The State of Creators 2024 Report is out, and perhaps unsurprisingly, only the top 4% of online creators are making $100,000 or more annually. But is this set to change? There’s a lot more money to be made, if you listen to the predictions. According to Goldman Sachs, the creator economy could be worth half a trillion dollars by 2027.
I’ve summarised the key findings of the report before, but today we’re diving deeper into three of the strategies that are really having an impact for those who are bringing in six-figure incomes. If you’re an online creator with an ambitious revenue goal, here are a few things to consider.
Strategic Partnerships
66% of creators made most of their income from one revenue source in 2022, and that was brand deals. Those who are still trying to make money from ad revenue are struggling, and while platforms have tried to help creators out with direct revenue share compensation, there are few success stories in that area. Programs like the failed TikTok creator fund have made headlines for only paying creators a few dollars for thousands of views.
It’s easy to assume that brand deals are only for celebrities, and that’s a fair assumption. The most highly-paid influencers in the world are mostly household names. But ordinary content creators are making a living with brand deals too, and plenty of them are not well-known outside of their particular niche.
The number of followers a creator has is generally what defines how much they can charge to create brand-centric content, with the standard price for Instagram being around $100 per 10,000 followers, and the average sponsored Instagram post bringing in around $1,300. On TikTok the price per 10,000 followers is lower at around $25, but the average price for a sponsored TikTok video is $2,700, reflecting perhaps the number of high-profile creators with millions of followers on there.
Leveraging Third-Party Platforms
The conventional advice has long been that all online content creators need to own their platform. That is, they need a website or blog where they pay for hosting and control what goes on. Building on social media platforms has long been seen as a dangerous way of doing business. Third party platforms can go bust or, more likely, ban your account overnight. You don’t ‘own’ your following or subscribers on Instagram or YouTube, so you’d better have your own digital real estate.
Six-figure content creators disagree, to an extent. They leverage multi-million dollar platforms like Instagram, YouTube and TikTok all the time, because that’s where the action is. YouTube alone has 4.95 billion monthly active users, and around 122 million a day. Top creators simply can’t afford to ignore that.
So they take a risk, and they acknowledge that. 42% of top creators surveyed admitted they would lose $50,000 a year if they lost access to YouTube. The figure was 38% for Instagram, 37% for TikTok and 36% for Facebook. That doesn’t mean these creators only utilise third party sites, however. As the report states they tend to:
“Deploy lead gen tactics to funnel their audience to their own websites and revenue streams, turning social media followers into customers.”
Using AI
Another interesting statistic is that top earning online creators now tend to use AI around twice as often as other creators, with 29% claiming to use it daily, and 43% weekly. That doesn’t of course, mean that the content itself is AI generated, although in some cases it is. Creators use AI tools for a broad range of tasks, including:
- Recording and transcribing content from videos and podcasts to repurpose as written content
- Analyzing data and statistics
- Using AI to improve headlines and captions
- Managing online communities (including things like automated welcome messages or online chat bots for enquiries)
- Brainstorming content ideas
- Creating a content calendar
- Automating social content
- Generating images
Human generated content is still valuable, and a vital element of authentic content creation and influencer marketing, but using AI for admin and related tasks seems to work for many top creators.
Whether you’re running a full-time online business, a side hustle, or a hobby channel on YouTube, if increasing revenue is one of your goals, these strategies are worth considering.
Frequently Asked Questions
Do online creators have to pay self-employment tax?
Yes, in most cases. In the US, creators who earn income from brand deals, ad revenue or digital products are usually treated as self-employed, so they owe self-employment tax of 15.3% for Social Security and Medicare on their net earnings, in addition to income tax. Creators who expect to owe $1,000 or more for the year generally need to make quarterly estimated tax payments.
Will I get a Form 1099-K for creator income from payment platforms?
Payment platforms and apps are required to issue a Form 1099-K only if you receive more than $20,000 in payments for goods or services and more than 200 transactions in a year, though some states set lower thresholds. Not receiving a form does not mean the income is tax-free. You still need to report all of your creator income on your tax return.
How can creators manage irregular income?
A common approach is to pay yourself a steady monthly amount from a separate business account and let income above that build up as a buffer for slower months. Setting aside a fixed percentage of each payment for taxes and keeping a larger emergency fund than a salaried worker might need can also help. Tracking income by source shows how dependent you are on any one platform or sponsor.
How should full-time creators save for retirement?
Self-employed creators don’t have an employer plan, so they need to set up their own retirement savings. Common options include a solo 401(k), a SEP IRA and a traditional or Roth IRA, each with different contribution limits and rules. A financial advisor or tax professional can help you choose the account that fits your income and goals.
About the author
Contributing Writer, Wealthtender
Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine.
Karen provides copy editing and proofreading services, as well as content creation services, at her website KarenBanes.com.