The future of the freemium creator

How creators can use major platforms to establish their own IP in owned environments and in their professional relationships.

I recently pulled up a virtual chair to listen to episode #34 of the Means Of Creation Podcast by Li Jin and Nathan Baschez. Their guest here is Gustav Söderström (Spotify’s chief R&D officer). He offers a lot of insight into Spotify’s journey from being a freemium business for consumers to now enabling audio creators to thrive with freemium tools, starting with their podcasters.

Gustav made a point which got me thinking about ‘rented and owned environments’. This is something I’ve banged on about for a long time to the creators I meet: the importance of owning the connection with your audiences and fan base, even if it’s just with a portion of them.

I care so much about owning your audience because I once lost my audience (almost) overnight as a creator renting my engagement with our user base.
We ran Messenger chatbots, Facebook Groups and websites which served as communities for sports fans, with over 40K active daily users in our chatbot alone. This conversation-based environment was handled via Facebook Messenger. This was great until the tech giant introduced several restrictive measures to improve the quality of Messenger bots for users (and also forced chatbot admins to spend more cash on Facebook Ads to re-engage their already acquired Messenger audiences). This included the 24+1 hour rule and tags for broadcast messages. The outcome was akin to having to re-subscribe to an email list every day to keep receiving emails from a publisher. It sucked for those who had built their audiences on the platform… it sucked for me!

Of those in the chatbot, I had only acquired the email addresses/phone numbers of around 15,000 users. It was a massive hit to our audience, but starting to use this owned connection to push fans into our owned environments (website, forum, WhatsApp) is what ultimately saved the business.

We all know of stories where influencers have had their accounts hacked/deleted, those who struggle to keep the engagement rates, and those who do something which offends the platforms (and sometimes half the world) resulting in bans e.g. Donald Trump.
So this is why I am always so pleased when I see creators unbundling themselves from the platforms that wrap around their creative existence. Protect their business and their future.

Rented <&> Owned Environments

Firstly, the point of an owned environment is to own the relationship. I’m totally aware that you don’t own WhatsApp, WordPress or your email service provider. But you can own the data and relationship, and – within the confines of law - set the rules of the engagement.

Secondly, platforms are great for creators generally and are largely responsible for the rise of the creator economy. But this doesn’t mean that creators owe them their life’s work. Platforms perform incredibly well as top of funnel content in discovery; early engagement; and easy content creation. But they ultimately want to keep users and creators on-platform, which confines creators to the rules of the environment, and a restricted connection to those who support them.  Segregation and exclusion, effectively.

A great example of this how this excluded a niche of creators - and led to the birth of a whole new type of platform - is the world of online adult content. OnlyFans gave power to creators by providing a space away from the censored difficulties of Twitter and Instagram, with a DTC approach and the financial infrastructure of subscription paywalls. This was the beginning of the freemium creator - a game-changing model which is now tip-toeing out to the wider creator economy.

OnlyFans enabled excluded creators to create complex and effective conversion funnels with monthly recurring revenue, which the creators set the price for. Yet the platform also takes a large cut of the income generated. Once again, creators find themselves in a rented environment where they don’t truly own the access to their fanbase. It is OnlyFans who have the ability to connect with a user off-platform (email, phone, etc), not the creator.

Freemium is the future and recurring revenue is the royalty of it

Simply put, a freemium model offers core services for free, but then charges for the advanced ones. This is the model that tools like Gmail, Zoom, Calendly and others work from. Quality publications are particularly fond of it.

As all creators know, to succeed, users must find value in your content. That’s why they continue to engage/follow/like/swipe/subscribe/buy... On top of this, creators need a hub where potential fans can discover their content, and platforms are the perfect top of funnel entry point.

Alongside in-platform features like story links and ads, tools like LinkTree help creators guide their fans off-platform to other environments (and often to their accounts on other social platforms). These Link In Bio tools are perfect to guide fans into owned environments, whether that be a website, app, email list, Telegram, Zoom - or even live events!

These are the environments where creators can monetise creations directly from fans and take payments in the form best suited to them. The big difference between an owned home and a rented one is – the landlord can’t change the terms of your contract.

More on this later, but at Monet we’re working on providing a 100% free payments and a subscription tool for creators to embed anywhere, giving them commission-free monthly recurring revenue. This embeddable tool will pay income directly into your Monet bank (e-money) account. Allowing creators to earn from every platform at no cost.

+£1M per year isn’t just for the superstars

So here’s really what I’m working towards…

According to Statista, there are around 1 billion active Instagram accounts globally, with c. 19.5% having >100K to 1M followers. Based on a survey of c. 35K accounts.

Now let’s follow the 1000 true fans principle…
It only takes 1000 of your audience to provide you with £84 per month in subscription revenue to break £1M a year in earnings.
Does that still sound like a crazy feat?
Well, how about 10K fans (2.5% of your audience) paying you £8.40 per month to make you £1m+ per year. Never even minding for the likely brand deals, sponsored content and affiliate earnings you’re bound to be offered.

Simple calculations, so I may as well talk about micro-creators whilst I’m here.
As a creator with a 20K following, earning £100k per year is as manageable as 500 followers (2.5% of your audience) offering up £16.70 per month.

Oh yes, this is the Patreon world i’ve kind of just described - A product we love and in my view leading the way in allowing creators to take their fans offline with ease and providing the tools to serve fans in many ways… With Patreon you own the relationship (finally!)… For an 5-12% fee (or £50,000 to £120,000 on your £1M) before income and sales taxes.

To summarise my rambling, I believe the most successful creators will be the ones that turn major platforms into their entry point and own their engagement and revenue streams from their followers. This model will also allow highly skilled creators who are increasingly unbundling themselves from the world of working for corporates, to start creating content full-time as self-employed workers. Making the move a lot faster with more financial security.
To compound the success here, when fans are paying for content… what could possibly be a stronger signal of quality influence? Brands looking for new partnerships should see this data as the a top indicator of engagement when collaborating.

Many creators are already taking the first steps into this dynamic, from the mega to the nano. One of my favourite creators is a shining example…

Musician Casey Lowry (follow him) plays on Reels trends to create funny and catchy songs with a giant smile, using LinkTree to push followers to his live music events, Patreon account and even Discord community (@Casey, we’ll soon have you covered on Discord paid subscriptions ✌️).

Watch Casey

And as for brand partnerships

P.S. the principle of building an owned environment also applies to the relationships creators form with brands they partner with. I’ll write about this another time on how creators can use the financial technology and payments tools we’re building at Monet to build long-lasting and very lucrative relationships with brands, rather than just one-off transactions for content which other creator fintech platforms cater for. Stay tuned!