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What the “Creator Economy” Promises—and What It Actually Does – The New Yorker

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A man sits at a desk in front of a computer and a microphone in low blue and purple light.
In contrast with ad-based arrangements, creators can get paid by their individual viewers, who might buy subscriptions, send tips, or crowdfund new projects.Photography by Sutipond Somnam / Shutterstock

The influencer is a fading stock character of the Internet’s commedia dell’arte. Often a conventionally attractive white woman, she shows off her aspirational life style via social-media channels. She accrues a large following, and then makes a living by getting companies to sponsor the content of her glamorous life. The cliché of the influencer emerged, during the twenty-tens, from multimedia-rich platforms like Instagram and Snapchat, where the goal was to forge as curated and polished an image as possible. Influencers were social-media users as celebrities, with much of the vanity and purposelessness that the comparison implies. By now, the connotations of being an influencer are mostly negative—edited selfies, vapid captions, faux relatability, staged private-jet photos, and unmarked sponsorships. Accordingly, social-media platforms are embracing a new buzzword as a successor: “creator.”

“Creator” is a term with a more wholesome air, conjuring an Internet in which we are all artisanal blacksmiths plying our digital craft. But what, exactly, the word implies beyond that is up for debate. According to Taylor Lorenz’s reporting for The Atlantic, the term was originally marketed by YouTube, as early as 2011, as an alternative to vocabulary like “YouTube star,” which seemed to imply that only a few famous figures could succeed on the platform. But it’s now used to describe practically anyone who is producing any form of content online. TikTok users are “TikTok creators.” Members of the invitation-only real-time voice-chat app Clubhouse are “audio creators.” OnlyFans, a marketplace mostly used for pornography, hosts “adult-content creators.”

Even proponents of the so-called “creator economy,” the lattice of new platforms and tools meant to serve creators, can’t quite agree on what the term means or whom it includes. Its rise has sparked a semantic debate that tends toward the solipsistic. “I think all influencers are creators; maybe not all creators are influencers,” Nicole Quinn, a partner at the venture-capital firm Lightspeed Venture Partners, told me. Lightspeed’s creator-economy investments include Cameo, a platform best known for custom video messages that celebrities sell to fans, and Outschool, a marketplace for online classes. For Quinn, the difference in terminology comes down to success: influencers are already famous; creators are striving to be. Li Jin, the founder of the creator-economy investment firm Atelier Ventures, instead defined creators in terms of revenue. “Anyone whose fame stems from online channels, if they are able to earn income through that influence, I consider that to be the creator economy.”

Despite its vagueness, “creator” is being adopted as a byword for a new generation of social-media spaces purportedly designed to support content producers in new ways. Where the ad-driven platforms Facebook and Twitter profit from our data and attention without giving much back, the likes of Clubhouse and OnlyFans promise to deliver a larger share of value to users by allowing for what Quinn, of Lightspeed, calls “direct monetization.” Instead of the company’s selling ads based on over-all engagement, creators can get paid by their individual viewers, who might buy subscriptions, send tips, or crowdfund new projects. The word “influencer” emphasized a person’s magnetic effect on her followers, a nebulous charisma easily turned toward marketing. “Creator,” by contrast, stresses that everyone posting on social media is producing something, pitching in to the collective effort of making user-generated platforms compelling and thus profitable. This idea has proved highly marketable: the creator economy has reportedly seen $1.3 billion in investment funding in 2021 thus far, nearly three times the funding it received in all of 2020.

Creator-economy businesses have devised various revenue models as alternatives to advertising. Subscription-driven platforms like Patreon, Substack, and Buy Me a Coffee charge a percentage of users’ income in return for publishing and paywalling their content. Apps like Linktree, Beacons, and Feedlink offer a service that, for a monthly fee, expands the Web site links that sit in the bios of social-media accounts, directing fans to a creator’s various content channels. Marketplaces for non-fungible tokens (N.F.T.s), like Foundation, Rarible, and SuperRare, allow creators to sell expensive digital-art objects in exchange for commission fees. On Twitch, a site where users can live-stream content like video games, and Heygo, a streaming site that provides a virtual proxy for travel, viewers can access video streams for free, with the option to send tips to the hosts. According to Quinn, March of 2020 was the “key inflection point” for this burgeoning economy, as the increased appetite for digital content and the loss of jobs in other industries during the pandemic prompted more people to try their luck as creators.

In some ways, the creator economy does appear to give more agency to the user. Rather than trying to game social-media algorithms, creators can theoretically rely on more dependable income from supporters. They can choose which kinds of work they take on, whether it be newsletters, livestreams, or audio chats. “They don’t have to care about fighting against the current of the platform,” Sam Yam, the co-founder of Patreon, a pioneer of the creator economy, said. In Yam’s mind, earning a living as a creator is an evolution of the so-called gig economy facilitated by companies like Uber and TaskRabbit. Followers are paying for access to someone’s unique talent or voice. “You care about the individual more than just the task that needs to be done,” Yam said. “It’s value exchanged for creativity.” The model promises a more human and less automated interaction. What were once called followers—the anonymous numbers racking up on a profile page like so many fungible eyeballs—are now customers, supporters, and patrons.

But this emerging field, in many ways, resembles a gig economy for digital content. Participants are still precarious workers, relying on the whims of corporations for their livelihoods. Much like an Uber driver or a twenty-tens Instagram influencer, the creator is responsible for her own marketing, health care, and tax contributions. She makes money for the platform that hosts her without receiving the legal and financial protections of employee status, or the stock options typically given to the platform’s engineers, designers, and managers. Meanwhile, the social-media giants are developing their own version of the creator economy in an attempt to keep users from fleeing to newer, smaller platforms. Last year, TikTok launched a Creator Fund to pay its users directly for popular content. Snapchat launched a similar program called Spotlight, which offers creators millions of dollars of compensation a month. This past week, Facebook, which owns Instagram, announced that it would pay out more than a billion dollars to users across its platforms by 2022.

Anshuman Iddamsetty, a former podcast producer who now runs a Patreon focussed on erotic self-portraiture, and who uses the pronouns “they” and “them,” told me that they make an adequate living from that account and an OnlyFans page. But they said that there’s a gap between the platforms’ message that anyone can “build an independent creative career,” as Patreon’s Web site touts, and the reality of being a solo entrepreneur. “Patreon doesn’t suddenly, magically make the act of creating your deliverables easier,” they said. Ambiguous guidelines can give platforms the power to block users or types of content at will; Patreon does allow some forms of adult content, but Iddamsetty, who describes themself as a “fat erotic artist,” has run into unexpected barriers. Creator-economy hype is relevant “only if you’re a certain kind of creator with a certain kind of product,” they said.

Even Yam, of Patreon, recognizes the limitations of the burgeoning field. He anticipates a future in which both the social-media giants and the creator-economy brands are avoidable altogether. Each creator will instead have her own custom-built platform, “their own world top to bottom,” from the underlying technology to the published content—an “ownership economy.” For the time being, though, the bulk of users will continue to rely on the preëstablished attention economy for the bulk of their digital consumption. “Facebook, Instagram, YouTube, those are just as dominant as ever,” Jin said. “Today, no one finds a person on Patreon; you go there after you’ve found them.” In other words, to be a creator, you still have to be an influencer after all.


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The rapid growth the U.S. economy has seen is about to hit a wall – CNBC

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A National Park Service worker replaces a flag at the Washington Monument which reopened today following a six month closure due to COVID-19 safety measures, in Washington U.S., July 14, 2021.
Kevin Lemarque | Reuter

The U.S. economy is expected to post another roaring growth spurt in the second quarter, before a slow and steady dose of reality starts to sink in.

Gross domestic product is projected to accelerate 9.2% for the April-to-June period, according to a FactSet survey. The Commerce Department will release its first estimate for second-quarter GDP on Thursday.

In a pre-pandemic world, that would have put annualized growth at its fastest level since the second quarter of 1983. However, the current circumstances and the outsized policy response they generated make this merely the third straight quarter of GDP that sits well above the post-Great Recession trend.

Things are about to change, however.

The economy is creeping back toward normal, the open checkbook from Congress is about to get tighter, and millions of sidelined American workers will be returning to their jobs. That means a gradual reversion to the mean for an economy more used to growing closer to 2% than the much stronger levels it has turned in during the reopening.

“Growth has peaked, the economy will slow a bit in the second half of this year, then much more noticeably in the first half of 2022 as fiscal support fades,” said Mark Zandi, chief economist at Moody’s Analytics. “The contours of growth are going to be shaped largely by fiscal policy over the next 18 months. The tailwind just blows less strongly, and may stop altogether by this time next year.”

It’s been a long road getting here, but the economy has gotten very close to its pre-pandemic self.

In fact, according to a running gauge that Jefferies keeps, overall output is at 98.6% of its “normal” level before Covid-19 turned everything upside down. The firm uses a slew of indicators to measure then versus now, and finds that while some areas such as employment and air travel are lagging, retail and housing have helped push overall activity to just below the 2019 level, at 98.6%.

“When I look holistically at household income dynamics and balance sheets, I see a very, very positive situation, very healthy fundamentals, and it’s hard to be pessimistic on the outlook,” said Aneta Markowska, chief financial economist at Jefferies.

Indeed, household net worth totaled $136.9 trillion at the end of the first quarter, a 16% increase from its 2019 level, according to the Federal Reserve. At the same time, household debt payments compared with disposable personal income fell to 8.2%, a record low going back to 1980.

But much of that net worth has been driven by increases in financial assets such as stocks, and personal income has swelled due to government stimulus payments that are slowing and eventually will stop.

Demographics holding back growth

Keeping up such a rapid pace of growth will be difficult in an economy that has long been held back by an aging population and lackluster productivity. Those issues will be exacerbated by dwindling policy support as well as an ongoing battle against Covid-19 and its variants, though few economists expect widespread lockdowns and the plunge in activity that happened in early to mid-2020.

“What we see is an economy growing robustly above trend albeit at a slower pace through 2023,” said Joseph Brusuelas, chief economist at consulting firm RSM. “Absent any productivity-enhancing policy support, we eventually will move back to trend because there’s not much we can do about the demographic headwinds, which will eventually drag growth back to the long-term trend.”

But there also are shorter-term headwinds that should temper those gaudy growth numbers.

An aggressive spurt of inflation brought on by supply constraints and huge demand related to the economic reopening will hit output. While many economists, including those at the Federal Reserve, are willing to write off the inflation as temporary with soaring used auto and truck prices contributing a large component, officials including Treasury Secretary Janet Yellen warned that the price increases are likely to continue for at least several months.

Gasoline prices at a Royal Dutch Shell Plc gas station in San Francisco, California, U.S., on Wednesday, July 7, 2021.
David Paul Morris | Bloomberg | Getty Images

Inflation combined with fading fiscal support also then will serve as a growth limit.

“The economy is facing supply constraints with residential investment likely a drag and the change in inventories remaining negative,” Bank of America U.S. economist Alexander Lin said in a note. “Looking ahead, this is likely the peak, with growth cooling in the coming quarters.”

Capital Economics forecasts a below-consensus 8% GDP figure for the second quarter, then a drop to 3.5% in the following period.

“With surging prices squeezing real incomes we suspect the pace of monthly growth will remain lackluster, setting the stage for a sharp slowdown in consumption and GDP growth in the third quarter,” wrote Paul Ashworth, chief North American economist at Capital Economics.

The pandemic is another wild card.

Cases of the delta variant are spiking in a handful of states, and health officials worry that the U.S. could face a surge like the one hitting some European and Asian countries. Few if any economists expect another wave of lockdowns or similar constraints in the U.S., but pressure from abroad could hit domestic growth.

“Export platforms like Vietnam are being locked down now,” Brusuelas said. “Vietnam is becoming a more important cog in the global supply chain, so we are watching that closely.

Brusuelas added that the negotiations over the debt ceiling also could shake up things in the U.S. Yellen said Friday that extraordinary measures the U.S. may need to take to continue paying its debts could hit troubles as soon as October.

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Restarting a sustainable, export-oriented economy – Business in Vancouver

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Clean, sustainable products and services will be key to B.C.’s economic recovery | Chung Chow

This column was originally published in BIV Magazine‘s Trade issue.

As B.C. looks to restart its economy, the demand for our province’s clean and sustainable products and services is surging across a variety of sectors, demonstrating the key role that trade will play in our economic recovery.

Exports increased 24% year-to-date for April – that’s up $3 billion over the same time last year. It’s a big boost for the provincial economy, with a majority of our exports being commodities in great demand. Our stringent environmental standards in wood exports, burgeoning clean tech sector and high standards in labour protections mean that when other markets buy from us, they’re also contributing to a cleaner and more socially responsible global economy.

B.C. was committed to international trade long before the pandemic. It creates new opportunities for businesses, and more importantly, it creates good jobs and prosperity for people in B.C. When businesses export, they are more resilient. Access to more markets means they have a more diverse customer base and aren’t as impacted by fluctuations in their local economies.

We have a program perfectly designed to help small businesses get their goods and services to new markets. It’s called Export Navigator. This program offers businesses free expert guidance on exporting. Businesses get connected with an expert advisor who will help “navigate” them through the export process. It’s hugely beneficial, helping businesses reach new customers for the first time and making the process a lot easier along the way.

We continue to support B.C. businesses in other ways as well. For example, we developed a series of grant programs to meet their unique needs, making over half a billion dollars available in direct supports. The Launch Online program helps businesses improve their online presence to attract and keep customers and meet demand as online shopping hit new heights during the pandemic. The Supply Chain and Value-Added Manufacturing grant helps B.C.-based manufacturers in the aerospace, shipbuilding, food processing and forestry sectors recover and grow, supporting them to seek efficiencies to continually keep goods flowing into the marketplace.

From natural resources and agrifoods to manufactured goods and high-tech goods and services, B.C. has a lot to offer to the world. We are a responsible, low-carbon producer of natural resources and manufactured goods, and we are working hard to make sustainability a larger part of B.C.’s brand and our global competitive advantage. Our priority is to help B.C.-based businesses start up, scale up, access global markets and succeed in the highly competitive world marketplace. The more we export, the more new dollars we bring into B.C. and generate revenue that supports government investments in health care, education and critical infrastructure.

We stand behind the high-quality goods that B.C. has to offer to the world. Globally, companies large and small are increasingly applying environmental, social and governance filters to their investment decisions. We are committed to growing our economy in a sustainable way, and are working on a new trade diversification strategy that will provide us with the opportunity to develop an updated, forward-looking and ambitious approach that aligns closely with these principles, while ensuring that our exporting businesses are maximizing the opportunities afforded to them through Canada’s existing free trade agreements. Our recently announced Mass Timber Demonstration Program is an example of how we are advancing technologies that can showcase to the world the possibilities of building with a more sustainable and environmentally friendly product from B.C.

The pandemic leaves behind many lessons and creates a once-in-a-generation opportunity for B.C. to redefine itself. We know the pandemic is not impacting everyone equally, with women and visible minorities being disproportionately impacted. This is why we are committed to continuing to grow strong, robust industries that can provide good jobs for all of B.C.’s diverse populations.

Growth in trade will be a big part of our economic recovery, and as we transition through our restart plan, we will continue to engage with businesses, industry and key stakeholders to ensure we’re supporting their efforts to expand globally.

Our goal is to diversify our trade sectors to include not just our natural resources, but clean tech, high tech, agritech and advanced manufacturing. We need to support our exporters and encourage new exporters to expand our opportunities in global markets and strengthen our resilience.

We’re committed to invest in people and in businesses to restore economic growth and we are confident that the entrepreneurial spirit of B.C.’s business community will rise to the challenge as we work together to build a better future with meaningful jobs and a strong, sustainable economy for all. 

Ravi Kahlon is B.C.’s minister of jobs, economic recovery and innovation. George Chow is the province’s minister of state for trade.

This column was originally published in the July 2021 issue of BIV Magazine. The digital magazine can be read in full here.

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Economy

ECB Lifts Restrictions on Bank Dividends as Economy Rebounds – Bloomberg

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The European Central Bank said it will lift a cap on how much lenders can return to shareholders with dividends and share buybacks, while urging them to remain cautious given uncertainty in the pandemic.

The ECB “decided not to extend beyond September 2021 its recommendation that all banks limit dividends,” the central bank said in a statement on Friday. “Instead, supervisors will assess the capital and distribution plans of each bank as part of the regular supervisory process.”

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