It’s never been a better time to be an independent creator. Thanks to the internet and social media, people can find creators who make what they love anywhere in the world, and support them to make more.
But things can change fast when your livelihood depends on third parties who might just consider you a product…not a partner.
Almost 20 years ago, Napster and Bittorrent created an audience hungry for free content. Napster may have been shut own, but the appetite for digital content never was. Some say it was fear of that appetite that finally drove music studios into a deal that would change the entertainment industry forever.
The internet ushered in revolutionary changes in society and business, a cycle of disruption, displaced profits, new opportunities, business, intellectual property and consumer clawbacks and consolidation.
If internet technologies and file sharing like Napster was a disruption in the entertainment industry, it was arguably Apple who captured much of the early displaced profit.
File sharing didn’t end with Napster, and Steve Jobs convinced the recording industry he could slow the bleeding.
In 2003, Apple convinced much of the music industry to sell their music catalogs on iTunes. Streaming overtook downloads and now accounts for more profit than physical music sales. Business models are still evolving in this market.
Another new profit opportunity: since Amazon launched its Kindle store in 2007, self-publishing has become a $1 Billion industry. Self-published authors like myself now had access to a whole new profit stream.
Two more factors combined to hasten the current bright prospects indie creators are enjoying via the Internet: YouTube and crowdfunding.
In the last decade, YouTube has compensated creators generating video for their platform to the tune of over $2 Billion. Kickstarter crowdfunders have received over $3 Billion. Patreon was on track to pay creators $150 Million in 2017 alone, and hundreds of Twitch video-game streamers garner 10,000 viewers a month and 250 subscribers to earn over $2,000 a month (hundreds or thousands of streamers may fit in this category).
These new opportunities come with murky business realities and uncertainty. Not only are creators on the hook for taxes on any income they make, there’s no guarantee that income won’t fluctuate wildly or disappear altogether… and they still have to do the creating in the first place. And feed themselves in the process. Still, for many it’s a better option than holding down multiple jobs, or giving up on creating content altogether.
Actors waiting tables is practically a trope. Few authors live on royalties alone. More musicians live off merchandise and CD sales than on record contracts. Ad-revenue-sharing, Twitch and YouTube subscriptions, tips, donations and crowdfunding are powerful new tools for creators.
Broadband internet and file-sharing technology created an awareness of the availability of -and a hunger for- content. Ever since, companies have struggled to fill that hunger and get their share of the profit from it.
An early reliance on independent creators is more likely a side-effect of businesses expanding onto the internet, not a goal of the process. For example, Netflix reputedly transitioned to digital video after seeing the power of YouTube. (Google’s flagship video service YouTube reputedly generated $9 Billion in revenue during 2015).
Netflix began as a mail-order DVD rental company. When it expanded online its popularity took everyone by surprise-especially the owners of the shows that were licensed to Netflix. Those licenses are being revoked, but Netflix used its early momentum -and the cash its subscribers give it- to switch gears into a more conventional version of a studio, creating a library of more original content than re-licensed content.
The same consolidation of business models is happening in crowdfunding. See below. Bottom line: competition online is tightening. The cycle has swung past disruption and the creation of a ‘new normal’ into a period of refinement. Businesses are learning how to maximize their profits and consolidate their control.
How are they maximizing and consolidating? Here’s a few ways:
Twitch’s Affiliate Agreement demands a 24-hour exclusivity window on streaming content. That means choosing between YouTube and Twitch, which limits your audience growth, and though Twitch is the dominant player in video streaming right now, it won’t always be.
There’s a cost-benefit equation every independent creator has to figure out, and continually revisit, is exclusivity is the best choice for them? Does using platform ‘X’ yield them the best benefit?
No matter which online service to use or whether you go exclusive with it, it’s still hard work being an ‘indie’. It means living without health benefits or job security, and some people feel they work too hard, for too little.
Feeding yourself as an independent creator becomes even harder when those third parties -who I contend consider you a product, not a partner- change the rules without warning.
In December 2017 Patreon announced a massive change that many argued would impact $1 and $2 donations: instead of charging Creators for payment processing fees, each individual patron fee would be charged a processing fee.
Some accused Patreon of undervaluing patrons and creators who didn’t generate enough income for the company. Others argued the changes would make it more expensive to support multiple creators, to support creators who made more than one thing per month, or to support creators with a small donation
Patreon walked back the fee processing changes before they took effect, but with this disclaimer:
“We still have to fix the problems that those changes addressed, but we’re going to fix them in a different way, and we’re going to work with you to come up with the specifics.”
…of course, what ‘fixing problems’ means remains to be seen.
Mere weeks after the above Patreon fiasco, YouTube took action to resolve a public relations nightmare: video content that offended advertisers on their platform. They did so with a massive re-vamp of the requirements on creators to receive income through Google AdSense.
The old policy required creator channels to have 10,000 lifetime views to receive AdSense revenue. The new policy requires a total watch time of 4,000 hours in the past 12 months and a minimum of 1,000 subscribers.
There are creators out there who have spent years growing an audience for their work, who feel webetrayed by this massive alteration YouTube -and its parent company Google- have made. I don’t think they have been betrayed: I don’t think YouTube ever promised to be what indie creators want them to be.
A couple common denominators here: Corporations create platforms that independent creators populate with content. Corporations then monetize the platform by selling advertising or by taking a service fee out of subscription fees paid by consumers of the work to enjoy said content.
I don’t think corporations are Evil. Neither do I think they are invested in the careers of the people whose content makes them money. I believe these platforms honestly believe it’s their responsibility to reserve as much of the profit generated from every creator-generated piece of content that they can.
Whatever you think of the policies and practices of Kindle, iTunes, Patreon, Kickstarter, Twitch, YouTube and other entertainment or crowdfunding platforms, here are three things I think you can count on:
- People want inexpensive, easily accessible content.
2. Third parties want to help you share -and profit from- your content.
3. Profit, opportunity and contract language will constantly change.
4. Businesses will seek control of markets and resources to profit.
I don’t think anyone doubts the platforms mentioned in these articles exist to generate revenue, be it by page views, advertisement, subscriptions or direct sales. I don’t think anyone would argue that most of the benefit accrued by the individual creators is a beneficial side-effect, not a long-term goal.
Tying your financial and creative future to any business proposition comes at a cost: creators risk becoming dependent on a platform that can change the way they pay creators at any time. Audiences may not follow you if you jump from one platform to another down the line.
Bandwidth is expensive: few video streamers or producers can afford to host or maintain the equivalent of a YouTube channel or a Twitch stream, which means some creators have no choice but to do their homework and pick their platform.
Authors and musicians have more options, simply because the technical and financial demands of hosting ebook, music or other audio files (such as podcasts) is much less. That’s the boat I’m in: Kindle and Audible allowed me to sell ebooks and audiobooks, and Patreon has allowed me to easily provide rewards to patrons of my work. Patreon angered people by playing fast and loose with processing fees. It cost them the trust of some users.
Many creators lost patrons and a portion of their income, and it happened to me before they reversed themselves. So, while I’m sticking with Patreon for now, I’ve invested time and money to offer my readers and listeners an alternative I control: everything the Patreon platform does is now baked into my own site, ServingWorlds.com.
Hosting your own work isn’t necessarily right, or possible, for you. Every creator in every medium, has to decide which platform and which contract terms will work better for them… and they have to know their options, which are constantly changing.
If you take one thing away from this article I hope it’s this: reflect on where you are, where you want to be, and how you can get there. As you choose your platform pay attention to the trends and always look for a back up plan…otherwise, you risk cutting your own throat.