Creator Economy Could Reach Half a Trillion Dollars By 2027

The pandemic created a ripple effect in a number of different sectors and industries, but the aftermath wasn’t quite so dire for certain niches such as the creator economy. Creators benefited greatly from the pandemic because of the fact that this is the sort of thing that could potentially end up making more people willing to try out their content. This resulted in a massive explosion within the creator economy, with Goldman Sachs recently revealing its true potential.

With all of that having been said and now out of the way, it is important to note that the creator economy is currently valued at around $250 billion or so. This number includes a combination of how much money influencers earn as well as how many ad dollars they generate for the platforms that they are posting their content on.

Brands are also spending upwards of $6 billion a year on sponsored content that is provided by creators, and the long term prospects of this industry are also looking quite positive with all things having been considered and taken into account.

Another massive reveal that can be seen in this report is that the value of the creator economy is slated to nearly double by 2027. This would bring the total value of creator led content to nearly half a trillion dollars within four years, or $480 billion to be precise.

Due to the rising value of the creator economy, it is expected that most major content platforms will be increasing their investments into short form content since this would make them more appealing to creators than might have been the case otherwise. For example, Instagram Reels brought in about 4% of the company’s total revenue in 2022, but this proportion is expected to grow to 23% by 2027.

This would bring the total ad revenue brought in from Instagram Reels up to $20.5 billion, which is an over tenfold increase from the approximately $1.8 billion that short form content brought in for the platform back in 2022.

A similar trend will be seen with YouTube. The streaming video juggernaut received 2.5% of its 2022 revenue from YouTube shorts, and based on current predictions it is estimated that this will hit 26% by 2027. This will increase YouTube’s revenue from shorts from $750 million in 2022 to a whopping $11.6 billion in 2027.

This report also indicated that the vast majority of current creators are either Millennials or Gen X-ers. 45% of US based creators hail from the Millennial generation, while 26% are Gen X. Interestingly, just 15% of content creators who are currently living in the US said that they were Gen Z, although this proportion will grow dramatically in the coming years as Gen Z grows older and starts to enter the creator economy.

Most of these data points are encouraging, but in spite of the fact that this is the case some are less so. Data procured from PitchBook suggested that VC funding going towards creator owned companies is declining. It hit a record high of $7 billion in 2021 before decreasing to $4.3 billion in 2022, and it will be interesting to see if the trend spirals downward any further in 2023.

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