Observed Signal · Jan 11, 2023 · Market Analysis · Source: CMSWire · Impact: 2/5 · Sentiment: Negative
The Creator Economy Was Way Overblown
The creator economy is facing a sharp correction after years of hype, according to CMSWire contributor Alex Kantrowitz. Influencer programs are shutting down, investment is drying up, and worsening economic conditions are squeezing creators and the platforms that serve them. The article highlights that online content creation remains viable mainly for top creators, and the expected middle class has not emerged. Funding for creator-focused startups dropped from 58 rounds worth $343 million in Q1 2022 to 19 rounds worth $110 million in Q3 2022, per TechCrunch. Morning Brew CEO Austin Rief predicts most creator-tool businesses will fail this year, noting that 99% of value goes to the top 0.1% of creators. Substack, where the author publishes, struggled to raise a round and eventually gave up in 2022. The article concludes that the era of outsized valuations and overblown predictions for the creator economy is likely over.
Highlights the downturn in creator economy funding and platform viability, with implications for influencer marketing and creator-focused advertising technology.
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Key Takeaways & Evidence Grounding
- Funding to creator-focused startups fell from 58 rounds worth $343 million in Q1 2022 to 19 rounds worth $110 million in Q3 2022, according to TechCrunch.
- Morning Brew CEO Austin Rief predicted most businesses building tools for creators will go under in 2023.
- Substack struggled to raise a funding round and eventually gave up in 2022.
- Industry predictions valued the creator economy at $104.2 billion, a figure the article describes as fanciful.
- Facebook announced it would shutter its Substack rival Bulletin by early 2023.
Connected Companies & Entities
4 Entities mapped“Austin Rief, chief executive officer at Morning Brew, said it's really tough to be the 37th best finance creator....”
“I’m doing it here on Substack, a platform that struggled to raise a funding round, and eventually gave up, last year....”
“Funding to creator-focused startups went from 58 rounds worth $343 million in last year’s first quarter, to 42 rounds worth $336 million in ...”
“As algorithmic feeds like TikTok’s gain prominence — elevating the best content — earning predictably as a content creator will become harde...”
Ontology Mapping & Concepts
Related Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
OAAA Launches Programmatic Center of Excellence for DOOH
AI is pushing advertising back into physical spaces due to declining trust in online content, the rise of AI answer engines that bypass websites, and the growth of agentic AI. Out-of-home (OOH) and digital out-of-home (DOOH) advertising are gaining renewed relevance, with US OOH revenue up 10.7% YoY to $3.16B in Q2 and DOOH up 18.5%, representing nearly 40% of category revenue. To guide this evolution, the OAAA has launched a Programmatic & Automation Center of Excellence led by COO Patrick Dolan, focusing on standardization, workflow automation, agentic AI, reporting/attribution, and omnichannel/retail media integration. The initiative aims to automate both programmatic and static OOH processes, addressing friction points. However, this trend raises concerns about consumer opt-out options and the over-commercialization of public spaces, as noted by Ezra Klein.
Morning Brew Acquires Express Checkout Newsletter
Morning Brew Inc., the business media publisher owned by Axel Springer, has acquired Express Checkout, a creator-led media brand focused on the consumer packaged goods (CPG) industry. The all-cash deal, whose terms were not disclosed, gives Morning Brew 100% of Express Checkout's intellectual property. Co-founders Nate Rosen and Jenna Movsowitz will join Morning Brew full-time. Express Checkout started as a weekly newsletter covering CPG and e-commerce. This acquisition continues Morning Brew's strategy of bringing independent creators and their audiences into its portfolio.
Threads Tests Substack Newsletter Integration for Creators
Threads is testing a new feature that would allow creators to link their Substack newsletters to their profiles. The discovery was made by app researcher Alessandro Paluzzi, who found an option for 'Newsletter – Substack' under the 'Featured' section in profile settings. This move would enable writers to gain new readers via Threads, while the platform benefits from more engaging content and discussions. The feature is still in testing, and it's unclear if it will offer full functionality like previews or analytics. This integration is part of a broader trend of social platforms strengthening ties with newsletter and podcast creators.
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