Thread by @petergyang

🔮 Prediction:

Creator economy companies are in a race to the bottom to take less of a creator's earnings.

This trend is great for creators but has big implications for the companies. 👇

1/ For years, large platforms like YouTube and Twitch have taken 30%+ of a creator's earnings from subs, tips, etc.

They justify this cut because they help creators grow an audience.

https://twitter.com/petergyang/status/1363517760890896386?s=20

2/ Startups that focus on helping creators make money take a much lower cut of creator earnings:

Substack: 10%
Gumroad: 3.5%-8.5%
Buy Me a Coffee: 5%

3/ What's different now is that large platforms are now planning to let creators keep all their earnings.

Specifically, Twitter:

https://twitter.com/petergyang/status/1369319656389894147?s=20

4/ Rather than build tipping natively (and taking a cut), Twitter is letting creators add multiple 3rd party tipping options:

https://twitter.com/wongmjane/status/1369729589933535232?s=20

5/ Twitter knows that it doesn't need to take a cut of creator earnings. Instead:

1. Creators keep all their earnings on Twitter vs. other platforms
2. Creators make more content and engage fans on Twitter
3. Fans use Twitter more and see more ads

6/ Any creator company that relies on a percent of creator earnings to make money will feel a squeeze from:

1. Large platforms in a race to the bottom on take rate
2. Top creators being the most at risk to leave the platform due to the take rate model
3. NFTs and social tokens

7/ "Percent of creator earnings" is quickly becoming a low-margin business. Instead, creator companies might explore other monetization channels such as:

1. SaaS monthly fee
2. Lead gen fee