Which companies will benefit the most from the ongoing growth of the creator economy? The platforms that are best positioned to attract both influential creators and a larger share of the total spending are those that will offer multiple forms of monetization, according to Goldman Sachs Research. But the analysts also cite six key enablers for creating a “flywheel effect” in which small gains build on each other over time and create further growth momentum:
1. Scale: a large, global user base with diversified interests
2. Capital: access to large pools of capital to fund monetization, either through a diversified revenue base and/or as part of a larger parent company
3. Strong AI-powered recommendation engines: for surfacing relevant content and matching creators with interested users
4. Effective monetization tools: a variety of product offerings/payout structures for creators to diversify their income streams
5. Robust data and analytics: for providing transparency on engagement, retention, conversion and other metrics
6. E-commerce options: the ability to shop is integrated into the core user experience
At least at this point, the report points to the large incumbent platforms as being in the driver’s seat. Goldman Sachs Research sees more creators moving to these platforms as competition heats up for their content and audiences, particularly as macroeconomic uncertainty impacts brand spending and as rising interest rates pressure funding for emerging platforms. “As a result, we expect some element of a ‘flight to quality’ whereby creators will prioritize platforms with stability, scale and monetization potential,” Sheridan writes.
This article is being provided for educational purposes only. The information contained in this article does not constitute a recommendation from any Goldman Sachs entity to the recipient, and Goldman Sachs is not providing any financial, economic, legal, investment, accounting, or tax advice through this article or to its recipient. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this article and any liability therefore (including in respect of direct, indirect, or consequential loss or damage) is expressly disclaimed.
Source: goldmansachs.com
