💸 Revenue-Based Financing for creators
A real alternative financing solution for the Creator Economy?
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In February 2022, Spotter, a scale-up launched three years before, raised $200M, became a unicorn, and announced that it will invest $1B in creators. A billion dollars! Even the biggest creators funds we have seen during the golden age of the Creator Economy (2020-2022) did not engage on this level of funding! So how a single platform could promise to engage a billion dollars on creators?
It’s thanks to an operating model, well-known in the tech ecosystem: the Revenue-Based Financing! You have may heard about these startups presenting a financing alternative to the equity fundraising and corporate debt.
The Revenue-Based Financing (RBF) is an operating model where a platform offers to a company direct funding in a shorter time than a bank loan process, without need to put their assets as collaterals or setting up a reimbursement plan. The RBF platform makes an agreement with the corporate client to take back their money by collecting a portion of every dollar earned by the client, until the payment of the initial funding, plus the margin of the RBF platform. Because of the flexibility of the model and the default risk owned by the funding providers, these RBF platforms have to only focus on the best forecastable revenue model: the SaaS model. The SaaS model is the best model to predict the volume and sustainability of future revenues.
The model functions pretty well, and its particularity that it is a non-dilutive financing option that only accounts on a predictable revenue generation machine, and some companies have seen this big opportunity from the lack of funding access that the creators are facing.
So let’s explore the Revenue-Based Financing for creators!
What is the burning need behind the rise of RBF solutions for creators?
The creators need funding to be able to scale the activity and accelerate their growth.
The creators want to do what they love - produce content, and live on that. They have to grow their audience and ultimately, their community, in order to directly and indirectly monetize it. The more they offer new content, the more they could grow the audience and community. The more they grow their audience and community, the more they can earn money.
If the creators want to produce more content to do what they love, grow their community, make more money, they will have to grow qualitatively and quantitatively their content portfolio, like their YouTube video channel. However, growing their content portfolio means spending a significant portion of time to create and produce content, and money to pay for all the physical and digital resources needed for the production and an efficient promotion (the distribution part is taken in charge by the platforms).
The money will buy the creators new tools that could upgrade the content quality and reduce the content production time, or directly buy them time: either by hiring people that could operate time-consuming and low value-added tasks.
Furthermore, growth needs to try new things, and to try new things, we'll need money to buy the needed resources for experimentations and time to brainstorm and develop this content experimentation. So the creators will need money to develop new content formats, and grow upon them.
So, all the issues converge to an item: money!
This leads to the impossibility to get access to conventional funding solutions.
The creators don't have a direct access to standard funding solutions, that are the corporate subsidy, the corporate debt and common equity fundraising, among the most popular ones.
Content creator is still assimilated at best as a professional career, at worst as a time-consuming hobby. The creators, for the overwhelming majority, are not considered as companies. The regular companies are validated because the personal entity and the legal entity are separated: a company could legally generate revenue, grow, and pay its liabilities without enforcing its founder, the personal entity, and that could still generate revenue independently of the state of mind of its founder. The creator is like the freelancer, a personal entity that generates revenue that is intrinsically connected to the state of mind of the personal entity.
As a financing institution, you are pushed to propose corporate solutions to companies rather than individuals, because you could not “own” an individual because he doesn't pay its debt or respect its engagements, but you could do that to a company. So, financing institutions are not incentivized to develop specific solutions for creators: a lot of solutions for individuals exists after all.
On the other hand, the other creator financing solutions find their own limits.
As the corporate world financing solutions difficulty apply to the creator world, this latter has developed new financing solutions.
👉 The first one is the creator fund. Built on the same rationale than the VC fund (fund future champions that could make me get a very good financial return on investment), the creator fund, like Snap Spotlight or Pinterest Creator Fund puts tickets on selected creators that in return will create content on their platform thanks to this fresh cash, and bring new viewers and views to the platform. The platform will leverage these views and viewers to generate more ads revenues. Between the end of 2020 and mid-2022, almost all the big content distribution platforms and even Creator Economy scaleups developed their in-house creator funds.
But their impact for creators some limits: the amount offered to creators are very limited (several thousands of dollars for the best creators) for high demanding requirements to meet, and the content distribution platforms seems to not meet the expected ROI and the unexpected tech winter market led to large layoffs in the Creator Economy ecosystems, but also the shut down of creator funds like the Spotify Greenroom.
👉 The second one is the social token. Coming from the Web3 wave, the social token is the opportunity for creators to raise money. Each creator will be able to raise money through the tokens indexed on the work of the creator on platforms like HumanIPO. So, the creators will leverage on its superfans to buy their tokens.
But, like crowdfunding, a consumer-focused fundraising needs very high engagement from a pretty large fanbase to be able to raise a reasonable amount. Furthermore, the creators engage their responsibility to their fanbase to pursue the consistent production of high-quality, which could be difficult because of the risk of creator fatigue, and the potential loss of creativity thanks to the right of the social token on the creative strategy of the creators.
So, if the creator fund is the equivalent of the subsidy, and the social tokens are the equivalent of the equity fundraising, the revenue based financing is the alternative of banking loan for creators.
Beyond the need of the creator, what are the macro trends and signals leading to the rise of RBF solutions for creators?
At first, the Revenue-Based Financing has made proof in the startup world.
The RBF is originally a sub-vertical of the tech ecosystem, dedicated to fund SaaS companies. The company presents their metrics, and obtains a cash advance according to its financial capacities, at the difference that the startup has to completely reimburse the cash advance, plus an interest rate (higher than a regular corporate loan, given that the credit risk taken by the RBF platform). The RBF model works pretty well: in France, we have Silvr or Karmen that are the flagships of this sub-vertical.
This model offers a strategic value proposition: if you could provide clear vision about what you will do in the next 6, 12 or 18 months with predictable criteria, you could guarantee the reimbursement for companies that use to deal with uncertainty all along the way due to their own nature. Thanks to revenue prediction coming from the recurring revenues, the RBF platforms could offer almost instant cash to risky companies.
You know what? The creator world is the same.
How? Some creators are able to generate recurring revenues thanks to the video platform YouTube. With the AdSense revenue, coming from the content assets that the creator has built on YouTube, every month they know they’ll get a payout from ever-increasing engagement on their past and new content.
Today the YouTube video is the best content asset that the creator is able to generate recurring revenue from itself, but other formats like consumer subscriptions from digital courses or paid newsletters could be targeted.
So, why focus on YouTube? Because the digital courses and paid newsletters are both indexed on all the content, video or text at the same time, not divided between each piece of content, so that so the creator will have to let each % of his revenue to the RBF platform, instead of only the specific portion of his content. So his content could be cut and profitable.
Furthermore, like the SaaS metrics, the YouTube videos algorithms rewarded the high level of viewer engagement that could be piloted by the metrics and the content strategy of the creator.
So, the choice of this sub-industry was to focus on YouTube AdSense, and focusing on YouTube monetization it’s not a discovery in the Creator Economy.
Exploiting YouTube videos is not new.
Some startups used to leverage YouTube videos. Aaron Deboise, before co-founding Spotter, one of the leading stakeholders of this niche, used to monetize YouTube videos with two previous companies. He launched & operated between 2006 and 2014 Machinima and StyleHaul, that are YouTube Multichannel Networks (MCN).
A MCN is a video channel that partners with multiple creators in exchange for exposure. The organization works with video platforms to offer assistance to a creator in areas such as product, programming, cross-promotion, partner management, digital rights management, or sales and audience development, in exchange for a percentage of ad revenue from the channel.
The MCN has understood that the YouTube videos could be media assets that sustainably generate revenue and live upon them, and that could be predicted thanks to real-time analytics. However, one of the main flaws of these MCN is that the coverage and duration of these partnerships was pretty blurry, locking some creators with the MCN without concrete solutions.
So, the Creator RBF solutions are the next evolution of these MCN with the addition of financial layer and contract terms clarity.
Ok cool, so what is the value proposition brought on the table?
A 3-part approach.
A tailored access to funding.
The Revenue-Based Financing solution offer to creators a direct & quasi-instant access to funding without giving up their precious IP ownership. The funding access is in exchange for the most precious asset of the creator, aside their fan communities: their “old” content. In fact, the platform licenses the rights of the creators’ back catalog - the back catalog is the gathering of all the works previously produced by a creator that could produce ongoing revenue, like royalty streams or tech platform ad revenues.
So the creators don’t have to reimburse the funds: it is the responsibility of the platform to make enough money with the licensed content to recoup their investment and make their profit. If not, the platform will eat the deficit.
In average, the funding would amount from $15k to $1.5M according to Spotter, but the amount could reach much higher levels: some deals amount $30M. $30M for a creator! These amounts are usually found in articles about Series A and Series B tech fundraising rounds.
The RBF solution has an advantage: everybody is on the same page. The creators aim to generate money from their video catalogs to make their own living, and the financing provider wants to generate money from the video catalog to obtain its revenue share and make its profit. Furthermore, the RBF model doesn't require to take a fixed amount not correlated to the creators’ cash flows: the contract terms are very flexible in favor of the creators, who live on a monthly variable revenue.
How could the platform generate and increase the ad revenue? It offers a scaled media solution that enables advertisers and ad agencies to put their ads on ROI-efficient and 100% brand safe videos, connected to their targeted audience.
Full ownership over the fund allocations.
The creators have the freedom to spend the money on whatever they seem relevant to develop their content empires. The creators will think like any entrepreneur and would expense in tools, HR and marketing expenses. So, some creators will invest in physical tools (gear to develop the quantity and quality of content like cameras or mics) and digital tools. Others will spend the money in HR (recruit new team members to help on time-consuming and/or high-skilled content production and distribution steps), marketing (pay for marketing campaigns for their own promotion), travels (travel to filming locations, go to events to network with the ecosystem), merch (launch a product line or buy facilities) or workspace (rent offices that could be used for the videos).
This is one of the strong value propositions of the revenue-based financing for creators. With a personal loan, creators will have to justify the relevance of their expenses plan to people that may not understand the business particularities. Creators are creative people that could use unexpected means to develop their businesses.
Tailored help for the creator’s growth.
The challenge here about this model is to be able to push views on old content in order to maintain at least the revenue generation of old videos. How is revenue generation is maintained? By pushing the capacity on the back catalog, through its fresh content, and the reach of the old and new content.
So the RBF will engage resources to help the creator such as strategic advisory, insights sharing from content analytics, and creator partnerships with partner brands that the RBF platform works with.
What kind of creators do they target?
The target is the “A-list” YouTuber segment.
The Total Available Market (TAM) will be focused on creators being able to generate reliable revenue, sufficient enough to cover the RBF funding in a 3-5 years lifespan. In fact, like said previously, the potential deficit is on the RBF platform. In this TAM, we’ll find the creators generating revenue from content platform viewership, like the video creators and the musicians; the creators generating revenue from consumer subscriptions like writers of paid newsletters; or the creators with a merchant activity, with Shopify or Pietra shop owners for example.
The Service Atteignable Market (SAM) will be focused on the creators generating revenue from content platform viewership, and especially the eligible YouTubers. The viewership growth is more manageable because each piece of content generates its own revenue, instead of consumer subscriptions that consolidate all the revenues coming from old and new content: a consumer cannot subscribe to the old or new content only, it subscribe to all the package content if you take Substack or Beehiiv for example.
For this article, I have voluntarily decided to focus on the video creators: this segment is the pool commonly targeted by the existing platforms, because of the AdSense cash pool however we could just as easily have focused on the second most targeted by the RBF platforms: the musicians living on stream royalties. Each track listened by the consumer generates its own listening volume, which the audio streaming platforms uses to distribute the cash pool coming from consumer subscriptions and ads revenues.
An eligible YouTuber is a video creator that has a consistent high content engagement and is earning YouTube AdSense money for at least a year. For example, Spotter claims on their website that it focuses on creators that have consistently created content for at least 12 months, being able to generate at least 5M monthly views, to have 500k+ subscribers on average.
In this area of YouTubers, and the Creator Economy in general, the market lives on the power law. We have a oligopolistic market, where less than 10% of all YouTubers generate more than 90% of the AdSense revenue. This “high tail” gathers the A-list YouTubers. The “A-list” is in reference in the Hollywood industry, with the A-list actors, directors and writers, representing the artists that are part of almost every high-grossing movie of the industry. So the A-list YouTubers will be the target of the RBF platforms. In order to give a glimpse about their A-list YouTubers, check the map of CashNetUSA covering the YouTubers n°1 of each country, in terms of earnings.
Source: The 2022 YouTube Rich List - CashNetUSA
But also, specific YouTube channels.
Even if RBF platforms focused on A-list YouTubers, they have to choose wisely the most relevant channels to make a deal. Like in VC, the high percentage of money loss pushes to a very demanding channel selection. A selectable YouTube channel has to present a sustainable monetization model - with existing good revenue metrics, a high growth potential - such as a high CPM, be focused of safe verticals (no politics, no adult content, …), in compliance with the hosting platform policies, and an high evergreen potential.
A high evergreen potential video is a video with a stable interest. The video is not highly correlated to news or hype, that pushes the content to be rapidly outdated; but rather has the potential of long tails, and could bring back repeat viewers. A perfect example of high evergreen content is the tutorial video.
How is the revenue-based financing deal settled?
The creator has to go through a quick but highly selective process to be able to get the money!
Step 1️⃣ : The creator fills in the application form on the RBF platform, and gets contacted by the creator acquisition team that connects with the creator to know more about him/her.
Step 2️⃣ : The platform analyses the creator deal opportunity. If a creator wants to partner with the RBF platform, the data sciences team will analyze at least one year of his/her YouTube channel’s historical data and metrics, by connecting the creator channel with the RBF internal software, to evaluate the media asset, and check the business tenure and the clarity of business vision of the creator.
The first type of metrics targeted by the platforms are the video engagement metrics: the more your content has an audience that consumes and interacts consistently with the videos, the more YouTube to give to the creator AdSense revenue. Among these video engagement metrics, you have the average view duration (the percentage of a video viewers actually watch before dropping off) or the watch time (how much time viewers spend watching a creator’s content).
The second type of metrics analysed by the platform is the revenue and conversion metrics. The team will analyse the cost-per-thousand impressions (CPM), the View-through conversions (VTC) or the Click-through rate (CTR).
Step 3️⃣ : If a deal is possible, the M&A team sets up an offer for their back catalog from the channel analysis insights to the creator and some deal terms are negotiated with the creator. It could be the catalog licensing duration, the catalog coverage or the taken revenue share. At the end of the discussion, the RBF agreement is closed.
Step 4️⃣ : The platform sends the funding to the creator, provided with no obligation of reimbursement: it's an obligation of means, not of result.
Step 5️⃣ : The RBF operation is executed. The platform will takes some cents on every dollar generated on AdSense from the backed catalog, during some years.
The deal could be settled in less than a week if everything is crystal clear from both sides. A creator could make one deal, or several deals in their lifetime: the platform could generate a sort of “creator retention”. For example, MrBeast has concluded multiple deals with Spotter. However, the application approval rate is lower than the average VC game rate. For example, Creative Juice's Juice Funds announced in early 2022 that it had funded 20 creators for more than 10k applications (i.e. a 0.2% acceptance rate).
How the growth support is built and delivered to creators?
Beyond the core proposition of cash lending in exchange of revenue share, the platform sometimes offers a back office stack, which is dedicated to help the creator in his future business development, like new shows, new content formats, and his business extensions, like merch lines. For example, MrBeast has developed new Spanish channels and Aaron Brown launched a restaurant. It is the job of the creator success team, that answers to its client needs & help the creator to find growth opportunities with insights and advises on retention or thumbnail-clickthrough growth rates for the channel, and could help to set up new partnerships for the creator.
There are a double goal here:
👉 The creator will perceive additional value from the platform, that consequently helps the platform to gain brand loyalty from the client Creator and pushes him to become brand ambassador. The power of word-of-mouth is crucial in the top creator world, where the top 1% of the creators share between them the good plans.
👉 The platform helps the creator to develop his/her business, in order to help push the audience acquisition for the new videos, but also their old ones. When you discover a new creator, you love his current content, and you're willing to dive into his previous productions in order to be immediately more educated/entertained… So more views from new or current viewers for the back videos lead to new AdSense MRR.
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How does the RBF model work and make money?
The revenue model is in the name of the sub-vertical: revenue sharing!
The platform takes a percentage of every dollar coming from the YouTube AdSense program generated by the YouTube channels of the creator, licensed by the RBF platform.
The RBF takes between 2-8% of revenues according to an analysis of the Creator Economy expert Hugo Amsellem, for an average time between 3 to 5 years of licensing. So, to make its margin, the platform has 3-5 years to push the views on the back catalog to generate enough money to reimburse the cash advance, and make the profit.
What is the strategy to get the best creators?
The creator acquisition plan is based on several acquisition channels.
The most effective way is word-for-mouth. Given that the service is focused on established creators and top tier global YouTubers, the best way to acquire these A-list prospects is the referral between all of them. Like the services focused on high level C-levels and celebrities , it is a small world where the network is a go-to solution for trusted services. Furthermore, attracting big names could help educate the market by reassuring other A-list and B-list creators to use the service. I mention B-list creators because the platform has to reach a critical volume of clients to be able to generate high revenue, so that the B-list creators could become A-list and stay with the company when larger funding needs occur.
Another best way to attract creators is the partnership with ecosystem stakeholders. These stakeholders are in connection with a lot of creators, work closely with them and act like ambassadors to the RBF platform in case of funding needs of their creator portfolio. This network of gatekeepers is made up of talent agencies, creator managers, content distribution platforms teams…
What are the competitive assets to perform in the RBF area?
👉 The roaster of creators: A platform could differentiate from all others thanks to their track record, or Creator portfolio. The creators want to become the next MrBeast, so they want to copy its business moves,like this one. Furthermore, the best creators have an insane media coverage to use to spread the RBF offer. Spotter has some of the biggest YouTubers: MrBeast, Nasty, Aphmau, or Dude Perfect.
👉 A highly actionable creator gatekeeper network: Following the previous competitive asset, holding a powerful network of creator gatekeepers helps a lot to acquire the best clients. For example, Ezra Cooperstein, president of the creators' agency Night and co-founder of the Juice Funds by Creative Juice, provides access to an exclusive dealflow of top-level creators.
👉 The best valuation channel data science model: The RBF platform has to focus on channels that produce the best monetizable and evergreen-able content to be able to generate the highest ROI possible. If the data science team is able to develop the model to determine the most relevant market value of the channel, the M&A teams would be able to negotiate the best win-win deals with the creators.
👉 The capacity to help their creators grow : The value of the back video catalog can only increase if the partner creators gain more subscribers going forward, so the platform has a big interest to push the growth of the creator. For example, when a deal is settled with Spotter, the company will help on creator growth by using collected YouTube channel analytics.
Let’s get a look at these solutions
The RBF solutions
🟪 Spotter
I spoke a lot about the company in this article, since the beginning (It’s not a sponsored article, for your information 😂). Led by founder and CEO Aaron DeBevoise, the startup is entirely focused on the Revenue-Based Financing, the company, launched in 2020, has invested $330M in YouTube back catalogs of creators in more than 190 creators, including MrBeast or Dude Perfect.
Valued at $1.7B in 2022 from the last fundraising round - a $200M Series D round - Spotter is in position to reach the billion of dollars invested into YouTube creators thanks to this investment round. Now, the company claims that it has paid $775M to creators on 1160+ YouTube creators partnerships.
🟪 The Juice Funds - by Creative Juice
Creative Juice is one of the leading digital banks for creators, led by the CEO Sima Ghandhi. They launched a POC with MrBeast, the Juice Funds - a $2M fund that will offer tickets of $250k in exchange of their creator catalog from two years: Creative Juice recoup their investment from the AdSense program, but not only that revenue flow.
Contrary to Spotter, Creative Juice could take a cut from different revenue flows like the brand earnings. In this partnership, MrBeast acts as an advisor for the selected creators, and the digital bank will be in charge of the investment process and licence the stakes. So, Juice Funds invested first in 4 YouTubers for 250k each, and then planned to invest the last million in YouTubers and other creators for tickets between $25k to $250k.
The interest for Creative Juice is to give money to creators in exchange to open a bank account in Creator Juice. The money will arrive on a Creative Juice account that the creator will have used by signing up on the platform, and the digital bank could offer their financial products to their new clients.
Now, Creative Juice has launched a $50M fund, from an alternative lender, to finance creator businesses between 6 months and 3 years. The solutions propose an monthly deal (for 3, 6 or 9 months funding options) or annual deal (1-3 years funding options).
🟪 Slow Creator Fund - by Slow Ventures
Slow Ventures is a venture capital firm, not a company. The founder of Slow Ventures, Sam Lessin, launched the Creator Fund. The VC firm offered a RBF solution : they give a cash upfront payment, between $100k to $5M (alone or with potential co-investors) to the YouTuber in exchange of a cut of the creator’s future income (1-5% top) and the generated IP for 30 years.
The cash gives to the creator the freedom to focus on creative content creation, instead of making only sponsored content, and the VC firm acts like Sam Lessin said, “passive partners”, giving entire freedom of work to the creator.
This VC firm underlines an interesting step in the VC mindset, because the investors admit that a creator could be a capital asset, like a startup. So, the creator has to incorporate a business that will represent his career from a legal point of view, and a simple agreement to assign creator income to the company. The VC firm has made a first investment in the YouTuber Marina Mogilko with a consolidated 16M global audience.
The creator-focused financial services platform helps creators convert the short-term ads revenues into cash advances with Instant Cash solution. The platform gives small cash advances - up to $250 - against the Adsense revenue.
There are also other solutions in the area, specialized on other content formats, like the text articles with Pipe, that could turn the newsletter paid subscriptions into cash advances, or music tracks, that I spoke earlier in the article, with solutions like Stem or Royalty Exchange, turning their music streaming revenues into cash advances.
The indirect competition
The indirect option from creators to obtain money from their catalog is the buyout of back catalog or micro-lending. Some companies have decided to focus on these value propositions.
🟪 Patreon Capital - by Patreon
Patreon, the unicorn specialized in creator membership solutions, has also noted the needs of financing by their creators. So Patreon offers to their creators the possibility to turn their recurring donations into cash advances. The Patreon donations have a recurring frequency, so that they could mitigate the risk of the platform of a no-reimbursement of the cash advances by taking as collateral the Patreon-based revenue from specific content of the creator borrower.
So it is not investment funding, not revenue-based financing, but rather micro-lending. The deal has fixed reimbursement amounts. The creator will use the cash to develop its content offer to their members, to reduce the membership churn and increase the new MRR (new members).
However, Patreon’s solution is not available now 🤷🏾♂️, so the micro-lending was not a sustainable business.
🟪 Stripe Capital & Shopify Capital - by Stripe & Shopify
Stripe Capital and Shopify Capital are micro-lending solutions, like Patreon Capital, focused on merchants. The payment solution and the digital shops enabler are offering micro-loans for the small digital merchants.
These solutions could be used by creators if they have developed digital and physical products lines because they will take a cut of each sales, plus a fixed amount of lending fees. So these solutions are finally a mix of RBF and micro-lending.
Jellysmack is not offering RBF, but rather a creator-focused M&A solution. The French/US company does not licence, but buys the rights of YouTube back catalogs from the creators, with the goal to recoup their investment from the ad revenue.
Once the company identifies channels with expansion potential, they acquire them and then ramp up distribution, internationalisation, licensing and merchandising operations.
The company has set aside a cash pool of $500M to buy back YouTube catalogs. To do so, the company uses its algorithm to spot the best evergreen potential of the videos. After finding the good catalogs, the platform negotiated the M&A deal, containing upfront cash advances and minimum guarantees that could be from $50k to $50M according to the president Sean Atkins, in exchange for 100% of IP rights of the back video catalogs of YouTubers.
🟪 Electrify Video Partners and Animaj
Electrify Video Partners was founded by ex-VC Ian Shepherd and Animaj by ex-Nestor founder Sixte de Vauplane. Like Jellysmack, these companies intend to buy not only the back catalog and the channel altogether (between 50 to 100% of the catalog) and intend to develop it to generate enough ad revenue to make a profit.
While Electrify Video Partners seems generalist in its approach, Animaj makes its focus on child content channels, a massive market. In fact, four of the top 10 YouTube channels in terms of subscriptions are kid channels.
And from the creator’s side?
The best example is MrBeast. The best world YouTuber concluded a deal with Spotter. The creator launched a Spanish-dubbed version of its channel, to get access to the Spanish audience. This operation helped him increase its audience by over 300%.
According to Creative Juice, the creator oompaville gained a +23% increase of monthly views and +65% increase in monthly revenue, and the US fitness creator growithjo, with +4M YouTube subscribers, sees and +54% increase of monthly revenue and +47% increase in monthly views after partnering with Creative Juice.
What can we say about the future of these RBF solutions 🤔?
The first interesting point is the rise of monetization of other content distribution platforms. If the other video platforms could generate ad revenue through viewership, the RBF platforms could buy other content platform catalogs and expand the Total Available Market and the coverage of back catalog per existing creator client, and develop new tailored offers.
Furthermore, the adjustment of content distribution platforms’ policies and viewership rules could highly impact the business. The RBF business, developing over the YouTube video channels, or the music streaming like we have previously seen, is highly dependent on the platform feature policies and algorithm that much ad revenue to a video against another. The modification of the monetization rules could have an impact on revenue generation, and the return on investment for the platform, since it will be the platform that will absorb the risk.
At last, these companies could extend the extension of platform activities for more help to creators. As the creator sometimes generates more and more money outside the content platform than inside, the goal could be to help creators to generate money outside the platform, and push creator retention, and maybe negotiate higher revenue if they manage to negotiate a package deal with creators including a support on offline activities.
That's is for today 🤗!
We hope that this long ride in the revenue-based financing solutions was very helpful to better understand why these structures exists.
We want to discover the Creator Economy with you 🤲 : see you in the next issue of Creator Economy Report‘ discover another sub-vertical of the Creator Economy.
Cheers 🍻
Ange 🙋🏾♂️
📚 Resources
▪️ Spotter raises $200M to invest $1 billion into YouTubers’ back catalogs - TechCrunch - Feb 2022 : https://techcrunch.com/2022/02/16/spotter-invest-youtubers-back-catalog/
▪️ Spotter Says It Has $1 Billion War Chest to Buy YouTube Creators’ Video Catalogs After Major Funding Round - Variety - Feb 2022 : https://variety.com/2022/digital/news/spotter-1-billion-youtube-creators-videos-funding-1235183936/
▪️ Why this company is investing $1 billion in your favorite YouTube creators like Mr Beast - Fast Company - Mar 22 : https://www.fastcompany.com/90731575/why-this-company-is-investing-1-billion-in-your-favorite-youtube-creators-like-mr-beast
▪️ YouTube Revenue and Usage Statistics (2023) - Business of Apps - May 2023 : https://www.businessofapps.com/data/youtube-statistics/
▪️ MrBeast working with $2 million fund to invest in up-and-coming creators - The Verge - March 2021 : https://www.theverge.com/2021/3/24/22348926/mrbeast-creator-investment-fund-creative-juice
▪️ A startup that plans to spend $1 billion on YouTube back catalogs breaks down what it looks for in creators and videos - Business Insider - February 2022 : https://www.businessinsider.com/spotter-millions-invests-youtube-catalogs-breaks-down-valuable-video-2022-2
▪️ Why creator startup Jellysmack is setting aside $500 million to buy up old YouTube videos from influencers - Business Insider - Jan 2022 : https://www.businessinsider.com/creator-startup-jellysmack-spend-500-million-on-old-youtube-videos-2022-1
▪️ Meet the 4 creators who YouTube star MrBeast and startup Creative Juice are investing $1 million in - Business Insider - December 2021: https://www.businessinsider.com/mrbeast-creative-juice-invest-1-million-directly-influencers-youtube-creators-2021-12
▪️ How to Invest in Creators? - Arm the Creators! - 2022 : https://www.armthecreators.com/how-to-invest-in-creators/
▪️ Creative Juice launches a $50M fund to invest in creators - TechCrunch - April 2022 : https://techcrunch.com/2022/04/20/creative-juice-investment-creators-youtube/
▪️ What is Spotter? - Creator Handbook - July 2022 : https://www.creatorhandbook.net/what-is-spotter/
▪️ Juice Funds Q&A | Funding for Creators - YouTube - March 2023 :
▪️ What can I use Juice Funds Refresh for? | Funding for Creators - YouTube - January 2023 :
▪️ Patreon will now give creators cash advances on their subscription money - The Verge - February 2020 : https://www.theverge.com/2020/2/18/21142306/patreon-capital-loans-jack-conte-cash-advances
▪️ Patreon enters the micro-lending game with Patreon Capital - TechCrunch - February 2020 : https://techcrunch.com/2020/02/18/patreon-enters-the-micro-lending-game-with-patreon-capital/
▪️ Creator economy startups to watch, according to VCs - Sifted - October 2022 : https://sifted.eu/articles/creator-economy-startups-vcs
Bonjour Mr Michael, je suis un jeune entrepreneur et je suis intéressé par le programme Africa Next, comment dois je procéder ? Merci