My notes on the business of social sharing and content creators

My most recent living situation caused me to share a home with a family over the last few months. The family had 3 girls aged between 8 and 13, who as you can imagine lived their life on their phone. Most particularly however, the phone was constantly recording every moment of their existence. The goal of this was to capture a shareable moment, in the form a random humorous, surprising or shocking moment.


After recovering from the realization of an unavoidable future of life constantly on record, the obvious next step for me to do was to understand the business drivers underlying the world of Video Content Creators, living their business and personal life one TikTok, Insta, Twitch or YouTube share at a time.


Being new to this world, I simply share here my notes I was able to gather on how one can sustain a lifestyle from this most modern means of communication.


Please do share in the comments hereunder 👇 any interesting content or articles developing further on my notes 🙏 :


TikTok business design:

The platform that was used by my house-mastes was of course TikTok.Hereunder are key points as extracted from a TikTok pitch deck I received - message me if you want me to send it to you 👍.


TikTok religiously track the behaviors of their most engaged users. They create ad revenue streams that are embedded, if not native, to the engagement experience of their users.


Most notably they created the hashtag challenge competitions, whereby users competed to be a featured video in accordance to the sponsored [theme] of the day. The result was paid-ad engagement performed better than organically generated engagement.


TikTok chellenge

A shift is happening in social media. The pursuit of instant dopamine gratification in the form of likes and views is slowly but surely losing the battle to engagement metrics. Social Media platforms and creators care increasingly about not only their followers, but increasingly more their superfans.

Number of views is less important than the depth of engagement. And when followers become commodities, superfans are what counts. Earlier this year, Instagram began testing removing likes for individual posts. And in China, video-streaming platforms such as iQiyi and Youku no longer show video views, and instead choose to rank videos based on number of interactions.


Although the origin of these business models emerge most famously from eSports fans via Twitch, Entrepreneurs have caught on. Now, through the rise of short-form video content platforms like TikTok, Instagram, YouTube, and Pinterest, we are entering a new era of native ecommerce. Social Media stars range from farmers to indie craftspeople to clothing designers who are able to reach shoppers directly through self-recorded video clips.


Soon enough we will think of video apps as a platform not only for entertainment, but for retail.

Whilst it is no news that video in the marketing strategies reported 41% more web traffic from search engines, the key message is that live streaming can help you humanize your brand. Creators embrace clumsiness extreme emotion, constant deviations from the core narrative and instinctive commentary in their streams. Companies are starting to provide consumers with a good glimpse behind the curtain.

There are incredible perks to live streaming content on social media because the platforms themselves promote it. They key ingredient - be entertaining!


This will cause a dramatic shift from corporate marketing departments directly to the creator. As the tools for connecting keep getting better, including the recent innovations in social media. It has never been easier to gather 1,000 true fans around a creator, and never easier to keep them near.

The simple argument made in KK´s seminal article is that earning $100 per annum from 1,000 true fans allows creators to earn a healthy lifestyle from their art and passion - and live streaming is enabling them to connect than ever before.


How do professional video content creators make money?

What catches the headlines are those pesky professional Twitch streamers (Twitch accounts for nearly 75% of all stream viewership, so it is definitely riding on top.) that make hundreds of thousands or even millions of dollars per year by sharing live videos on the platform. So what are their options for revenue making?


The core business model - subscriptions

In China, where influencer culture is as strong as the US, the social networks have evolved to enable influencers to monetize their fan bases by selling paid subscriptions. Special perks include the use of custom cheer emojis, a subscriber-only chatroom, and the ability to watch livestreams ad-free. Subscriptions auto-renew each month, providing a reliable recurring revenue stream for Twitch streamers.

Twitch seems to adopt a 50-50 share model. The “Twitter of China,” Sina Weibo, offers this type of paid subscription product, with a 70-30 revenue share.


Expert paid content

Another example is Sam’s (恶魔奶爸) Millennial Self-Help Group ($33 per year). The group’s creator is a popular educational columnist who has more than 15 paid Weibo groups—each group has thousands of followers. Upwards of 1,000 messages might be sent in a single group each day. Though Sam occasionally responds to messages, the conversations are mostly between members of his audience—millennials chatting about popular topics like employment, love, and their personal finances.


Financial analysts like Zhang Ma offer longform analysis as well as exclusive charts and graphs only to paid subscribers. In particular, his channel (screenshot below) grants readers access to a library of more than 1,500 pieces of content, including more than 900 short-form pieces, over 200 essays, and nearly 400 Q&As. A tip button at the bottom of each article gives subscribers the ability to reward authors for particularly insightful articles.


Paid Q&As

Through Weibo’s Q&A feature, users can ask questions to influencers through their profile pages—and even offer cash for answers. Nutritionist Gu Zhongyi, for instance, provides 6-month channel memberships for $24 that include chat groups and the ability to view all paid content. But to ask him a question directly, Dr. Gu charges $21; the user is only billed if he answers.


Case study - https://a16z.com/2019/12/05/video-first-ecommerce/
For most of his life, Wan Shishan made a meager income exporting traditional paper umbrellas to Japan. But when he made a Douyin account in April and posted his artistic process—the craft dates back more than 2,500 years—he made $15,000 in his first month. He now has more than 800K followers, and the following video has earned over 300K likes.

Monetising the casual fan - Donations and Bit Cheers

Channel subscribers and casual onlookers can support their favorite Twitch influencers by purchasing Twitch’s virtual currency known as “Bits.” Another source is pure donations via Paypal, Patreon, or other creator donation platforms. Donations, colloquially referred to as “Tips,”. Several niche platforms have cropped up within the Twitch economy specifically to help streamers bring in donation funds, like Streamlabs and StreamElements.

A service like StreamTickYou lets you sell tickets to streams on YouTube, Facebook, or Twitter. With that, you have everything you need to put your content behind a paywall.


Advertising revenue via Twitch and other social channels

Ad revenue is another monetization channel for popular Twitch streamers. Similar to YouTube video ads, both pre-roll and interstitial ads play whenever a viewer tunes in to a livestream or watches a prerecorded gaming stream or clip. Twitch’s ad revenue falls under a flat-rate CPM model. Streamers frequently partner with brands to create merchandise, a niche of influencer marketing that’s gamer-specific. Affiliate sales are also a material revenue stream.


Professional gaming, including eSports sponsorships and winning tournaments

Video game enthusiasts flock to Twitch to watch elite gamers play popular games, rewarding them by becoming a paid channel subscriber or sending “Bits,” Twitch’s virtual currency.


Niche in the Niche

Twitch’s main viewership is focused on incredibly popular games like Fortnite, League of Legends, and more. Recently, a popular IRL (in real life) category has emerged, in which people stream their daily life, along with sections ‘Just Chatting’, ‘Music & Performing Arts’, and more.


DLive is another up-and-coming streaming platform. What makes this platform unique is that is used blockchain technology to benefit streamers and viewers. For example, 100% of donations and subscriptions go to the streamer, whereas most sites like Twitch take a cut. Viewers can even earn a blockchain-based currency by interacting with streamers. There is still an opportunity to make a name for yourself on DLive, as it’s still quite new.


The adult entertainment industry, yet again in the tech world, is also a relevant source to understand the disruptive elements these new models are taking. Camming (as live streaming is known) has as its value proposition its personalization and interactivity. Models give live performances through webcams, and clients pay for varying degrees of intimacy. Private showings cost the most; shared viewing lowers fees. Many sites also use a tip-based model, where viewers can stream content for free but pay tips to instruct the model to perform their desired actions. OnlyFans has changed the way adult content is made, distributed, and consumed by the millennials. OnlyFans account engage with the platform as fans and are admirers of the human side of OnlyFans models; people who want to connect and know the person behind the webcam.


Key Takeaways:

Video streamers are allowing creators to not only reach direct to viewer, but to turn those direct viewers into a direct source of revenue

Engagement is the metric that matters and “Be entertaining” is the way to compete for attention

Marketing is shifting further into humanization. Consumers want “real life” experiences. Well-polished corporate presentations are losing to “real” entertaining creators


For more information - https://www.clutchplayadvisors.com/blog

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