Creator Economy
By Mahira Dayal Welcome back!
Meta Platforms had plenty of topics to talk about on its first quarter earnings call, but creators weren't one of them. After shining the spotlight on Reels the previous quarter, Meta executives had little to say about the most pressing issues on the minds of creators today, such as its creator fund.
Instead, creators came up in the context of Meta's more futuristic initiatives, such as Horizon Worlds, Meta's online virtual reality social environment (which the company said it will launch as a web version that won't require a VR headset later this year). On the call, Mark Zuckerberg talked about how creators will fit into Horizon, a cornerstone of the company's broader metaverse plans.
"Our other focus for Horizon is building out the metaverse economy and helping creators make a living working in the metaverse," he said. "We expect to be meaningfully better at monetization than others in the space and we think that that should become a sustainable advantage for our platforms as they develop."
This could mean that Meta plans to take a smaller cut of creators' earnings in its metaverse than competing products do. Creators on Roblox, for example, take home under 30% of earnings on the platform after accounting for app store and processing fees and platform hosting costs. (Read a profile on Roblox creator Samuel Jordan for more details).
Zuckerberg did talk about some facets of Reels, even if creators weren't one of them. He said the feature, its competitor to TikTok, now makes up more than 20% of the time people spend on Instagram. But Meta executives still haven't figured out how to make money off these videos. Reels monetization is still lower than for Feed and Stories, he said.
Meta's executives addressed the various pressures that have hurt the company's growth. The switch to short-form video will continue to be a headwind for the company's revenue until advertisers figure out how to make ads that fit the format well, Zuckerberg said.
And Apple's privacy changes posed a continued challenge to the company too. "In the longer term, we're rebuilding our ads stack to employ more machine learning and AI to be more effective at ads with less data," said Dave Wehner, chief financial officer at Meta.
Still, Meta's shares surged in after-hours trading, apparently in response to the company's careful management of expectations for the quarter ending March 31 and its efforts to control costs. It reported 7% growth in revenue to $27.9 billion, which fell within its projections. It had a small increase in daily active users from 1.96 billion, up from 1.929 billion the quarter ending December, a welcome change after its daily active user count fell for the first time. (Read more on its Q1 earnings)
Here's what else is going on…
Spotify was in the headlines a lot in the first quarter, not for the rosiest of reasons. Users were outraged that Joe Rogan, Spotify's most popular podcaster, was allowed to stay on the platform amid accusations that he was spreading misinformation about the coronavirus. Some, like researcher Brené Brown, stopped creating podcasts for Spotify temporarily. Prominent artists like Neil Young and Joni Mitchell said they would remove their music. Those protests didn't dent quarterly results, however. In fact, its podcasting feature even gained in popularity.
The streaming company said revenue increased 24% for the March quarter to approximately $2.8 billion, boosted by a 15% gain in subscribers to its paid tiers, or slightly less than the fourth quarter's 16% growth. Some of the slowdown could be chalked up to Russia's war in Ukraine: It lost 1.5 million customers in Russia when it suspended services there in March. Notably, it didn't report a loss in subscribers from the Joe Rogan controversy. Growth in its free users increased to 21% from 19%.
Podcasting, which makes up a far smaller part of its business, showed some life: There were 4 million podcasts on Spotify at the end of the first quarter of the year, up 11% from the quarter ending December 2021. Growth in monthly active podcast users outpaced overall monthly active user growth. And podcasts' share of total consumption hours on Spotify reached a high, indicating that podcasting is becoming more important as an offering on the platform.
In Spotify's earnings call Wednesday morning, chief financial officer Paul Vogel said there's a plan for the service to become profitable.
"It's not super far off. It will still be negative this year," he said. " The overall long term margins on podcasting we still think will be really favorable to overall Spotify."
For Spotify, the bad headlines on its podcast efforts have masked an improving financial picture.
After sequential declines in user numbers the last three quarters, Pinterest had some modestly positive news on the topic in its earnings report: It saw a slight jump in its monthly active users number for the first quarter compared to prior quarter, driven by an increase in international users. However, the digital scrapbooking company earns a majority of its revenue from North America, where numbers continued to drop for a fourth consecutive quarter.
In its earnings call with analysts, CEO Ben Silbermann said the company pushed some creator marketing spend from early this year to the back half of the year to figure out "how do we create incentives that give them the motivation to create content that's really useful and often content that's a lot more evergreen than the ephemeral content you see on a lot of other platforms."
(Read more on Pinterest's earnings here)
Toni Reid, who was vice president of Alexa Experiences and Echo devices at Amazon, where she worked for 24 years, joined YouTube as its vice president of product management on Monday. She will oversee YouTube Shorts and YouTube Gaming, livestreaming and community products, Variety first reported. Reid will report to YouTube's chief product officer Neal Mohan.
T.L. Taylor, an MIT professor, has joined the board of advisors at Juked, a social network for esports fans. She will focus on addressing issues related to community, diversity, equity and inclusion on Juked.
LinkedIn is expanding its creator management team. It posted a job posting for a healthcare creator manager, who will be responsible for developing and executing a strategy to identify and support healthcare creators. LinkedIn is also hiring a creator manager who will coordinate creator support programs like weekly emails and webinars.
See The Information's Creator Economy Database for an exclusive list of private companies and their investors.
Twitch, which is owned by Amazon, is weighing changes to how it pays its top talent, Bloomberg reported, citing people familiar with the planning. This could boost the game streaming platform's profits but would reduce the cut of subscription fees creators earn.
TikTok is developing new tools to let users limit topics that appear in its For You feed. This could allow users to indicate which words or hashtags they don't want to see in their feed.
Mavrck, an influencer marketing platform, announced its acquisition of social media marketing platform Later in a deal funded by a $135 million strategic investment in Mavrck by Summit Partners. Later will continue to operate as a standalone product and business unit.
BintanGO raised $2.1 million in seed funding led by Investible, eWTP Technology and Innovation Fund. The Indonesian startup helps link creators and brands and also has an app for fans to buy video shout-outs from creators, similar to the service provided by Cameo.
Instagram is testing a feature to allow users to pin posts to their profile above their photo grid, TechCrunch reported.
BuzzFeed is launching a new network for creators called Catalyst. It will support creators in areas like affiliate marketing, branded videos, programming and editorial.
Wednesday, May 25—*MORE SPEAKERS ADDED* We're hosting our second virtual Creator Economy Summit, convening creators, platforms and investors to talk about what's next in one of tech's hottest industries. Speakers to include Instagram's VP of Product, Ashley Yuki, influencer Josh Richards and leaders from YouTube, Pinterest, Roblox, SoftBank Vision Fund & more.
Reserve your spot here.
• Young influencers are being offered cheap cosmetic procedures in return for promotion (NBC)
• A Murder Solved in DMs (The Cut)
• Conservative Twitter accounts got boost in followers after Musk acquisition, data shows (The Verge)
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Mahira Dayal is a reporter at The Information based in New York City. Contact her about startups and creators at mahira@theinformation.com or follow her on Twitter at @mahiradayal.
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