Platforms Are Using Audiences as a New Means of Distribution (and Here’s Why That’s a Problem)

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It might be the creator economy but creators fuel it rather than drive it, and as long as that’s the case creators lack control, says Mark Mulligan, co-founder of MIDiA Consulting.

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In a piece that takes aim at current video sharing platforms like YouTube, Facebook and TikTok (aka Web2), Mulligan says it is time to re-create the creator economy.

First and foremost, platforms like these do not need the creators to find success for their respective business models to work, Mulligan argues. This is because, YouTube, TikTok et al, monetize creators by harnessing aspiration at scale.

“If there are enough creators — and the pool is growing fast — a multitude of small-scale audiences are enough to drive the platforms’ strategic objectives of driving audience engagement, which, in turn, drives revenue.”

What complicates matters further is the fact that creators are developing platform dependence — merely renting space on the platforms they depend upon, rarely with tenancy rights and often slave to the algorithm.

What has enabled this conflicted set of priorities to become established is the rise of platforms that use audience as the new form of distribution.

“Whereas traditional entertainment services, like Netflix and Spotify, license and create content to distribute to audiences, audience platforms, like TikTok and Twitch, pull their content from the audiences themselves,” Mulligan argues. “Even though most users consume rather than create, the creators come from their ranks. The old paradigm of license/create-distribute-audience has been replaced by audience-create-audience.”

While it’s great that the creator economy is opening more doors for more creators than ever before as the number of creators grows, fandom and consumption fragment. The longer the tail, the harder it is for creators to cut through, find audiences, and build careers.

“Creators find themselves locked in a perpetual cycle of create/produce/perform/engage, with their host platforms demanding ever higher levels of frequency and volume of output.”

There is a growing awareness that owning their audiences and having direct communication with them is important and that Web3 companies like Pico, Disciple Media which are owned and controlled by its members are a way of achieving this.

“Yet today’s creator economy is not built this way,” says Mulligan. “The majority of creators have the majority of their audiences on platforms where they are slave to the algorithm.”

Owning audience is just one item on a long list of structural challenges that the creator economy must address Mulligan, pointing to MIDiA’s new report, “Re-creating the creator economy,” says. “If it is to transition from its current phase of undoubted opportunity, into something that can genuinely reshape and redefine the future of entertainment itself.”