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The deep dive: How Gen Z is changing the creator economy

The deep dive: How Gen Z is changing the creator economy

As a consequence of being born into the digital age, Gen Z understands technology more than any generation before it. Their tech-savvy extends beyond more than just posting selfies and playing video games. Zoomers have used technology to channel their creativity and technical skills to create bona fide businesses.

These skills and creativity offer Zoomers freedom that previous generations didn’t have — the freedom to work wherever, whenever, with whoever. The only tools digital content creators need to earn a living these days are a laptop and a strong Wi-Fi connection (and coffee, lots and lots of coffee). Gen Z much prefers the friendly vibes of a co-working space in Tulum over a stuffy office filled with Boomers.

Last week, we explored how the fashion industry has changed the speed and sustainability of its business model to continue earning the dollars of Gen Z. Today, we’ll be concluding our three-part series with a discussion on how tech companies are changing the way they do business to accommodate the creative passion, fierce independence, and hustler ambition of Zoomers.

The rise of the “influencer”

Some love them, some hate them, some want to kill them, and some want to be them. Whether it’s through vicarious pleasure or jealous resentment, influencers have become just what their name implies. Through the social media platforms they call home, influencers have managed to monetize the likes, comments, and eyeballs their work attracts.

Even the Mark Zuckerbergs, Jack Dorseys, and Evan Spiegels of the world may not have foreseen the power individual content creators now have on social media. Individual users weren’t given a piece of the pie in the original business models of social media platforms. Instead, their habits, behaviors, and personal information were simply aggregated and sold to advertisers. Now, platforms are beginning to realize that offering monetary incentives to content creators is a good way to attract and retain top talent along with their legions of fans.

Earlier this year, Twitter (TWTR) announced plans for its first-ever subscription model for content creators. The Super Follow feature, as it’s called, allows for creators to charge their followers a small subscription fee to access premium content like newsletters and videos. The yet-to-be-launched feature takes inspiration from platforms like Substack.

Last month, Facebook (FB) CEO Mark Zuckerberg announced his company’s plan to pay out $1b by the end of 2022 to creators who make content on Facebook and Instagram. According to statements made by the company, Facebook plans to roll out this new bonus program by the end of the year and will reward creators for hitting certain milestones.

Snap (SNAP) may have been ahead of everyone with its plans to lure talented creators to its popular Snapchat app using monetary bonuses. With the launch of its Spotlight feature last year, Snap claimed it would pay top creators $1m per day. The company may have gotten ahead of itself, though — back in May, Snap revised this claim, stating it would instead pay “millions” per month. As a result, many Snapchat creators are taking their talents to rival platforms like TikTok, Instagram, and YouTube. The moral here is: Gen Z will take your word for it, so don’t back down on promises!

Lights, camera, action!

You can’t talk about the creator economy without mentioning YouTube. Zoomers grew up having their older brothers and sisters show them throwback classics like Charlie Bit My Finger, Chocolate Rain, and the Evolution of Dance. They then raced home from school to catch the latest uploads from early YouTube stars like PewDiePie, Ray William Johnson, and Logan Paul. Now that these Zoomers have come into their own, they are using YouTube to build audiences in ways no one could have ever imagined.

Unlike the aforementioned social media platforms, YouTube has been cutting creators a slice of the pie since the beginning. The video-sharing platform was launched in 2005 and was purchased by Google (GOOG) the very next year for $1.65b. At the end of 2007, YouTube launched the Partner Program, which continues today. This program allows creators who hit certain metrics to monetize their channels with advertisements. The requirements to join the Partner Program have changed over the years — but currently, creators must have at least 1,000 subscribers and 4,000 hours watched in the last year to qualify.

Over the years, YouTube has opened up new avenues of monetization beyond just advertising for its creators. In 2017, YouTube launched its Super Chat feature. The feature allows for viewers of live stream videos to pay anywhere from $1-500 to have their comment pinned to the top of the chatbox or have the creator respond to their comments in real-time.

Last month, YouTube added to this by launching the Super Thanks feature. This feature allows viewers to tip their favorite creators $2, $5, $10, or even $50 as a token of appreciation. These features are a way for YouTube to keep talented creators on its platform and away from competitors like Twitch and Patreon.

The modern-day freelancer

Gen Z has more to offer than just their looks, charismatic personalities, and hot takes. Many Zoomers have put their nose to the grindstone and developed hard technical skills like coding, writing, graphic design, and marketing. Unlike previous generations, Zoomers don’t need to rely on employers to earn a living from these skills.

Instead, Gen Z has discovered that freelancing offers the freedom and flexibility they crave. In 2017, Edelman Intelligence conducted a study that discovered Zoomers to be the most freelance-inclined generation yet. The study found that 46% of Gen Z had freelanced in the last year, with 73% of them having started freelancing by choice rather than necessity.

The shift towards freelancing by Zoomers wouldn’t be possible without platforms like Upwork (UPWK). Upwork is the world’s largest online freelancing platform and connects talented individuals with those in need of their skills. Individuals simply make a profile, upload a portfolio of their work, and bid on projects posted by companies, agencies, or other individuals looking for help. Upwork then takes a percentage of earnings (anywhere from 5% to 20%).

Upwork was started way back in 1998 (when many Zoomers were still waiting to be born) and was originally called “Elance.” It proceeded to raise tens of millions of dollars, culminating in the company’s IPO in 2018. Upwork might not be a profitable company just yet, but last year it pulled in $373m off of $2.3b freelancer earnings.

In a study conducted last year, Upwork found that 36% of Zoomers surveyed had started freelancing since the start of Covid-19, making them about half of the entire freelance workforce. Upwork CEO Hayden Brown thinks freelancing and Gen Z are a match made in heaven, stating that “the younger generations have seen that employment, the traditional employment contract, isn’t what it was in the past, they want the autonomy to build their careers when, where, and how they can on their terms.”

why it matters

Gen Z is a generation of rule-breakers and trendsetters. They aren’t as quick as generations before them to fall into the mold of the traditional 9-5 corporate grind. Instead, they’ve found ways to make a living by leveraging their unique skills, lifestyles, and personalities. And as we’ve learned in this series, companies and entire industries are learning to take Zoomers seriously as they grow into respectable professionals and consumers.