By Steven Zhou
The creator economy is thriving. It’s currently valued at approximately US$250 billion and is projected to skyrocket to US$480 billion by 2027.
Content is king
The creator economy is also known as the influencer economy. It's the space where people make, market and monetize their content on digital platforms. This includes everything from the home chef that brings you 15-minute recipes on TikTok to a rising star like Bella Poarch on Bigo Live, who gained fame through her lip-syncing videos.
Over the past decade, it has redefined what is, and how we consume, entertainment. Today, most people have a mobile phone and anyone with one can create and share content. This has democratized and diversified content, creating a much richer array of entertainment. Crucially, it has also provided creators with multiple sources of income from advertising to sponsorships.
Whilst it has been around for a long time, the creator economy boom can be traced back to the pandemic, when there was a massive shift to digital platforms for both work and play. Screen-time soared and new, original content was pervasive. And where there’s an audience, there’s a monetization opportunity. Creators want to turn their content in cash - and that’s where Coda comes in.
Monetizing across diverse markets isn’t a cakewalk. Publishers need to identify and partner with trusted local payment channels and navigate the intricate web of regulatory requirements in different markets. Coda partners with digital platforms to simplify the process. We integrate our payment solutions such as Codapay and act as merchant-on-record so our digital platform partners like live-streaming leader Bigo Live can focus on delivering the best experiences for creators and their fans.
Bigo Live, a free global live-streaming platform, initially bridged the gap between online and offline experiences but soon became an important income stream for content creators. Through its leveling system, creators unlock a range of monetization features, including the ability to cash out virtual gifts and exchange "diamonds" at an optimized conversion rate.
The Southeast Asia opportunity
The creator economy in Southeast Asia is a significant market, with an expected total value of S$19 billion. The digital economy in this region has seen rapid growth, expanding by almost 50% in value between 2020 and 2021. In 2023, over 500 million people across Southeast Asia spent between 2 to 4 hours a day on social media and live streaming sites, far exceeding the global average of 2 hours and 23 minutes. One thing is clear - the monetization opportunity for publishers is immense.
Challenges associated with the creator economy
Navigating the creator economy comes with its own set of challenges. The main obstacles that content publishers face when entering emerging markets include uncertainty and fluctuations in foreign exchange rates as well as restrictions on repatriation of funds
While publishers may prefer to deal exclusively in USD, operating in emerging markets means dealing with local currencies as well as alternative payment methods, which are subject to fluctuations due to political instability, economic downturns, and other unpredictable external factors. Fortunately, such challenges can be mitigated through incorporating an enhanced local currency pay-out option instead of sending USD directly. With Coda, publishers can use their locally earned revenue (pay-ins) to pay their local content creators and partners (payouts). This helps reduce foreign exchange costs and lowers risk, giving publishers more flexibility in various emerging markets. This way, publishers save on costs while beneficiaries receive fair payment without dealing with currency conversion.
Another challenge that publishers may face is that emerging markets sometimes impose restrictions (e.g., limits on the amount of currency that can be transferred out of the country) or put in place tax implications on the repatriation of profits earned within their borders, due to a limited supply of currency in circulation. Therefore, a thorough understanding of the financial dynamics of emerging markets and the regulatory environment governing cross-border transactions, as well as sufficient planning and risk management, is needed to navigate the creator economy in emerging markets. Partnering with payment solutions companies like Coda, which have a specialized creator economy team to help solve the common problems content publishers face in challenging emerging markets like Egypt, Pakistan, and Nigeria, can be particularly helpful.
Looking ahead
As we look ahead to the future, the global smartphone market is set to experience a remarkable 4% growth by 2024. This surge is powered by emerging market economies and a rise in consumer spending, opening up a world of possibilities for publishers to expand their revenue horizons in these lucrative markets. That's where Coda comes in. We're here to ensure publishers are equipped with the right strategy and solutions to tap into the boundless potential of the creator economy in emerging markets and beyond.
Get in touch with us to explore what the creator economy can do for your business.
