Artificially Inspired: How Machines Are Disrupting the Creator Economy

Introduction

In 2020, famous venture capitalist Li Jin wrote a groundbreaking piece centered around the need for a middle class in the creator economy. She hypothesized that cultivating this middle class would result in better platforms and more opportunities for aspiring creators worldwide. In some sense, this has been proven true with more than half of full-time content creators identifying as self-supporting (i.e., supporting at least one person), while in other ways, such as the fact that only 1 in 5 say they earn “substantial” income, it has not. However, as the rise of artificial Intelligence (AI) has been making significant strides, its impact can strongly be felt in the creator economy, and it stands to disrupt the way content monetization is perceived and the way the creator economy is structured.

AI-generated content refers to any digital media that is created, at least in part, by artificial intelligence. This can include anything from chatbots and virtual assistants to news articles, product descriptions, and social media posts. According to venture fund Antler, while only 33% of the 30+ creators they surveyed confirmed they have started using a Gen-AI product—and some said they were still unsure what it is—they expect use to skyrocket over the next year. The technology behind AI-generated content has been improving rapidly, and today's AI algorithms can produce content that is virtually indistinguishable from human-generated content. This ability to produce high-quality content quickly and efficiently has significant implications for the creator economy.

Changes to Creator Operations

More Accessible Content Creation

One of the initial ways that AI-generated content will disrupt the creator economy is by offering a cheaper and more accessible content creation option. In the past, the complexity of content creation has been a major obstacle to creativity. While coming up with new ideas for music, art, literature, or film may be relatively easy, the process of transforming them into a tangible and shareable form has traditionally required extensive learning and practice. Creating high-quality content can be time-consuming and expensive, and many creators struggle to produce enough content to maintain a consistent audience and monetize their work.

However, this barrier is now being removed by Generative AI technology. According to Lindsey Gamble, an influencer marketing and innovation strategist, “People who may not possess the skillset to take an engaging photo or create a video, now have the opportunity to do so with this technology. AI lowers the barrier to entry for content creation, even more so than what the iPhone does for photography or TikTok does for video.” With the ability to generate content quickly and easily, AI has greatly simplified the creative process, making it more accessible to virtually anyone with a computer and internet access.

With AI-generated content, creators can quickly and easily generate a wide range of content at a fraction of the cost of traditional content creation methods. There are several noteworthy instances worth mentioning, such as the artistic contributions of Rafael Lozano-Hemmer. Lozano-Hemmer specializes in developing interactive installations that harness the power of artificial intelligence. His creations involve generating images that directly respond to the movements and actions of viewers, resulting in captivating and dynamic visual experiences. Another artist who deserves recognition is Memo Akten. He employs algorithms inspired by the intricacies of natural systems to craft mesmerizing visual artworks. His creations utilize algorithms that simulate the behavior of natural phenomena, yielding stunning and thought-provoking compositions. As a result, competition among creators is likely to increase significantly, making it even more difficult to achieve fame and financial success.

More Efficient Workflows

Another way that AI-generated content will disrupt the creator economy is by offering a more efficient creative process. Creators often spend hours researching, writing, and editing content, which can be tedious and time-consuming. With AI-generated workflows and content, however, much of this work can be automated, allowing creators to focus on other aspects of their work, such as promoting their content and engaging with their audience. This efficiency could make it easier for creators to scale their operations and monetize their work more effectively.

More Personalized Algorithms and Content Recommendations

Furthermore, the utilization of AI algorithms to personalize content recommendations is on the rise, helping creators to broaden their reach. However, with the integration of Generative AI, content curation and creation can be managed by the same machines, producing on-demand content that precisely meets the viewers' preferences. This scenario could resemble an advanced version of TikTok, where machines automate the role of creators instead of human beings. Another example includes popular quiz website, BuzzFeed, which uses AI tools provided by ChatGPT creator OpenAI to enhance the quiz experience and personalize their content. After the announcement by the news website, the share price of BuzzFeed has surged by over 100 percent in response due to the possible productivity gains.

Nevertheless, this might lead to the concentration of power within the hands of a limited number of significant platforms that control the algorithms, leaving human creators at a disadvantage. These AI recommendations algorithms are proprietary and owned by a small number of large tech companies, meaning that these companies could exert significant control over the content generated by these algorithms. This could result in a less diverse and less democratic creator economy, which would harm human creators and could harm the industry's ability to innovate and adapt to new trends and technologies.

More Global Reach & Diversified Revenue

The invention of Gen-AI provides alternate avenues to enhance marketing, ad placement, and reach. New AI tools enable creators to have a global reach from the outset, eliminating the restriction of content creation solely in their native language. By utilizing platforms that translate their voice or text content into any language using their own voice, creators can broaden their audience. Emerging platforms support creators in transforming videos into any language using synthetic voices or providing easy to use translation services.

According to Goldman Sachs, brand deals make up nearly 70% of revenue for all creators. With heightened competition spurred by Generative AI, brand deals and partnerships are poised to become harder to come by, making it crucial for creators to diversify their revenue streams and double down on their niche. Numerous conversations with micro-creators who hoped to go full-time on their content intended to adapt and utilize AI as a co-creator for merchandise, subscriptions, or affiliate marketing which will ensure a steady income and allow for more control over creator’s financial futures.

Threats to Creation

Redefining Copyright

An issue of significant concern that has already begun to impact the creative industry is the matter of copyright. While AI can assist in enforcing copyright laws by detecting and flagging instances of infringement, it may also create novel challenges for copyright laws due to AI-generated content blurring the lines of authorship and ownership. The current state of US copyright law denies copyright protection to computer-generated content, thereby diminishing the worth of all creations by permitting the production of low-cost, effortlessly replicable, and non-copyrightable content.

Just as the actor and writer strikes in Hollywood reflect tensions with legacy media companies over compensation, many individual creators are feeling increasingly pressured to define ownership of AI generated content. The Hollywood strikes foreshadow impending battles over IP rights and fair payment as the creator economy grasps for ways to adapt to the AI revolution.

Changing the Definition of Creativity

In addition, one of the main concerns is that AI-generated content may lack the personal touch and creativity that human-generated content offers. Creators often build a loyal following based on their unique voice, style, and personality, and AI-generated content may struggle to replicate this. This could result in a less engaging and less authentic creator economy, which could harm the industry's growth and potential for monetization.

For example, Caryn Marjorie, a 23-year-old influencer, collaborated with the AI company Forever Voices to develop an intriguing project. By utilizing the capabilities of GPT-4, she fed her own videos into the system and birthed "CarynAI," a chatbot that imitates her manner of speech and communication. This unique creation allows individuals to engage with a virtual companion that emulates Caryn's personality and conversational style. Capitalizing on this creation, Caryn Marjorie offers the services of her "virtual girlfriend" for rent, charging a rate of $1 per minute. This novel concept provides people with the opportunity to interact with an AI-based chatbot that replicates the experience of conversing with Caryn herself, but is not the “real” thing.

Conclusion

Despite these concerns, it seems likely that AI-generated content will play an increasingly important role in the creator economy in the coming years. Creators will need to adapt to these changes and find new ways to differentiate themselves from AI-generated content. In talking with current creators, one potential strategy could be to focus on creating content that is more personal, creative, and engaging than what AI algorithms can produce. Creators could also lean on alternative forms of monetization, such as exclusive brand deals, subscription-based models, merchandise sales, and crowdfunding. While we are still in the early innings of artificial intelligence, it’s clear the rise of AI-generated content will disrupt the creator economy and its monetization in various ways.

It is essential to have a comprehensive understanding of the implications of AI on the creator economy to mitigate its negative impacts and maximize its benefits. Creators need to be proactive in embracing the changes brought by AI and adapt their strategies to remain relevant and thrive in the ever-evolving landscape of the creator economy.

Finally, policymakers and industry leaders must work together to establish a regulatory framework that promotes innovation, diversity, and creativity while ensuring fair compensation for creators and protecting their rights. A comprehensive framework should encourage and facilitate innovation by fostering an environment that supports research and development, promotes experimentation, and incentivizes the adoption of emerging technologies by creators and companies alike.

Secondly, the framework should emphasize diversity and inclusivity by promoting equal opportunities and fair representation across all sectors of the industry, ensuring that creators from diverse backgrounds have access to resources and platforms needed to compete in this new and evolving market. Lastly, the framework should enforce robust intellectual property protections to safeguard the rights of creators, whose works are being used to train models, ensuring fair compensation for their work, and providing effective mechanisms for resolving disputes and enforcing copyright laws.

Only once this is defined and implemented can we truly realize the full potential of AI in the creator economy.

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The material presented on Glenn Borok’s website and blog are my opinions only and are provided for informational purposes and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy, or investment product. Any analysis or discussion of investments, sectors or the market generally are based on current information, including from public sources, that I consider reliable, but I do not represent that any research or the information provided is accurate or complete, and it should not be relied on as such. My views and opinions expressed in any website content are current at the time of publication and are subject to change. Past performance is not indicative of future results.

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[1] https://www.thetilt.com/research

[2] https://www.antler.co/blog/2023-creator-economy

[3] https://lindseygamble.com/blog/the-rise-of-ai-powered-text-to-image/video-generators-what-it-means-for-the-creator-economy

[4] https://www.businessinsider.com/chatgpt-and-generative-ai-in-creator-economy-how-to-prepare-2023-april

[5] https://www.goldmansachs.com/insights/pages/the-creator-economy-could-approach-half-a-trillion-dollars-by-2027.html