Influencer economy reports are usually light on hard data given the notoriously opaque ecosystem. They share projections indicative of an industry on the rise; estimates that the industry finds reasonably accurate—but it’s also essential to unpack these reports to find out whether the data can be misleading.
Two weeks ago, on 4 March, YouTube released a report stating that its creative ecosystem contributed ₹6,800 crore to the Indian economy in 2020 and supported 6,83,900 equivalent full-time jobs. Several industry stakeholders have called the figures misleading and lacking in transparency, even as the Alphabet-owned video-sharing platform promotes the report’s findings via a mass media campaign.
The figures, compiled by global advisory firm Oxford Economics, include the “direct, indirect, induced and catalytic impact” of YouTube’s creative ecosystem on the Indian economy. This means the final amount, ₹6,800 crore, includes the revenue creators made directly from YouTube, the money spent in the actual production process while creating content (on everything from a Versace jacket purchased by the creator, to the vada pav they ordered for lunch while shooting), as well as the “induced impact, generated by the wage expenditure of those employed by this creative ecosystem”. Finally, the eye-popping figure also includes “off-platform” revenues through brand endorsements, fan meetups and the like that act as additional revenue sources for creators.
The number is large and thus bemusing to many. It is over seven times the current estimated size of the creator economy ( ₹900 crore) and threefold what the industry estimates the creator economy will be worth three years from now ( ₹2,200 crore). This is because YouTube has clubbed three industries under the “creative ecosystem”: the individual content creators (or the creative entrepreneurs), the media companies–big and small, and finally the music industry.
Among the 27-odd data points mentioned in the report, there is not one chart calling out the split of the ₹6,800 crore number across these three industries, to provide a clearer picture of how much of this value is captured by “creative entrepreneurs” considering this fledgling ecosystem is liberally used by YouTube as the face of its PR efforts in India.
Being more transparent about this split is important for a variety of reasons, say industry spokespeople.
Firstly, “because there’s a big difference between a content creator and a music artist,” says Mandar Thakur, COO of Times Music. “Artists create IPs, a legacy that far outlives them. Most creators, on the other hand, have a short lifespan in terms of utility to brands. For just about ₹3 lakh, you can get over 10,000 micro-influencers.”
Secondly, while industry estimates indicate that about 100 content creators make over ₹1 crore in annual income from all sources, one of the biggest music labels in the country makes over ₹100 crore in just ad revenue from YouTube in a year, indicating that organised music industry’s contribution to the ₹6,800 figure may far outweigh that of “creative entrepreneurs”.
Thirdly, most leading musicians can make several lakhs from just one live concert—which is a significant ‘economic impact’ event—and income from YouTube is often just an add-on for them. In comparison, content creators have to strive to diversify and derisk their income streams away from Youtube. The majority cannot depend on YouTube ad revenue for stable income because the CPM (cost per thousand impressions) rates are abysmally low in India. Over time, “even creators with a following in millions are seeing their income from YouTube reduce because of a supply-demand mismatch (i.e. creators have grown in number at a faster rate than digital ad spend),” says Garv Malik, standup comedian and chief meme officer at a financial services company.
Malik points towards a recent tweet from political satirist and comedian Kunal Kamra, in which he shows his YouTube earning of $200 or ₹15,350 from a video that has fetched over 1.3 million views. As is the case with most other industries, here, too, 10-15% of the creators contribute to 80% of the income generated by the creator economy.
The bulk of the creator economy revenue comes from brand deals. But most non-urban creators, especially from non-English/Hindi speaking regions and oppressed communities, struggle to make enough money from brand collaborations to be able to treat this as a full-time job. “The brand deals are still decided by PR agencies in Delhi, Mumbai and Bengaluru, who call their trusted talent management agencies in the same cities for recommendations,” says Viraj Sheth, cofounder of Monk Entertainment, a talent management and influencer marketing firm. “This is slowly changing though, especially with the advent of homegrown short-video-sharing platforms. People now ask for a diverse set of creators from different languages and regions,” he adds.
These factors raise questions over the diversity of the sample of 1,203 creators surveyed to arrive at the creative entrepreneurs’ contribution to the ₹6,800 crore figure, making people in the creator ecosystem further question just how significant is their contribution to the whole pie.
“Today, more creators are making a living on YouTube than ever before. And, we are consistently investing in efforts to help more creators grow and diversify their revenue,” says Ajay Vidyasagar, regional director, APAC, YouTube Partnerships. YouTube did not respond to Mint’s specific queries on the lack of transparency in the report’s findings.
YouTube provides multiple ways for creators to monetise their content via the platform itself. “It is also better than some home-grown short-video platforms that make creators sign exploitative contracts, asking for exclusivity and a cut of their revenue from brand deals,” says Praanesh Bhuvaneswar, CEO of Qoruz, an influencer data analytics firm. Bhuvaneswar says he didn’t think much of the report and had filed it under “harmless PR” till YouTube started using it for what looks like a creator onboarding campaign.
Right now, YouTube is full of videos from content creators piggybacking on this number of ₹6,800 to create videos on why this is the best time to become a YouTuber.
“It could lead a lot of people into thinking that it is easy to be a YouTuber and make money, whereas the truth is, it is not,” says Lakshmi Balasubramanian, co-founder of Greenroom, an influencer marketing firm. “Many leave steady jobs for it or use their parents’ money to make videos because everyone believes this career is a money-spinner. They see some people become (an) overnight sensation but that’s one in a million,” she adds.
A large chunk of the creator audience also needs to be educated on algorithm changes and optimisation of metadata, says Vipasha Joshi, country manager (India) at Jellysmack, a global creator monetisation company, who has also worked at Google in the past and thus understands that platforms often tend to focus on the top and mid-layer of creators for growth.
According to multiple industry stakeholders, the top of the pyramid, constituting about 15-20% of creators, make more than ₹1 lakh in a month (going up to several lakhs in some cases). Things are grim for those at the bottom though. “Platforms need to educate aspirants and new entrants that it is still the top of the pyramid that makes the bulk of the money, while the bottom of this pyramid is the largest with creators making little to sometimes no money at all for months,” Balasubramanian says.
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