Social media creators turn to subscription apps due to increasingly competitive, volatile content economy

• The creator economy peaked in September 2021, according to research published this month by the Bank of America Institute.
• Many content creators are increasingly looking to monthly subscription platforms like Substack and Patreon for consistency in their monthly income. 
• A separate study by influencer marketing agency NeoReach found that 48% of creators earn $15,000 or less annually, even as the global influencer market reached $21 billion in 2023.

Social media creators are turning to monthly subscription services to generate revenue directly from their followers in an attempt to find a stable source of income in an increasingly competitive and volatile market. 

The creator economy peaked in September 2021, according to research published this month by the Bank of America Institute. While the average monthly income for content creators has increased over the past three years, a typical, full-time U.S. employee makes five times as much in monthly income on average. 

"This suggests that it's rare to earn a full-time wage in content creation — let alone get rich," said the research, which was also conducted by the Bank of America Institute, a think tank that conducts its research using Bank of America customer data. 

Analysts at the Bank of America Institute attribute this to a slowdown in paid partnerships, a more competitive market for creators, a decline in online viewership since the pandemic and a concentration of paid partnerships among the top creators. 

While internet virality is unpredictable, turning content creation into a full-time career requires meeting certain financial needs, like the ability to pay monthly bills, content creators told CNBC. As a result, creators are looking to diversify their revenue streams, and in addition to paid partnerships, many content creators are increasingly looking to monthly subscription platforms like Substack and Patreon for consistency in their monthly income. 

Substack and Patreon have emerged as attractive options because they enable creators to charge their followers directly for their content. Creators can offer their followers different tiers of subscriptions for monthly fees, with each tier including different perks. Since its launch in 2013, Patreon has paid creators over $8 billion, while Substack claims to host more than 4 million paid subscribers.

On TikTok and Meta's Instagram, creators have to navigate algorithmic models that control when their content is shown, making income from those apps highly volatile. Earnings can fluctuate dramatically, spiking or plummeting based on how these platforms choose to promote their content.

"I can't rely on that to be what pays my bills," said Molly Burke, a creator with more than 4 million followers across her social apps. "As an entrepreneur, as a business owner, as a creator, I have to figure out how I'm going to sustain this as a career for as long as possible." 

Social media platforms increasingly rely on algorithms to decide what content users see, based on their past interactions and preferences. These algorithms analyze user behavior to create personalized content feeds, which often prioritize posts that are likely to generate engagement, such as likes or shares.

As a result, many creators feel pressured to make content that caters to the algorithm, even if they believe it lowers the quality of their work, content creators said.

"It ebbs and flows," Burke said. "Sometimes my TikToks are popping and I'm getting all the views, and then that algorithm just dips for a bit." 

While nearly half of creators work full time, most rely heavily on brand deals for income, with more than two-thirds having brand partnerships as their primary revenue source, according to a separate study by influencer marketing agency NeoReach. The study found that more than 48% of creators earn $15,000 or less annually, even as the global influencer market reached $21 billion in 2023. There are more than 50 million content creators worldwide, Goldman Sachs said in April 2023. 

Burke, a creator known for her videos about living with blindness and navigating daily life, has been producing content on the internet for five years. While it's not her biggest income stream, she uses her Patreon revenue to help cover essential expenses, including rent.

"I feel extremely lucky and grateful that it is a revenue stream that I can rely on, that I know at the bare minimum I can get my rent covered this month," she said.

Subscription platforms like Patreon address this by allowing creators to bypass the algorithm entirely, connecting directly with their most loyal fans who are willing to pay for exclusive content.

"Membership alone is a huge business for creators," Patreon founder and CEO Jack Conte said in an interview with CNBC. "It's creating predictable, reliable, huge sources of revenue for creators at a degree in scale that we've never seen before."

The Try Guys, a comedy group known for their challenge-based videos, have 8 million subscribers and 2.7 billion views on YouTube, but in May, they announced the launch of their own streaming service called 2nd Try. The group moved most of its new videos behind a $5-a-month paywall, where subscribers can watch the new content without ads.

In the three months since launching 2nd Try, the company said it is on track to reach profitability.

"We needed to build something that we could at least have some more consistency with," Try Guys co-founder Keith Habersberger told CNBC.

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