The Economics of a TikTok Creator

The CEO of Patreon @jackconte recently pointed out that we're seeing the death of the follower. I took note of this because I remember @nateliason saying the same exact thing at a dinner months ago. The algorithmic ranking concept that Facebook started in the early 2010s has recently been perfected by TikTok (and now all other platforms mimicking ... See more

The closest analog to a short-form, feed-based platform “creator” as a unique job in Scarry’s Busytown is a farmer. More specifically, it’s a sharecropper. TikTok splits 50% of ad revenue with creators who have at least 100,000 followers. Sharecroppers did not own the land they worked; the farmer provided the land and often housing and equipment, o... See more

-Decouple creator payouts from audience demographic: Hank Green writes of the Creator Fund, “people with wealthy audiences don’t automatically make more than people with poorer audiences.” The “radical egalitarianism” of the Creator Fund stems from rewarding creators that generate the highest engagement, rather than those that generate the highest ... See more

-Empower more diverse creators to participate in the creator economy. Our hypothesis is that funding the long-tail of creators can create more long-term business impact than funding top creators who can already monetize in myriad ways and are highly sought after by many platforms.

The final and most recent piece of the creator triad is monetization. Being a creator is hard and often unforgiving work. One study found that reaching the top 3.5% of YouTube channels—which means about 1 million views each month—only nets you $12,000 to $16,000 a year, around the federal poverty line.