‘The opportunity has never been bigger’: How the creator economy has opened options for creators to profit from their intellectual property

This article is part of a cross-brand Digiday Media series that examines how the creator economy has evolved amid the Covid-19 pandemicExplore the full series here.

“Intellectual property” is a term often reserved for the Disneys of the world that have been able to take characters like Mickey Mouse and franchises like Marvel and squeeze them for licensing revenue in the form of product lines and content syndication deals. But individual video creators are also now getting in on the act.

Over the past decade, creators have increasingly struck deals with companies like retailers to license their likenesses for new product lines. They have even formed their own commerce businesses pedaling everything from cosmetics to clothes to coffee. More recently, companies like Jellysmack and Spotter have emerged offering to pay creators millions of dollars in some cases to license their video back catalogs. Meanwhile, non-fungible tokens (NFTs) provide the next potential opportunity for creators to spin off new revenue sources from the content they have created and audiences they have accumulated.

“I’ve definitely seen the opportunities increasingly arise for our clients,” said Mahzad Babayan, digital talent agent at talent agency UTA where she has worked with creator clients to create standalone commerce businesses based on their content channels.

“The opportunity for creators to monetize their audience has never been bigger,” said Reza Izad, co-founder and partner of talent management firm Underscore Talent, which represents creators.

One reason for the explosion in IP monetization opportunities for creators is the explosion of the so-called “creator economy.” While creator-centric companies like talent management firms and multi-channel networks existed a decade ago, in recent years companies with more concentrated focuses — like commerce or content licensing — have sprouted to widen the spectrum of creators able to derive new revenue from their content and followings. Creator economy companies of this sort in the U.S. have raised more than $6 billion in funding since the start of 2021, according to The Information.

“The creator economy is the democratization of that IP flywheel that Disney has perfected and has put it in the hands of individual creators,” said Andrew Cohen, manager at strategic advisory firm RockWater.

“Through the money [being invested into creators], it shows us that there’s a value in content, that there’s a value in IP,” said Jake Webb, founder and president of talent management firm Slash Management.

Cases in point: Jellysmack and Spotter plan to spend $500 million and $670 million, respectively, in the coming years to license creators’ video back catalogs. “We’re doing deals for as little as $10,000, and we’re willing to do up to $50 million-plus,” said Spotter founder and CEO Aaron DeBevoise. Meanwhile, over the past 10 years, digital studio and content rights management firm Collab has paid more than $200 million to creators in content royalties, according to chief strategy officer Eric Jacks. Additionally, Fanjoy, which works with creators to develop and sell merchandise, has paid out more than $50 million to creators since 2014, according to its founder and CEO Chris Vaccarino.

However, these companies are not limiting themselves to the top 1% of creators with mass followings. Instead, they’re supporting a wider spectrum of creators. For example, while Jellysmack has done deals with creators who have tens of millions of subscribers on YouTube, it has also signed ones with creators who have as relatively few as 50,000 subscribers, said Jellysmack president Sean Atkins.

The extension of IP monetization opportunities to mid- and smaller-sized creators evinces not only the expansion of the creator economy but also the growing recognition of creators’ influences on their audiences. That is especially apparent when it comes to commerce-related opportunities, such as creators licensing their own brands to other companies or forming their own companies.

“We’re starting to see a lot of these ‘mid-level’ — I say that in air quotes — creators really pop into having a heavier hand in their own brands or even just more so of a collaboration aspect with their favorite brands,” said Evegail Andal, founder and CEO of talent management firm Matter Media Group.

These brand licensing opportunities largely originated with so-called capsule collections that creators would work on with established brands, in which the brands would license a creator’s likeness to attach to a product line, said Ali Grant, founder and CEO of influencer marketing agency Be Social. The addition of links to Instagram Stories helped to open these opportunities to more creators because the links’ performances provided evidence to prospective brands of whether a creator was able to motivate their followers to visit a product page and make a purchase, she said.

Fanjoy uses a similar exercise when evaluating creators for merchandise deals. It runs a test for creators to send their audiences from Instagram to a pop-up page on Fanjoy’s site to provide their email addresses or phone numbers prior to launching merchandise with a creator. “The [creators] who can drive a thousand initial emails or phone numbers give a sense of who can sell product,” said Vaccarino.

For as many opportunities as there are today for creators to monetize their IP, the number is only likely to grow. The back catalog licensing deals to date have largely focused on syndicating creators’ YouTube videos to other social platforms like Facebook and Snapchat, but the surge of streaming services provide an even wider array of outlets. “There are opportunities out there [in streaming], and those will come to light in the next six to 12 months,” said Babayan.

Looking even further out, there is the opportunity for creators to monetize their IP in the form of NFTs. To be clear, this is already underway, with creators like the Nelk Boys raising $23 million from an NFT collection in January 2022.

“The technology is there, and it all adds up to why we’ve been having this conversation. It all adds up to rights management,” said Webb. He added that NFTs offer “a lot of opportunity for creators and changes even the conversation of long-term rights management, long-term copyright.”

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