Can the creator economy survive the flood of AI?

Online creators and their business models became our focus this week after super-popular YouTuber Mr.Beast announced he would be acquiring fintech startup Step. Then, Hollywood studios sent a flurry of cease-and-desist letters over the launch of ByteDance’s new video generation model SeaDance 2.0.

These seemingly unconnected headlines suggest a media landscape in the midst of transformative change, as popular YouTubers seek to diversify their business models and the threat and promise of increasingly powerful generative AI tools looms large.

On the latest episode of TechCrunch’s Equity podcast, Kirsten Kolosek, Rebecca Beran, and I discussed what’s next for the creator economy and whether there’s room for the next generation of creators to stand out.

“What’s the next saturation point?” Kirsten wondered. “Not all of these people can go out there and spin off a product. So will the population of successful creators just diminish? Or will something else happen in a different medium that technically allows them to find an audience to make money?”

You can read a preview of the conversation below, edited for length and clarity.

Anthony: [The news] Our colleague Lauren led us to write this great article about creator business models in general, and how creators no longer rely solely on ad revenue. While I think this is still a pretty big part of their business, she analyzed a number of the most popular YouTubers and pointed out that each is typically expanding into other revenue streams, not just e-commerce.

For example, Mr. Beast actually has this line of food products that includes chocolate, and they’re making hundreds of millions of dollars, and they were actually profitable in 2024, but their media business was in the red. All of that was pretty wild to me.

Kirsten: If Mr. Beast can’t make money with his media company, who can? To me, that was an eye-opening statistic.

The entire ad revenue business has just reached a saturation point, so it’s no surprise that things aren’t always going well for creators and influencers. I guess my big question is, where will the next saturation point be? Not all of these people can go out and spin off a product. So will the number of successful creators simply decline, or will there be some other medium that technically allows them to find an audience to make money?

Rebecca: That’s interesting, there’s a lot of other ways to think about what might happen, right? Maybe they’ll create their own digital twin and put that digital twin in different situations. [other kinds of] money.

But again, back to the unsurprising thing, these people are celebrities now, right? Someone recently said to me on the phone: [the] Younger generations don’t know our celebrities, but they know TikTok celebrities. And we’ve been watching celebrities fake products and make money off of it for years, right? I was looking at Rachel [Ray]she was a famous chef and sold EVOO or olive oil.

we delay ventures [Equity] Sometime last year. They have a creator fund and basically what they’re doing is they’re raising VC funds to basically support creators’ businesses. Maybe there’s a niche fan out there, maybe they’re really into woodworking and this is their chisel collection, I don’t know.

I think this is an interesting step forward, and something we think about as journalists. It’s about how we too can become creators and strive to build our own brands that allow us to diversify our revenue. It’s scary to say that out loud.

Anthony: I’m smiling, but it’s the smile of someone whose soul is slowly turning to ashes.

So I’ve been taking a break from talking about AI, but I’m obligingly bringing it back into the conversation. Obviously, one relevant move over the past week or so is that ByteDance, the Chinese company that started TikTok and is still an investor in it (I won’t go into all of that), has announced a new version of its model, Seedance 2.0. This was primarily only available to Chinese users, at least initially.

But people started posting videos produced by Seadance, such as this viral video of Brad Pitt fighting Tom Cruise. That sparked a general conversation about, “Is Hollywood going to die?” And, more specifically, a number of Hollywood studios, including Netflix, have written to ByteDance saying, “We can’t do that. We’re basically allowing any user to use all of our IP, all of our movie stars, to generate videos.” And for a few days, there was no response at all from ByteDance, and then they said, “We’re sorry, we’re sorry, we launched this without any real guardrails for some reason, but we’re going to improve it in the future.”

Kirsten: I’m currently editing a story that Rebecca wrote, so the timing is perfect. It has nothing to do with SeaDance, but it has something to do with AI and filmmaking. So I’m going to give a future prize to Rebecca for being timely about that. Rebecca, I know you have a lot more to say than just that Hollywood is upset. Is it more complicated than that?

Rebecca: Yeah, definitely. So, if you tie this back to the creator thing, I think a lot of people are going to be using these tools to create all kinds of content. And we will be completely flooded. And it’s going to be intense.

But I think there’s a tension between one and two when you talk about using AI video tools to create movies or ads or create content in general. This means the effort is much lower, and it also has the potential to democratize access for many people who don’t have the money, budget, or team to share the many stories they want to tell.

Also, if you’re a small business and you want to create a small shampoo ad, I mean, there’s a shampoo ad that’s going viral, so you want to focus on that. Or if you sell coffee and want to create a small ad for that, [this] Maybe we can provide you with the tools to do that. is that bad? Isn’t that a bad thing? Does the world need more content? There are several paths you can walk on.

Kirsten: Is that a bad thing, Anthony?

Anthony: From a creator’s perspective, my overall thoughts are: [that] The response to a lot of this kind of sloppiness, frankly a lot of it is sloppy, and I think it will continue to be, is going to be about authenticity. Therefore, it is possible that these big creators will have less of an idea that they have a digital twin. [instead,] “No, I’m the real Mr. Beast, not some digital simulacrum wandering around.”

And I think that also speaks to the fact that every social network has its ups and downs. However, from what I understand, OpenAI’s Sora, although initially experiencing rapid growth, has recently struggled to retain users. Because there’s a certain emptiness to the experience when you don’t feel like there’s a real human being on the other side.

But I think monetizing it will also make things more difficult for established creators. […] And I think it’s going to be especially difficult for new creators because there’s going to be so much more stuff. If you actually try to break out, it will be very difficult.