Internet creators and their business models have been on our minds this week after wildly popular YouTuber MrBeast announced his company is buying fintech startup Step, followed by Hollywood studios sending a flurry of cease-and-desist letters to ByteDance at the launch of its new video production model Seedance 2.0.
Those seemingly unrelated topics suggest the media landscape is in the midst of a transformative transition, as popular YouTubers look to diversify their business models, with the threat and promise of more powerful AI production tools on the horizon.
In a recent episode of TechCrunch’s Equity podcast, Kirsten Korosec, Rebecca Bellan, and I debated what’s next for the creator economy, and whether there will be room for the next generation of creators to shine.
“What is the next saturation point?” Kirsten asked. “Not all of these people can go out and start products. So is the pool of successful creators just getting smaller? Or is something else going to happen, technologically speaking, or a different approach that will allow them to find an audience that they can monetize?”
You can read a preview of our interview, edited for length and clarity, below.
Anthony: [The news] it led our colleague Lauren to do this great piece about the business model of creators as a whole, and this idea that they’re no longer just relying on ad revenue. I think it’s still a big part of their business, but he broke down the number of the most popular YouTubers and noted that each of them is growing – usually in e-commerce, but also in other sources of income.
Mr. Beast, for example, has this chain of food products, including chocolate, that is doing hundreds of millions of dollars and actually turned a profit for him by 2024, while his media business was losing money. All of that was bad for me.
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Kirsten: If Mr. Beast can make a profit from his media company, who can? To me, that was an amazing number.
I’m not surprised that the whole adrevenue biz game isn’t working for creators and promoters because it just hit a saturation point. I guess my biggest question is, what is the next saturation point? Not all of these people can go out and change products. So is the pool of successful creators just getting smaller? Or is something else going to happen, technologically speaking, or some other way that will allow them to find an audience to monetize?
Rebecca: It’s interesting, there are so many ways you can think about what else could happen, right? Maybe they’ll create digital twins and put their digital twins in a bunch of different situations that they can create [other kinds of] money.
But again, back to this it’s no surprise, these people are now celebrities, right? Someone told me on the phone recently that a lot [the] young people, they don’t know our celebrities, they know TikTok celebrities. And we’ve seen celebrities for years passing on brands and making money from them, right? I used to watch Rachel [Ray]he was a celebrity chef and he was selling his EVOO or his olive oil.
We Slow Ventures on [Equity] sometime last year. They have a creator fund and basically what they’re doing is they’re raising a VC fund to actually give back to creators through their businesses, if maybe they have a niche following, maybe they like woodworking and here’s their chisel collection, I don’t know.
I think it’s an interesting way forward and it’s something that we see as journalists: How do we also try to be creative and build a name for ourselves so that we can diversify our income. It feels bad to say it like that.
Anthony: I smile, but the smile of a person whose soul turns to ashes inside.
So we took a break from talking about AI, but I will obligingly bring AI back into the conversation. Apparently one of the related developments this past week is that ByteDance, which is the Chinese company that launched TikTok and is still an investor – we won’t go into all that – launched a new version of their model, Seedance 2.0, at least initially available only to Chinese users.
But you’re starting to see people posting videos produced by Seedance, including this viral video of Brad Pitt fighting Tom Cruise. That has given rise to both the usual discussion of: Is Hollywood doomed? And obviously, a bunch of Hollywood studios, including Netflix, sending ByteDance letters like, “You can’t do this, you’re actually allowing all of your users to produce videos using all of our IP, all of our movie stars.” And for a few days, there was no response from ByteDance, but then they said, “Sorry, sorry, sorry, for some reason we launched this without any real guardrails, but we will do better next time.
Kirsten: So the timing for this is perfect because I’m editing an article right now that Rebecca wrote. It has nothing to do with Seedance, but it has to do with AI and filmmaking. So I’ll give future]rops to Rebecca for being on time with that. Rebecca, I know you have a lot to say about that, other than that Hollywood is upset. Is it more complicated than that?
Rebecca: Yes, definitely. I mean, tying this back to the creators thing, I think a lot of people are going to use these tools to produce all kinds of content and we’re just going to be completely saturated. And that will be intense.
But when we talk, whether it’s creating films or commercials or content in general using AI video tools, I think there’s this tension between one, this will produce a lot of low effort compared to the two, it can also democratize access to many people who don’t have money or budgets or groups to share many stories that want to tell.
And, if you’re a small business and you want to do a little shampoo ad – to be on the nose about it, because there’s a great shampoo ad – or you sell coffee and you want to do a little ad for us, [this] he can give you the tools to do that. Is that a bad thing? Isn’t that a bad thing? Do we need more content in the world? There are several ways to go down.
Kirsten: Is it a bad thing, Anthony?
Anthony: On the side of its creators, my general feeling is [that] the answer to most of this kind of slop – frankly, a lot of it is something slop, and I think that will continue to be the case – this will be the importance of authenticity. And so there’s an opportunity for these great creators to be less with the idea of, “I have a digital twin myself,” but [instead,] “No, I’m the real Mr. Beast, not some wandering digital simulacra.”
And I think it also means that – of course, every social network has ups and downs, but that Sora of OpenAI, from what I understand, was very up at the beginning and has been struggling to hold on to users recently, because there is a certain emptiness in the experience where you just feel like there is no real person on the other side.
But I think it will make the landscape more challenging, for experienced creators to make money […] then I think it will be difficult especially for new creators because there will be too many things. Trying to actually get out will be very difficult.
