The Economics of a TikTok Creator

As the creator economy has developed, new approaches to monetization have emerged. The framework below outlines the three primary ways creators leverage audience to build wealth: promoting other people’s products, selling their own products, and investing in their audience or alongside them.

3. Creator-friendly business models: Offering more direct monetization models (where users pay creators) can encourage creators to align their content with what end users value, versus creating content that maximizes watch time or virality.

In the end, the creator economy is an attention economy. At its core, the way you succeed as a creator is by maximizing eyeballs on your content. Then you trade that attention for money and try to optimize that conversion, either through ad revenue, integrated sponsorships, or investing that audience on another channel like our hypothetical VC firm... See more

Essentially, creators have to balance the distribution potential of certain platforms with the risk of becoming dependent on them, and monetize by either earning a little off of each fan from mainstream content for a big audience or earning a lot off of deeper connections to a smaller set of fans through niche content.