The creator economy has birthed a new breed of scam artists
Young creators keep getting lured to predatory "collab houses." Here's why.
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The creator economy has birthed a new breed of scam artists
The Verge published a 6,000-word exposé about the “podcasting hype house from hell,” which was run out of Los Angeles by a Chinese audio company called Ximalaya. While the accusations lodged by those who lived in the house are shocking, they mirror the complaints of other creators who were quoted in at least a half dozen other investigative articles published within the last year.
The playbook usually goes like this:
A young creator begins to gain some traction on a platform like TikTok but struggles to monetize their following.
A man in a slick suit shows up and pitches the creator on a glamorous life living rent free in an LA mansion where they’ll be able to collaborate with other beautiful people, scale their audiences, and be brought into lucrative brand advertising deals.
The creator moves to the mansion and quickly becomes disillusioned with their circumstances. Brand deals rarely materialize, and when they do the creator doesn’t see any of the money. The house falls into a state of disrepair, partially due to excessive partying. The man in the slick suit ends up being abusive and duplicitous, blaming any problems on the creators and failing to acknowledge that he’s not delivering on his promises. Often it turns out that he stopped paying the mansion’s rent and is being threatened with eviction. Because the creator is often young and poor, they find themselves stranded in a city where they have no family connections. Even worse, some realize they signed onerous contracts in which they turned over the rights to their channel to the man in the slick suit.
There are a few reasons these nightmare scenarios keep playing out.
The creators themselves are often young and have very little in the way of career experience. They’re operating in an industry that’s only a few years old and without established norms. They dream of “making it” and are perhaps a little too trigger happy when someone comes along with the promise of taking them to the next level.
As for the villains of the story, the people who run the collab houses? Most go in with good intentions. They see that the creator economy has grow into a multi-billion dollar market and view themselves as venture capitalists. If they can just find the next Charli D'Amelio or Mr. Beast before they blow up, then they can essentially ride the star’s coattails, taking a 15% cut of whatever revenue they generate. If just a few of the creators under their management end up collectively generating $50 million a year, then that’s $7.5 million in their pocket. Sounds like easy money.
Except these would-be super agents often have very little experience managing influencers, nor do they have the brand relationships needed to line up major sponsorship deals. Often, they’re only a few years older than the creators themselves. After a few months, those rent payments and huge party expenses start to add up, and suddenly this isn’t looking like easy money anymore. Add in a dash of substance abuse and narcissistic personality disorder, and you have all the ingredients for a shitstorm, the kind where the creators under your management tell a journalist about your cocaine habits and proclivity for sexual harassment.
A few years ago, I wrote a piece for New York magazine asking whether it’s time to regulate social media influencers. While that article focused on unethical advertising behavior, I think both it and the collab house scams stem from the fact that the creator economy has not yet undergone a crucial reckoning.
If you work in Hollywood, you’re protected by things like child actor laws and SAG contracts. There are strict regulations in place for how musicians are paid by radio stations and streaming platforms. Journalists and authors have their own guilds and unions. Everything from payola to jointly owning a local newspaper and TV station is outlawed.
No such regulations exist for the creator economy, and norms are only starting to get established. If it feels like we’re in a Wild West, that’s because we are.
Netflix launches its own merch store
Insider reports:
The site will feature exclusive limited editions of clothing and lifestyle products. This month's offerings include T-shirts, hoodies, necklaces and even a Kendama toy, all inspired by two of Netflix's anime series, "Yasuke" and "Eden." Products related to the French thriller "Lupin" were made in collaboration with the Louvre Museum. Among the "Lupin" items debuting this month are $60 throw pillows and a $150 side table, according to the Times.
Netflix is finally taking a page out of Disney's playbook
Substack is trying to attract comic book artists and fiction writers
Insider reports:
The newsletter company has hired Nick Spencer, writer of franchises like "Captain America" and "The Amazing Spider-Man," to offer "Substack Pro" advance-payment deals to comic-book writers, Substack cofounder Hamish McKenzie told Insider.
Substack has also started to offer such deals to fiction authors, although those efforts are nascent, he said.
Speaking of monetizing fiction
Elle Griffin interviewed John McCrae, a guy who started posting a serialized, fictional story to a Wordpress blog, and after 2.5 years it was attracting over a million views a month, all with very little promotion or marketing. Kind of incredible.
A newsletter subscribe button is coming to Twitter profiles
Mashable reports:
Twitter is set to continue its ongoing reinvention of the most sacred of social-media spaces — the user profile — in the next few weeks with the addition of a newsletter subscription button. The goal, as the company explained to Mashable, is to help newsletter writers better leverage their existing Twitter followers in an effort to grow their subscriber bases.
The "subscribe" button, which will live prominently on the profile pages of those who choose to turn on the feature, will be available to anyone with a Revue account (sorry, Substackers). The move shows the continued emphasis Twitter is placing on newsletters following its January acquisition of the subscription newsletter service.
Ooh, this is where Twitter's acquisition of Revue gets interesting, especially as it relates to its competition to Substack. Let’s walk through the different ways Revue has the advantage:
Price: After the Twitter acquisition, Revue eliminated its upfront costs and now just takes 5% of a writer’s subscription revenue. That’s half Substack’s 10% cut, and that can add up to a lot in cost savings once a newsletter gets to thousands of subscribers.
Discoverability: Speak to any Substack writer, and they’ll tell you that a large portion of their subscribers come in via Twitter. In fact Substack’s founders developed a specific formula that predicts a writer’s success on Substack based entirely on their Twitter engagement. Buy building discoverability tools directly into its product, Twitter is removing friction. With this new subscribe button, I wonder if it’ll just automatically add the email associated with your Twitter account, or if you’ll have to manually enter the address?
Subscriber perks: We know that Twitter is working on a feature called “Super Follows” that will allow users to place tweets behind a paywall. We also know that Super Follows will be integrated with Revue subscriptions, and I could envision a lot of scenarios where newsletter writers can leverage paywalled tweets to their advantage. The hypothetical I like to give is the TV critic who writes a Revue newsletter, and every Sunday she live tweets her favorite HBO show, but only for paying subscribers. A sports writer could live tweet games and a finance writer could live tweet quarterly earnings calls.
How will Substack continue to compete against all these features? That’s the $650 million question.
Is Apple trying to destroy the newsletter economy?
Casey Newton wrote a a good take on what Apple's elimination of email tracking pixels will mean for the newsletter industry. I think the most deleterious effect is that it'll make it hard for newsletter publishers to clean their lists of inactive subscribers.
I’ve seen two responses to the news. The first comes from people who say that open rates were always overrated and that this will force newsletter creators to focus on more important metrics. But there also are those who think Apple has taken privacy protection too far and is, in effect, damaging a legitimate industry.
I’m sympathetic to the second viewpoint. Why?
I think one of the reasons publishers have been so excited about email newsletters is because email is one of the only decentralized distribution systems on the internet, and it allows publishers to have a direct relationship with their audiences. Unlike, say, Facebook, email isn’t controlled by an algorithm and therefore it allows publishers to have unfettered access to their readers.
What Apple is doing is using its monopoly power to insert itself between the publisher and its subscribers in such a way that the publisher can no longer control its relationship with a subscriber. Nieman Lab’s Josh Benton already made this point on Twitter, but what if tomorrow Apple decided that it wanted to “protect” user privacy by blocking use of Google Analytics so publishers could no longer tell when people are visiting their websites? At what point is it no longer about protecting privacy but instead is simply debilitating a company from conducting its normal business?