Were you unable to attend Transform 2022? Check out all of the summit sessions in our on-demand library now! Watch here.
There’s an old truism that if you do what you love, the money will follow. For some influencers, that’s proven to be true; the rise of platforms like YouTube, Instagram, Twitch, and TikTok has afforded creatives the means to share what they love with millions of people and get paid for doing so.
Consider Critical Role: by sharing their home game online, six voice actors were able to turn Dungeons & Dragons from a niche interest into a mainstream sensation. Even those with odd hobbies can make a living on social media if they achieve enough visibility — Netflix recently launched a show featuring baking influencers who specialize in making hyper-realistic cake replicas of everyday items, for example.
The fundamental philosophy behind influencer culture is that if your content is engaging enough, you should be able to make a living by creating it. Per a 2020 MediaKix report, up to 42 million influencers are currently active across TikTok, Instagram, and YouTube. But while creator interests are near-infinite, their opportunities for financial success are not.
Monetization provides limited income — and only for certain creatives
There’s no doubt that influencers with established audiences can make a good living. According to estimates from CNBC, YouTubers who have 1,000 subscribers and generate 24 million views per year can make around $100,000. However, monetization isn’t a given for new creators; users need to have at least 1,000 subscribers and accrue 4,000 “valid public watch hours” over a year just to qualify for the YouTube’s Partner Program (YPP).
MetaBeat will bring together thought leaders to give guidance on how metaverse technology will transform the way all industries communicate and do business on October 4 in San Francisco, CA.
Moreover, making the kind of high-quality content that attracts subscribers requires time and effort — and when an aspiring influencer chooses to create content full time, they lose the financial safety net that a nine-to-five job might have otherwise provided. Those who qualify for monetization might still need to supplement their income to stay afloat if their ad revenue doesn’t deliver enough income.
Some creators might try to bridge the funding gap by offering monthly subscription options to their audiences through platforms like Patreon. However, many mid-level influencers turn to a more lucrative, if risky, option: brand partnerships.
Brand partnerships can provide critical financial support — and undermine authenticity
Today, influencer marketing stands as a $13.8 billion industry. In theory, it’s a perfect partnership — brands want to target audiences with specific interests, and influencers can offer a platform to reach them.
But sometimes, selling airtime can seem to viewers like selling out.
“Using their own social media channels, influencers often give the impression that they have a personal rather than a commercial relationship with the brand and the products they promote,” researchers explained in a study published in the Journal of Interactive Marketing earlier this year.
The study’s writers noted that this trend could pose a problem for smaller content creators because consumers don’t expect them to have the same corporate relationships that a mega-influencer — say, a celebrity — might have.
“If nano influencers disclose a paid relationship, consumers may feel deceived because they expected the post to be a personal recommendation,” they explained. “Thus, consumers’ expectations are negatively disconfirmed, which decreases that post’s trustworthiness and subsequently produces lower evaluations of both the brand and the influencer.”
Brand partnerships have ethical implications, too. Popular YouTube mixologist Greg Titian touched on this issue last December, when he posted a video review of two automated drink-making machines.
“Bartesian has been reaching out to me about doing something about sponsorship for a long time,” Titian said. “And I haven’t replied, like…I can’t use your machine in a sponsored thing because I have to review it, and I can’t review it if you give it to me for free or pay me to review it. I had to pay for this with my own money.”
There’s no doubt that brand partnerships offer an invaluable funding option for full-time creators. However, taking on the wrong brand — or simply featuring too many brands — can backfire if viewers start to view the content as too commercial or inauthentic to the experience they expect.
But how can influencers uphold their authenticity without going broke in the process? Some lucky few might go viral and accumulate enough viewers to generate a living through monetization; however, most will need to balance promotion and authentic content to stay afloat. The risk of audience alienation is perpetual and unavoidable; one poorly-handled post could drive away valuable viewers for good.
But what if content creators not only had the means to embrace authenticity but the chance to be paid for staying true to their audiences? SocialFi — cryptocurrency-empowered social media — may just give content creators the opportunity they need to thrive without relying on brand partnerships.
SocialFi could empower creators to deliver authentic content
SocialFi puts a DeFi spin on social media engagement. On crypto-empowered social networks, users can earn tokens by creating or engaging with content; over time, these social activities can translate into substantial real-world earnings if a creator is popular enough.
Though SocialFi is a relatively new concept, it doesn’t feel out of place — if anything, the idea represents a natural next step in platform advancement. Rather than asking consumers to learn new behaviors, SocialFi apps would simply monetize the activities users already engage in every day.
The movement has already begun; last fall, Twitter started to allow Bitcoin tipping for creators. Around the same time, Binance Smart Chain announced that SocialFi would be a significant area of focus for its $500 million investment program. Solana Ventures, an incubator focused on developing innovative Solana-based apps, similarly shared its intent to award $100 million in funding to Web3 social startups.
The importance of these advancements for content creators can’t be understated. If SocialFi achieves mass adoption, creators could leave ethically-challenging corporate partnerships behind and rely on their audiences for funding.
Audiences, for their part, might take a more active role in empowering their favorite creatives to provide authentic content. Consumers are undeniably willing to do so — just look at Patreon’s latest participation numbers. Today, the creator-funding platform hosts more than 6 million active subscribers who have collectively delivered over $2 billion to creators.
Or, consider viral examples like author Brandon Sanderson’s 2022 Kickstarter. In just 35 minutes, Sanderson’s campaign to fund four new books blew past its $1 million goal. As of this writing, the campaign had topped nearly $35 million.
The reality is, if people want specific content, they’ll do what they can to help the creator produce it. SocialFi could provide digital creatives with the means to deliver content without risking audience disengagement by relying on ads and partnerships. This is the next step in social media evolution — SocialFi can ensure that, for creators who share their interests with the world, the money will follow.
Sakina Arsiwala is a co-founder of Taki.
Welcome to the VentureBeat community!
DataDecisionMakers is where experts, including the technical people doing data work, can share data-related insights and innovation.
If you want to read about cutting-edge ideas and up-to-date information, best practices, and the future of data and data tech, join us at DataDecisionMakers.
You might even consider contributing an article of your own!