Social media creators turn to subscription apps due to increasingly competitive, volatile content economy
Patreon CEO Jack Conte
Social media creators are turning to monthly subscription services to generate revenue directly from their followers in an attempt to find a stable source of income in an increasingly competitive and volatile market.
The creator economy peaked in September 2021, according to research published this month by the Bank of America Institute. While the average monthly income for content creators has increased over the past three years, a typical, full-time U.S. employee makes five times as much in monthly income on average.
“This suggests that it’s rare to earn a full-time wage in content creation — let alone get rich,” said the research, which was also conducted by the Bank of America Institute, a think tank that conducts its research using Bank of America customer data.
Analysts at the Bank of America Institute attribute this to a slowdown in paid partnerships, a more competitive market for creators, a decline in online viewership since the pandemic and a concentration of paid partnerships among the top creators.
While internet virality is unpredictable, turning content creation into a full-time career requires meeting certain financial needs, like the ability to pay monthly bills, content creators told CNBC. As a result, creators are looking to diversify their revenue streams, and in addition to paid partnerships, many content creators are increasingly looking to monthly subscription platforms like Substack and Patreon for consistency in their monthly income.
Substack and Patreon have emerged as attractive options because they enable creators to charge their followers directly for their content. Creators can offer their followers different tiers of subscriptions for monthly fees, with each tier including different perks. Since its launch in 2013, Patreon has paid creators over $8 billion, while Substack claims to host more than 4 million paid subscribers.
On TikTok and Meta’s Instagram, creators have to navigate algorithmic models that control when their content is shown, making income from those apps highly volatile. Earnings can fluctuate dramatically, spiking or plummeting based on how these platforms choose to promote their content.
“I can’t rely on that to be what pays my bills,” said Molly Burke, a creator with more than 4 million followers across her social apps. “As an entrepreneur, as a business owner, as a creator, I have to figure out how I’m going to sustain this as a career for as long as possible.”
Molly Burke, a creator known for her videos about living with blindness and navigating daily life.
Social media platforms increasingly rely on algorithms to decide what content users see, based on their past interactions and preferences. These algorithms analyze user behavior to create personalized content feeds, which often prioritize posts that are likely to generate engagement, such as likes or shares.
As a result, many creators feel pressured to make content that caters to the algorithm, even if they believe it lowers the quality of their work, content creators said.
“It ebbs and flows,” Burke said. “Sometimes my TikToks are popping and I’m getting all the views, and then that algorithm just dips for a bit.”
While nearly half of creators work full time, most rely heavily on brand deals for income, with more than two-thirds having brand partnerships as their primary revenue source, according to a separate study by influencer marketing agency NeoReach. The study found that more than 48% of creators earn $15,000 or less annually, even as the global influencer market reached $21 billion in 2023. There are more than 50 million content creators worldwide, Goldman Sachs said in April 2023.
Burke, a creator known for her videos about living with blindness and navigating daily life, has been producing content on the internet for five years. While it’s not her biggest income stream, she uses her Patreon revenue to help cover essential expenses, including rent.
“I feel extremely lucky and grateful that it is a revenue stream that I can rely on, that I know at the bare minimum I can get my rent covered this month,” she said.
Subscription platforms like Patreon address this by allowing creators to bypass the algorithm entirely, connecting directly with their most loyal fans who are willing to pay for exclusive content.
“Membership alone is a huge business for creators,” Patreon founder and CEO Jack Conte said in an interview with CNBC. “It’s creating predictable, reliable, huge sources of revenue for creators at a degree in scale that we’ve never seen before.”
Zach Kornfeld and Keith Habersberger of the Try Guys
JD RENES
The Try Guys, a comedy group known for their challenge-based videos, have 8 million subscribers and 2.7 billion views on YouTube, but in May, they announced the launch of their own streaming service called 2nd Try. The group moved most of its new videos behind a $5-a-month paywall, where subscribers can watch the new content without ads.
In the three months since launching 2nd Try, the company said it is on track to reach profitability.
“We needed to build something that we could at least have some more consistency with,” Try Guys co-founder Keith Habersberger told CNBC.
Chris Martin of Coldplay performs live at San Siro Stadium, Milan, Italy, in July 2017.
Mairo Cinquetti | NurPhoto | Getty Images
Astronomer‘s interim CEO said in his first public comment since unexpectedly taking over the role on Saturday that he hopes to move the tech startup past the viral moment that captured national attention last week.
Pete DeJoy was appointed to the top job due to the resignation of CEO Andy Byron, days after he was caught on video in an intimate moment with the company’s head of human resources at a Coldplay concert. Astronomer said over the weekend that it would begin a search for a new CEO.
“The events of the past few days have received a level of media attention that few companies — let alone startups in our small corner of the data and AI world — ever encounter,” DeJoy wrote in a LinkedIn post on Monday. “The spotlight has been unusual and surreal for our team and, while I would never have wished for it to happen like this, Astronomer is now a household name.”
Byron was shown on a big screen at the concert in Boston on Wednesday with his arms around Chief People Officer Kristin Cabot. Byron, who is married with children, immediately hid when the couple was shown on screen. Lead singer Chris Martin said, “Either they’re having an affair or they’re just very shy.” A concert attendee’s video of the affair went viral.
DeJoy helped start Astronomer in 2017, according to his LinkedIn profile, and had been serving as chief product officer since earlier this year.
In May, Astronomer announced a $93 million investment round led by Bain Ventures and other investors, including Salesforce Ventures.
“I’m stepping into this role with a wholehearted commitment to taking care of our people and delivering for our customers,” DeJoy wrote. He added that “our story is very much still being written.”
Astronomer is commercializing the open-source data operations platform Astro. DeJoy wrote that customers “trust us with their most ambitious data & AI projects” and that “we’re here because the mission is bigger than any one moment.”
Dylan Field, co-founder and CEO of Figma Inc., after the morning sessions at the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 11, 2024.
David Paul Morris | Bloomberg | Getty Images
Design software company Figma on Monday published an updated prospectus for its initial public offering.
The company said it expects to sell about 37 million shares at $25 to $28 each. That would generate as much as $1 billion in proceeds, between the company and selling shareholders.
The IPO could value Figma, led by co-founder Dylan Field, a fully diluted valuation of $14.6 billion to $16.4 billion. Field plans to sell 2.35 million shares, which could be worth as much as $65.8 million.
In a 2024 tender offer, investors valued the company at $12.5 billion. In 2022, Adobe had agreed to acquire Figma for $20 billion, but the deal was scrapped after regulators objected.
The flow of technology companies joining U.S. exchanges has slowed since late 2021. Concerns over inflation and a recession made some investors less interested in backing fast-growing but money-losing companies.
But a few technology stocks have become available in recent months. CoreWeave went public in March, and Circle and Chime shares started trading in June.
Figma filed to go public on July 1, announcing plans to trade on the New York Stock Exchange under the symbol “FIG.”
On Monday, it provided preliminary results for the second quarter, showing $9.0 million to $12.0 million in operating income on $247 million to $250 million in revenue. That would imply year-over-year revenue growth of 39% at the low end and 41% at the high end. Growth in the first quarter exceeded 46%.
During the second quarter, Figma added clients and expanded business with existing ones. The company’s operating margin would be ticking up to 4% to 5%, up from 3% in the same quarter a year ago, based on the preliminary results.
Figma said it has authorized the issuance of “blockchain common stock” in the form of “blockchain-based tokens.” So far, though, Figma said it isn’t planning to issue this type of stock. In July, Figma disclosed investments in a stablecoin and a Bitcoin exchange-traded fund.
Mike Krieger, a co-founder of Instagram who is now chief product officer of artificial intelligence model developer Anthropic, has joined the board. Luis von Ahn, co-founder and CEO of Duolingo, is also joining the board, according to the filing.
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