In recent years, the creator economy has exploded, transforming how we consume digital content and redefining career paths for millions.
From influencers and TikTokers to podcasters and bloggers, content creators are at the forefront of a new economic ecosystem. Even music artists and songwriters are expanding their revenue streams to market their music on various social platforms and earn money through brand deals or by creating exclusive content.
However, beneath the surface of viral videos and chart-topping content lies a troubling reality: the financial infrastructure supporting these creators is fundamentally broken.
This issue is particularly acute in the music industry, where complex royalty splits and outdated systems have created a perfect storm of payment delays, unclaimed revenue, and financial uncertainty for musicians. These issues have crossed over into the creator space, particularly for those creators who regularly collaborate with others.
To understand the scope of the problem, we need to delve into the intricacies of how artists, musicians, and content creators are getting (or not getting) paid today. We’ll unpack how current financial services are being used, and offer a solution that uniquely addresses the pain points for creators.
The Complexity of Creator Revenue Streams
- Advertising revenue from platforms like YouTube and Twitch
- Sponsorships and brand deals
- E-commerce and merchandise sales
- Subscriptions through platforms like Patreon and Substack
- Online courses and digital content sales
- Commissions on affiliate links via Linktree or other aggregators
- Livestreaming donations
- NFT sales
Each of these income streams operates on its own workflow and timeline by their own set of rules. For example, advertising revenue might be paid out monthly, while sponsorships could generate immediate income.
This diversity of monetization methods, while potentially lucrative, creates significant challenges in tracking and managing earnings — and, more importantly, challenges in splitting those payments amongst multiple collaborators on any given project.
The Persistent Problem of Cash Flow
One of the most pressing issues facing creators and artists is maintaining consistent cash flow. Several factors contribute to this ongoing problem:
Outdated Payment Systems
Businesses in both the music industry and the influencer marketing industry still rely on legacy systems ill-equipped to handle the speed and complexity of modern digital transactions. These include distributors, labels, managers, agencies, and more.
Multiple Intermediaries
Before reaching the creator, payments often pass through a chain of entities including social media platforms, marketplaces, and management companies. Each link in this chain represents a potential point of delay.
Complex Revenue Splits
Determining the exact amount owed to each contributor for a piece of content can be incredibly complex, especially in collaborations where multiple creators may have a stake in a single project. These splits are often calculated manually, which can also lead to human error.
International Complications
Cross-border payments introduce additional layers of complexity, with varying regulations, differing royalty breakdowns, and currency conversions often slowing down the process.
The result is a system where creators frequently wait weeks or even months to receive payment for their work, creating significant financial strain and uncertainty.
The Hidden Cost of Unclaimed Revenues
Perhaps even more troubling than delayed payments is the issue of unclaimed revenues.
Across various platforms, it’s estimated that significant amounts of potential income go unclaimed each year. This staggering figure is the result of several factors:
- Incomplete or Inaccurate Metrics: When information about revenue or splits is missing or incorrect, revenues can end up in limbo, unable to be properly attributed to the right collaborator.
- Lack of Awareness: Many new creators are simply unaware of all the monetization options available to them or how to claim their earnings.
- Administrative Burden: The process of manually attributing revenue to every collaborator on a project often causes the payer to leave money on the table.
- "Black Box" Revenues: When platforms can't match a split to the correct collaborator, the resulting income often ends up in a "black box," eventually distributed based on market share rather than actual ownership.
This unclaimed money represents a significant loss not just for individual artists and creators, but for the creator economy as a whole, putting the entire ecosystem into a tailspin.
The Ripple Effects on the Ecosystem
The failure to modernize payments and address these issues has far-reaching consequences.
Frustrated by financial instability, many talented creators abandon their full-time content creation or related creative careers or seek more reliable income sources, resulting in a loss of creative potential by talent churn.
But these persistent payment issues do more than just cause creators to abandon their craft: they damage relationships between creators and the businesses they work with, hindering partnerships and innovation. For example, record labels and music distributors will have artists, musicians, and songwriters seek new representation over something late or missed payments.
Moreover, these payment discrepancies can even evolve into legal battles, diverting time and resources from creative endeavors.
The amount of time and focus spent on resolving basic payment issues ultimately diverts attention and resources from developing new creative technologies and opportunities. So what is the path forward?
Modern Solutions for Creator Payments
Addressing these longstanding issues requires financial tools specifically designed for the unique needs of creators. Fintech startups are emerging to help creators manage their finances more effectively, and heavy amounts of venture capital are flowing into solutions that can both quicken and ease the flow of payments between creators and from businesses to the creators they support.
One promising option was Stir, a creator-focused payments platform that discontinued their support for payments, invoices, and splits. Karat is a financial management tool for creators, but doesn’t ensure smooth transfer of funds between creators or from businesses to creators directly from their earned revenue. And while Stripe is a great overall payment solution, it doesn’t have the nuance many creators need when getting paid, like splitting complicated royalties and other revenue streams that have to be divvied up between creators. Stripe also requires those calculations to be made manually outside of their platform then paid out within.
A Payment Solution Uniquely for Creators - mozaic
One promising solution is mozaic, a platform that aims to streamline and modernize creator payments.
mozaic offers features like split payments, global real-time payouts, automated revenue sharing.
By integrating with various online platforms like YouTube, Etsy, Shopify, and more, it can aggregate earnings data, calculate splits automatically, and provide transparency throughout the process.
This approach addresses many of the pain points creators face, from payment delays to the complexity of managing multiple income streams.
Moreover, mozaic prioritizes security by allowing recipients to enter their bank account details directly, eliminating the need for payers to store sensitive financial information. This added layer of security addresses a major concern in the industry.
The creator economy has immense potential to reshape how we think about work, content creation, and entertainment.
However, this potential can only be fully realized when supported by financial infrastructure that meets the unique needs of creators.
By embracing modern solutions like mozaic, the industry can move towards a future where content creators are paid promptly and fairly, allowing them to focus on what they do best.