Wednesday, June 29

Digital platforms, an unequal economy without a middle class

  • Although YouTube, Twitch, and TikTok have introduced monetization avenues to pay creators for their work, only the most popular 1% can make a living from it.

To be ‘influence‘When I grow up, it is already one of the professions that children dream of. And it is not surprising, taking into account that their references are increasingly away from TV and more in Youtube, TikTok The Twitch. However, for the vast majority that dream will remain only in that, since the economic model illuminated by the platforms it continues to be especially unequal and to live off them, a privilege within the reach of the top 1%. “Never let yourself be clouded by the figures that we earn, because that is not reality”, he remarked the famous ‘streamer’ Ibai Llanos.

In recent years, the creator ecosystem has become the “fastest growing type of small business,” according to SignalFire, a ‘boom’ that has led platforms to introduce new avenues of monetization as an incentive to retain its creators. Even so, these payment mechanisms are still insufficient and “they do not allow you to have a minimum standard of living & rdquor ;, he explains Janira Planes, communication director of the Wuolah platform. “That means that there are more and more inequality between creators & rdquo ;.

What do the platforms pay?

YouTube allocates 55% of its income for advertising to creators, who for every 1,000 views get between 2.5 and just over 4 euros. To reach the minimum wage of 965 euros, a ‘youtuber‘should generate monthly (and on paper) more than half a million views of addictive content. Until September of this year, the giant owned by Alphabet (parent company of Google) has brought in $ 20,212 million from ads alone, an all-time high.

“I earn about 50 euros a month, to pay the bills I have a lifetime job,” says content creator Marta Llanos. In the eyes of Social Security, this young woman is responsible for social networks and marketing at an academy in Barcelona; in the eyes of their 8,940 subscribers is a ‘youtuber’ who analyzes current events through videos with social criticism and where she deals from the ‘boom’ of the Squid Game to the absence of a gender perspective in a homophobic comment by Arévalo.

On Twitch, owned by Amazon, the ‘streamers’ earn money through the subscriptions of their followers (ranging from 4.99 to 24.99 euros per month) and the higher this is, the greater the portion that the creator keeps, which can range between 50 and 80% of income. TikTok, meanwhile, launched a fund to pay creators who meet certain requirements, such as having more than 10,000 followers, depending on the virality of each video, which makes their system more ‘democratic’.

An economy without a middle class

The mission of the platforms is to make money; rewarding creators is one way to that end. “It is a fine line, they play between providing payment tools to retain them and so that they do not complain without, in turn, compromising their economic objectives,” says Planes. That doesn’t mean it works. Zach King, one of the most prolific creators of TikTok with 66.3 million followers, explained in a video that after generating more than two million views in a week the platform had paid him about $ 122, far from the equivalent of the minimum salary. “Without the ability to negotiate, the creators only have to use their own networks to make the protest visible,” says Planes, which despite accumulating more than 76,000 followers on TikTok, earns only a few cents.


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♬ original sound – GrahamStephan

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That is why scholars of the digital ecosystem such as the venture capitalist Li Jin have insisted on the need to “democratize opportunities & rdquor; and encourage the emergence of a (now non-existent) middle class among creators, even promoting a minimum wage. While that does not come, creators, even the most influential, need to seek their salary off the platforms. “What I earn on Twitch is only 15% of my income, but the visibility there helps me find other jobs & rdquor ;, explains the veteran ‘youtuber’ and ‘streamer’ Roc Massagué, known as’Outconsumer‘. Thus, in up to 77% of cases the main source of income It comes from advertising or sponsorship deals with brands, according to data from the Influencer Marketing Hub. Only 1% can afford to live off subscriptions as the mainstay of their economic model.

But even off the platforms surviving is difficult. Become the key to the prescription of trademarks, the marketing of ‘influencers’ has shot up 700% in Spain since 2018, according to Infoadex. Although investment in this type of advertising is growing, the ‘micro influencers’ – creators of niche content with a community of between 5,000 and 100,000 followers – have it more difficult. A recent study points out that up to 62.2% of them feel that they do not charge enough for a profession that, more than an aspirational dream, has become an “unsustainable activity”.

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