Can Subscriptions Boost Creator Economy?
Many players in the content space have been looking at alternatives or additions to the ad-based revenue model to diversify the income sources
A few months ago, Instagram reportedly started testing monthly subscriptions in India. According to news reports that quoted an Indian Twitter user who spotted the testing, Instagram may soon roll out the new feature.
In the US, the Meta-owned photo-sharing app officially announced in January 2022 that it has started testing the subscription model with a handful of creators who would be able to set a monthly price of their choice, unlock a "subscribe" button on their profile and offer a lot of benefits to their subscribers. "With Instagram Subscriptions, creators can develop deeper connections with their most engaged followers and grow their recurring monthly income by giving subscribers access to exclusive content and benefits, all within the same platform where they interact with them already," said the platform in a statement.
"It's not surprising that Social 1.0 companies such as Facebook, Instagram, YouTube, Twitter, which primarily earned revenue through ads, are exploring subscription options. In the ad-led model, the platforms made all the money by selling the user data to advertisers, while creators earned almost nothing. As a result, creators were forced to do product placements and affiliate marketing to earn money. With the balance of power shifting towards creators, the subscription model seems to be the way forward," said Vivek Saxena, co-founder and CEO, Thinkly, a mini content blogging platform aimed at content creators.
Solving the Monetization Challenge
Neha Nagar, a finfluencer and founder and CEO, TaxationHelp.in, is excited and looking forward to this feature in India soon. "As we don't want to be dependent only on brands, I am super excited for this feature because at some point our audience doesn't like too much of branded content. So, this will allow us to focus on more genuine content. Both micro and macro creators will get the most benefit out of it as they don't get as many brand promotions, so they can upsell any content without taking the help of any third party," she said.
Most creators believe the subscription feature will not only improve monetization for creators but also give them a more free hand in creating exclusive content for their audience. "This will in return also serve better to the audience. We already have witnessed the benefits of this feature on YouTube and it really would help the creators set their own niche while simultaneously interacting with a bigger audience. This is going to create a predictable income for them which obviously is a good thing for the creators," said Prafull Billore, founder, MBA Chaiwala, who has more than 8, 33, 000 followers on Instagram.
Creators also think the subscription feature will encourage and motivate more creators to get on the platform. "Instagram is surely one of the "you can't imagine Internet without it' platforms and now the feature will also allow more people to make quality content and create a passive source of income. Having to share exclusive content for their community will definitely improve and expand not just their reach but also allow them to earn at a larger level which is great for all creators out there," said Aayush Tiwari, VP, talent management and music business, Monk Entertainment.
Subscriptions, the Way Forward?
Many players in the content space including social media and digital news media have been looking at alternatives or additions to the ad-based revenue model to diversify the income sources. YouTube already has this feature, called YouTube Premium. Twitter started something similar in September 2021 called "Super Follows', allowing users to generate revenue and engage more exclusively with their followers. Substack, Patreon, Medium and many others have also pulled out the same card. And now, Instagram taking the same route proves the possibilities features like these hold.
"The big difference is that the definition of content is changing every day. Earlier we could not have imagined people signing up for 30-second reel content but now they do. So social media is not just a place where you give away your life updates or share your life experiences. It is now being dominated by the content-oriented part in the sense that people are actively choosing this platform to put out their creative selves and create videos and reels specifically for this platform and their followers," said Billore.
Nagar told us how she and other creators have already been getting lots of traction on paid courses, live streams, workshops, and much more. "This actually helps the audience to get all the premium quality content in one place. When there is plenty of content, the subscription model will help the audience to consume the content they actually want to see and save their time," she said.
Tiwari believes subscriptions can be a good start for not just established creators but also for those who have just started their journey. "With Web3, creators are now exploring the new realms of social media and this is just the beginning," he said.
Challenges For Some Or Win-Win For All?
Some, however, foresee that the subscription model would only benefit the creators with a large follower base. " One would only pay to watch videos or reels of macro-influencers or creators and the smaller ones would eventually lose out. This would lead to a large segment of influencers or creators looking at other platforms for monetization. Given that social commerce is a burgeoning opportunity in India, influencers would flock to apps such as Woovly and Trell to help monetize their content," said Sumir Verma, founder and managing director, Merisis Advisors.
Further, experts opine that the reason Twitter's recently launched super-follow and Facebook Stars have met with limited success so far is that the users don't want to start paying for content, which they otherwise consumed for free. "Also, as influencer segment grows further and we will see large influencers coming from tier 2 and 3 towns for whom this would be more than a passion project or for the love of likes. They would approach this with a serious mindset with an aim to drive monetization, so yes, subscription-led platforms will be the new social media but legacy platforms like Instagram and Facebook will either have to change their approach or launch smaller platforms to help influencers and content creators monetize quick," said Saxena.
Overall, it may be too soon to call it a win-win situation for all as many users may not be ready to pay for it. "Instagram is something people just casually go to and scroll till they are clenched back to real life. Now putting a subscription bar would limit the accessibility which can create a negative buzz," said Billore.
Another key question is if creators manage to provide content that justifies the money that they are paying. That is why many feel that as long as the creator offers good content and maintains a perfect balance between organic and exclusive content, it won't upset the audience. "If I religiously follow my fellow favorite content creator, I wouldn't mind spending a few bucks if I am walking away with exclusive content and a chance to interact. Creators, on the other hand, shouldn't take advantage of this and fool their audience. Any new feature is just a software update and as long as mutual harmony is maintained, the ecosystem gets used to it," said Tiwari.