Transcript
Many people dream of becoming a content creator.
There’s no boss to answer to, you have freedom to work whenever you want, and you earn lots of money even when you sleep.
But there’s a huge problem: this content creator dream is a lie.
I’ve got some facts about the reality of being a content creator and they are going to blow your mind.
There are some massive misconceptions about content creation that no one is talking about. In fact, the whole ‘Creator Economy’ is totally broken.
But there’s good news as well:
There’s a much better way to do things.
I’m sure many of you are familiar with this famous psychological study involving rats.
In 1948, a simple contraption known as a ‘Skinner box’ was used to analyse rats’ behaviour. It was a simple experiment – every time a rat accidentally knocked a lever, food would drop into its box.
Rats quickly learned that every time they were hungry, they could press this lever and get a delicious meal to fill themselves up.
In the 1950s, psychologists modified the experiment so that instead of receiving food, rats would receive direct stimulation to their brain – dopamine. The hit of dopamine was so pleasurable that rats would press this new lever up to 7,000 times per hour.
Even when food and water was added back into the experiment, rats chose to exclusively press the dopamine lever. Their desire to self-stimulate took over their lives, and they had to be removed from the experiment to prevent starvation.
I promise this information is relevant.
I’ve got some juicy data here courtesy of Max Fosh on Colin and Samir’s podcast.
Max Fosh is a content creator with 2.7 million subscribers on YouTube, so he’s quite a bit bigger than the 1 million subscriber channels that I asked you to think about.
He definitely falls into the category of what most people think of when they think of a “content creator” – he comes up with an idea that he thinks people will enjoy watching, and he makes it.
By almost every definition, Max Fosh is an extremely successful content creator.
But…there’s a huge issue.
And, I’m not saying this to criticize Max Fosh. He’s exceptionally talented, far more talented than I’ll ever be. Max is simply a great example to share of someone with a staggering audience size that just happened to be willing to discuss their revenues publicly at the same time that I was scripting this video.
I also suspect I’m not going to say anything he doesn’t already know.
Let’s dive into the numbers.
From his massive audience, Max says that he averages £12,000-£18,000 per month from YouTube ads.
It’s numbers like this that draw many people towards content creation.
So…what’s the issue?
Well…
Max Fosh has two full-time employees. And he lives in London which is very expensive. He’s gonna need to take a reasonable wage to pay his bills and he’s gonna need to pay his employees good wages too.
I have no idea what he pays his staff, but let’s assume the three of them all take a modest London salary of £40,000 (or around $50,000) per year.
Including taxes, pension contributions, random small expenses etc. that brings us to roughly £138,000 in costs just for himself and 2 members of staff, it’s £11,500 per month.
Remember, Max said the channel typically earns £12,000-£18,000. So, we’re already at the low end of that amount and that’s from employee expenses alone.
Max doesn’t hide away from this.
“that immediately goes to the cost of the company, the team, the ideas den, rent—before I’ve even filmed a video.”
So this is a content creator with 2.7 million subscribers who gets an average of more than 2 million views on every new upload, with just a small team behind him, and he openly admits that doesn’t make much profit from the YouTube side of things – and YouTube is meant to be the holy grail of earning money as a content creator – assuming you want to keep your clothes on.
On Max Fosh’s channel, YouTube ads pay for wages, rent, equipment and other essentials, and brand deals pay for the production of videos.
You could argue that not every content creator has these high expenses which is a very fair counterpoint, but not every content creator gets more than 2 million views on every video they upload either.
Has your opinion changed on how much typical content creators with 1 million subscribers might be making – the type many people watch and aspire to be like – the type just like Max Fosh but much smaller in size?
And even if it hasn’t changed – plenty of channels figure out monetisation – earnings are just one part of this. There’s an even bigger issue that we need to talk about.
Have you ever heard anyone mention The Creator Trap?
Would you be happy to get 1 million views per month?
Let’s run a quick calculation:
Working with an average RPM of $2, which means you earn $2 for every 1,000 views your video gets, you need 1 million views to earn $2,000.
This means you need to get 1 million views every month to get $2,000 every month.
In most highly developed countries, $2,000 per month before taxes, or $24,000 per year, is significantly below the national average salary, and isn’t even minimum wage in most states in the US.
It’s pretty hard to get 1 million views per month, every month, especially if you ever want to take a break from uploading.
On most videos, views don’t just keep going up forever – they flatten off, or go through periods of growth and stagnation. Many videos die just a few days after they go live, especially when you’re not someone that really knows what they’re doing.
You have to keep pressing that upload button to try to guarantee your income. Or at least, that’s how creators typically operate because they’re going about things all wrong.
So content creation might not be particularly well paid, especially if you want to hire an editor to help out, and you have to put in a lot of work to build yourself into a position where you’re able to consistently generate 1 million views per month in the first place, and then even once you’re there you have to continue putting in lots of effort to keep the view count high enough to pay the bills.
Most creators are stuck like rats in an experiment: continually hitting the upload button because of the dopamine from that new upload feeling, fulfilling the desire to get something new out there, the thrill of seeing if your latest video is a top performer, to receive comments from strangers, to grow your subscriber count, the pipedream that one day everything will pay off – all of these feelings outweigh the desire to actually put food on the table.
YouTube leans into this too. They continually encourage people to upload more frequently because they want more content to recommend to viewers.
There is a much better way to do things as a creator, but you have to understand the final pitfall first:
Most people are aware that it takes a long time to make it as a content creator. That’s not the pitfall.
It’s commonly understand that as a creator your success looks like a J-curve, where there’s a lot of time before any real results happen where content creators are slowly building up their monthly views, earning far less than $2,000 per month, it’s a rat race that feels like it’s never going to end. But when you cross that threshold into mega high views and subscribers and earnings, you will be set for life.
But the worst part that people don’t seem to know…that J-curve, the trajectory that a creator’s success is mapped out on, doesn’t look how you think it looks.
Due to survivorship bias, you only see the big creators that are still doing well and have been doing well for a long time and you totally forget about all the people you used to watch but haven’t seen recommended to you for 5 years.
People lose relevance and the algorithms they rely on can stop recommending their content – they lose views, and revenue. Fast.
Or you can get cancelled.
Or, you can get banned for frivolous copyright claims.
Or a simple algorithm update can destroy your views overnight.
Or a war can dry up the influencer advertising market meaning you can no longer get brand deals.
Or, maybe even the platform you make most of your money from decides to shut down. (like Vine).
Very few people manage to have extreme longevity in content creation.
The curve for regular content creators should actually look more like this…
Years ago, there was a footballer called Michael Johnson. He played for Manchester City, was tipped to be a future England captain, and earned a reported £40,000-per-week at the age of 22. But by the age of 24, injuries and mental health problems had ended his career. And by 26, he was an estate agent.
Whilst Michael Johnson’s trajectory in football was rare, it’s much more common for those in content creation.
Becoming a content creator is a bit like being a lower level professional football player.
The players at the true top of the game are going to build generational wealth in the years where they’re in top form, and these are the creators you see everywhere, but for tens of thousands of players at the slightly lower levels, you’re just paying the bills with a fun job that requires a lot of running around during your working hours.
And once you’re no longer fit enough, or relevant, you suddenly have very little income at all.
Just like with football, most people get into content creation because they’re dreaming of an early retirement; they enjoy the work, but most would be lying if they said their aim wasn’t to make bank and sail off into the sunset.
When you’re doing it wrong, which most people are, content creation is an average paid job with a lot of work and stress, and whilst you technically have no boss to answer to – you’re still a slave to the algorithm, or your audience, or usually both.
And a huge variety of factors outside your control can destroy your content career overnight.
If you rely on views, you are stuck in the creator trap.
If you don’t know how to escape this trap, even if things are going well right now, there’s a good chance you’ll be an estate agent in 5 years time.
If you want to know how to escape the creator trap, and build true wealth and freedom as a creator, watch part 2 to this video.