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A stuntman, a 95-year-old grandmother and a silent comedian have little in common — apart from their self-made wealth. The trio are part of the influencer economy, an ecosystem shared by online content creators, social media platforms, ad agencies and data analytics, which Goldman Sachs has reckoned will be worth just shy of half a trillion dollars by 2027.
It is easy to sneer at online content creation: it isn’t immediately obvious how creative it is to show off extravagant birthday gifts or peel a potato. But this is a sector with blockbuster economics. Unlike other entrepreneurs, from grocers to tech visionaries, influencers need no start-up capex. And while most early-stage start-ups burn through cash, influencers can pull it in from the get-go. Chinese influencer Zheng Xiang Xiang is widely claimed to have earned $18mn in a matter of days by fast-clip product promotions.
An increasing proportion of the wealth created accrues to the content creators themselves. YouTube, which broadcast creators’ videos for nearly three years before paying, claims to have paid out $100bn to creators and media companies over the past four years, largely through sharing ad revenues. Influencers also earn money by marketing brands’ products. That apes much of the strategy in China where less snappily-named key opinion leaders — or KOLs in marketing lingo — are paid to sport watches, clothes and other trinkets.
Rather like traditional entrepreneurship, however, the influencer economy has spillover effects. Whole networks have sprung up around influencers, including managers and support teams. YouTuber MrBeast even has a CFO, who previously held the role at dating app Bumble. Both ad and model agencies have dedicated influencer units.
Some influencers have even created mini conglomerates. Mythical Entertainment, a digital entertainment studio spawned by influencers, claims 76mn subscribers on YouTube and a combined 52mn on half a dozen other sites including Facebook and Instagram. It even took baby steps towards industry consolidation, paying $10mn for peer Smosh — until the latter’s founders bought it back.
Tripwires lurk. Times are tough across the media landscape. Artificial intelligence is a threat: why pay for user-generated slop when you can do it yourself? And social media platforms, on which content creators rely for their existence, have their own issues to deal with. At one point, influencers had to contend with the threat of TikTok being shut down by the US government, although that possibility seems to have receded somewhat. Fortunately, for the platform and for the content creators themselves, fans wield plenty of influence.
