The Creator Economy: China to the rescue?

The Creator Economy has been “on approach” since the 1990s. From the beginning, there was plenty of optimism. Surely, a broad, distributed, inclusive economy would be an irresistible consequence of the digital era.

Photo by Asso Myron on Unsplash

The problem is that it’s not an economy until money changes hands. It’s not an economy until people making content are also making a living (or something like it).

And money was not changing hands.

This turned out to be the cruelest joke of the digital era. Everyone was now empowered to make content but, no, almost everyone had to keep their day jobs.

Someone was making a fortune, but it never seemed to be that kid turning out brilliant Fanfic or YouTube videos. No, she had to keep working the Drive-thru window at Wendy’s. She got to wear the paper hat of disappointed dreams.

The economics are relatively clear. As long as creativity is a part-time gig, it remains an amateur activity. Only occasionally will it improve, scale, recruit. Almost never will it triumph. Only rarely will it serve a larger audience or cause.

Pity. That kid in the paper hat could have been a major contributor to American culture. A stalled Creator Economy impoverishes us all.

The economics especially matter to kids who grow up outside the magic circle of privilege. No summer camps for them. No enrichment programs. Sometimes no reliable education of any kind. Money comes early or, too often, talent can’t achieve lift-off.

So I was thrilled to see the opening line of Keith Teare’s recent post.

Suddenly the prospect of making real money from individual effort appears in reach.

Why has it taken so long? I’ve argued that it’s partly the fault of the “gift economy” idea, the one that sends wealthy members of the academy into a frenzy of virtue signalling (“Listen unto me as I sing the praises of a great flowering of human creativity!”). (Here’s a fuller version of the argument: Screw the Gift Economy: a reply to Clay Shirky.)

It’s also true that this movement did not find a champion. This despite the fact that the person who build this ecosystem could reasonably hope for Jack Dorsey-scale celebrity and the undying gratitude of all those people who no longer had to wear the paper hat. But no one like this emerged.

That they didn’t is, I think, clear.

Why they didn’t remains a mystery.

The moment that Andreessen Horowitz invested in Rap Genius, it became clear that some part of the digital world was paying attention to the opportunities erupting in American culture. But this was, I guess, the exception that proved the role. Facebook, Google, Twitter and Snap choose not to play, and the Creator economy remained moribund.

For some reason, capitalism was not acting like capitalism. There was an enormous opportunity to make and capture value. But, no, we couldn’t quite see our way clear to making it happen. As Cowen and Tabarrok argue at Marginal Revolution there are, usually, “markets in everything.” The invisible hand is never still. But in this case not so much. Apparently we suffered a failure of the imagination. Apparently, this opportunity would remain a disappointment until the Chinese showed us the way:

I give you two heartening paragraphs from Yunan Zhang’s dazzling piece.

Executives at Facebook, Twitter and Snap recently realized that if they don’t help the people who produce videos and other content for their apps make money, these creators will take their talents, fans and potential revenue streams somewhere else.

In China, mobile video apps figured that out six years ago. That’s when Kuaishou, which started as an app for teenagers uploading 8-second videos to share with friends, overhauled its product so the teens could also stream themselves live and be paid directly by their fans via tips. That move propelled Kuaishou (pronounced “kwai-show”) to a public market capitalization of $170 billion after an initial public offering in Hong Kong last month. Hurst Lin, a venture capitalist who sits on Kuaishou’s board and whose firm’s early $40 million investment in the company is now worth around $15 billion, told The Information in an extended interview that Kuaishou’s move to tipping wouldn’t have happened if not for a desire for “revenge” against a rival.

This article identifies a shift to tipping (a tipping to tipping?) but not how tipping is working on the ground, in the lives of people who are creating those 8 second videos. These details will be fascinating. I am also looking forward to moving photos of Creative economy graduates throwing their (paper) hats in the air.

Packy McCormick warns that Creator Economy innovations have a troubling duality. “Each feels simultaneously like a potential fad and a nascent revolution.” We don’t have a clear shot. But at least we can now see that tipping is perhaps the innovation we need, the precedent, the proof of concept. Let’s bloody hope so.

Once this Creative Economy arrives, we make good on the early promise of the 1990s. We can complete the “disintermediation” we talked about so endlessly. We will see all the things that markets supply, the improvements of taste, skill, commitment, and accomplishment. We will now have creators who can afford to fail. Tipping gives them a cushion, savings, a place to land.

An economic infrastructure will give culture new possibilities and the real flowering of human creativity.

Last notes:

We can hope to get some of the secrets of the creator economy from a forthcoming book called Creator Culture, edited by Stuart Cunningham and David Craig, and available for preorder on Amazon here: https://www.amazon.com/gp/product/B08L9KNYZS/ref=dbs_a_def_rwt_bibl_vppi_i1. (Thanks to Sam Ford for the head’s up on this book.)

I'm an anthropologist & author of Chief Culture Officer. You can reach me at grant27@gmail.com.