. I do think there is an opportunity there. I just, when you start assigning, you know, the hundred billion without the methodology behind it, that sounds overblown.

• 42:52Alex Kantrowitz?

  Kaya?

• 42:52Speaker 01

  I think the VC investments were overblown, but I will say no for the creator company as a whole being overblown.

• 42:58Alex Kantrowitz?

  Okay. All right. Awesome. Well, that will do it for us here on Big Technology Podcast. Thank you to Joe Caparozzo and Kaya Uriah for joining us. Great to have you here. Great to have your perspectives. I learned a lot. Thanks to all of you, the listeners. Great having you here week after week. If you're new to this show, please hit subscribe if you've been listening and you like what you're hearing. Five stars goes a long way on Apple Podcasts and Spotify to help us great get great guests like Joe and Kaya. So if you could do that, that would help the show a lot and make sure that we can produce even better content for you moving forward. Thank you, Nate Guatini for editing the audio. Thank you, LinkedIn, for having me as part of your podcast network. We'll be back on Friday with another news recap show with Ron John Roy and then stay tuned for next week. Dave

• 43:43Alex Kantrowitz?

  Friedberg from the All In Podcast is going to come in and tell us a little bit about what's going on in the news. Maybe we talk about his podcast, but we're also going to talk about a very interesting environmentally focused back that he's been working on. I think you're going to enjoy that one a lot. That will do it for us here. Thanks again for listening. We will see you next time on Big Technology Podcast.

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