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Opinion

How the Looming Recession Could Galvanise the Creative Industry

Economic uncertainty fuels creators — brands should take notice.

What happens to the creative industry after years of economic upheaval, the worst public health emergency in over a century and an even more chaotic inflationary outlook on the horizon? It should push those creators into the most innovative and opportunistic period of their careers. Despite the uncertainty ahead, creators are one of the best-suited groups to navigate during crisis mode and meet the unexpected challenges of the near future and brands should take notice.  

The creative class rocketed from a buzzword in the early 2010s, to a trend, to a legitimate workforce driving some of the biggest marketing campaigns in the world, all in about a decade. Creators utilise a range of media; primarily short-form video, but also photography, graphic design, music and even cryptocurrency. Over 50 million individuals now consider themselves part of the creator economy, with a global market size valuation of $13.8 billion

Businesses of all sizes now need to constantly produce real-time content to remain competitive in today’s fast-paced environment. Gone are the days of one or two agency-led campaigns per quarter driving the bulk of a company’s sales. With the rise and proliferation of platforms like Instagram, Twitter, Snapchat, TikTok, YouTube and even minting NFTs changing the nature of the game, there needs to be a daily — sometimes hourly — stream of content to engage with consumers and followers. 78% of online adults said creators were influential to help them discover new brands. 

The need for more content generates opportunities for creators to monetise their talent and be paid directly for their work. The tools to do so have become more accessible — financially, technologically and collaboratively. The established audience of top creators has pushed brands to recognise the lucrative return on investment to monetise influencer reach. These brands have become adept at paying creators to harness their platforms of choice to advertise products and services.  

But while the concepts of what a creator is and can achieve have evolved, so has the roller coaster of the economy causing them to cope with constant adversity and still thrive.

An economy on the brink

We don’t want to sugarcoat the current status of the economic environment. According to a Bloomberg survey of economists, the U.S. has a nearly 48% current median probability of hitting a recession in the next year — that number is up from a 30% probability in June 2022. Government officials have gone on the record to say a downturn is ‘not inevitable,’ but two separate recent interest rate hikes by the Federal Reserve and an 8.6% year-over-year U.S. consumer price inflation increase begs to differ. 

With the Covid-19 pandemic persisting, we cannot forget about how it has produced a new normal across countries, cultures, and businesses. Industries were forced to make unprecedented decisions and will continue to do so due to the current economic climate.

The point is that the creators that have learned to balance their content across constantly evolving platforms to become full-fledged businesses that have the best skill sets to ride this looming recession out. 

The latest inflection point for creatives and businesses

The seemingly constant instability born out of the Great Recession, all the way through to the pandemic, is what set the stage for the creator economy to gestate and flourish along with the rise of countless new platforms, technology and media. 

This has given rise to creators and teams working in optimal ways that are personalised to them. There’s not necessarily pressure to come to an office, they’re not limited by what tools they can use and they aren’t constrained by set working hours. It’s a catalyst for new opportunities. 

From the brand perspective after the 2008 recession, royalty-free licensing and subscription-based licensing emerged, allowing customers to access new offerings and creators to make new content without boundaries. Once again, creators can meet the moment to bring on some of the most innovative ideas.

In terms of what’s next for artists, many may look for chances to monetise beyond branded work and via social media. Additionally, as large influencer work started to dry up at the beginning of the pandemic, it shifted towards micro-influencers. Now, brands and marketing teams are looking to stretch their budget as much as possible with user-generated content as they pause marketing to save cash.

Brands will look to diversify revenue streams as soon as possible and monetise against past content. Whether it’s hiring reps, considering specific freelancer platforms or selling artistic works online, there are many different ways both creatives and brands diversify revenue streams. 

Stock media is also of interest to brands during hard times because they can get immediate access to content, meaning it’s easier to leverage stock footage with a mix of other creator-specific content while controlling costs. Brands do not want to dump all their budget on larger creators because it’s so expensive, and they’re wary of the unknown, so this presents an even bigger opportunity for smaller creators who produce niche content.      

Looking back, creators have ridden the wave of opportunity as the wider economy around them went boom and bust. The skills that prove optimal in unstable times will win out because creators don’t have to compromise to work on their own terms. With the future uncertain but looking grim, survival instincts will kick in for creators to supply the ROI on marketing spend that brands need to sustain their future growth.