Chapter 2: The Distinctiveness of Digital
Each medium brings with it distinctive features and new possibilities. This doesn’t mean a new medium simply replaces an old one, just as TV turned out to be more than radio with pictures, and the internet much more than text or images on a screen that anyone could post. More important factors for consideration are the way the medium affects us, the way we interact with it and with others, and the new form factors, genres, and niches that are enabled. In the words of media theorist Neil Postman, “Technological change is not additive; it is ecological.” 1
We can see this kind of all-encompassing media experience in the realm of digital content quite clearly. With no significant barriers to entry in this landscape, digital creators can come from anywhere. Some may be posting Instagram Reels just for fun or to entertain friends, but others have much grander aspirations and are looking to build a sizeable audience on TikTok or YouTube in the hope of being able to quit their day job. And despite the generous amount of chaos that comes with a media environment made up of billions of empowered users, it seems the viewing public couldn’t be happier. YouTube is a case in point: it now represents the largest segment within streaming viewing, ahead of Netflix, claiming close to a quarter of all streaming viewing, as shown in the Nielsen Gauge report in July 2023 (see Chapter 1).
The type of media production found on YouTube and competing user-generated content (UGC) platforms such as TikTok, Instagram, and Twitch is a huge departure from the traditional broadcast world (including streaming), with its pitching processes, high production and distribution costs, similarly high barriers to entry, and its up-front financing. Looking at the surge of digital viewing time and the growth of the digital creator economy over the past few years, the question is: What’s going on? This chapter takes that question on, offering a closer look at how digital creators produce, distribute, and promote their content, while diving into the specific rules of this ecosystem, from algorithms to business models to the attention economy.
Let’s start with some frameworks for thinking about our current media environment, and how different it is from the traditional broadcast world. Today, media production and consumption are characterized by multiple screens and devices, always-on connectivity, and broadcast content available on the same device that pushes you your favourite YouTuber’s video or your friend’s Instagram pictures. If somebody wants to make media and get it out to the world nowadays, all they have to do is pick up their phone, hit record, and then post it to UGC platforms that reach hundreds of millions to billions of global viewers. And all of that can be done without paying for production, storage, or distribution.
If all of this sounds too good to be true, that’s because it kind of is. When industries are radically transformed by technological innovations, as the media industry certainly has been over the past 10 to 15 years, major operational shifts take place. Things that were once relatively straightforward, such as reaching audiences through a coveted slot on a broadcast network, become challenging. Why? Because competition now comes from everywhere, and distribution, while provided free of charge on major UGC platforms, does not guarantee even a single viewer. On top of that, budgets, which once correlated to the ability to attract audiences, don’t really matter as much. TV competes not just with other TV shows, but with Netflix, YouTube, TikTok, Instagram, Twitch, podcasts, and apps in general. There’s also the time spent reading news and entertainment information online, not to mention playing games, which can take place on phones, game consoles, tablets, or connected TVs.
The broadcast industry has undeniably been shaken up by the mainstreaming of digital content and always-on portable digital devices. Whether it’s in pre-production, production, distribution, marketing, promotion, or audience behaviours, digital content creation greatly differs from traditional media, as highlighted below:
- A more bottom-up, emergent system
- Very few barriers to entry
- One person DIY production model, or small informal “crew”
- Financial risk assumed by creators
- Funded through such mechanisms as shared ad revenue, Patreon, Kickstarter, digital tip jars, self- funding, merchandise sales, and brand deals
- Unlimited competition
- Global fan communities that are easy to connect with
- Distribution and promotion through fan labour (tweets, playlists, shares, memes, etc.)
- Real-time data and analytics
AN ECONOMY OF ATTENTION
Each of us now has millions of content choices every day. The audience’s attention has become the big prize and this also has increased competition. But we still have the same amount of time in each day. The digital economy in particular is therefore often referred to as an “attention economy,” in which those who attract and retain the most attention win. The term attention economy first appeared in 1971 and was coined by Herbert Simon, an economist and psychologist who went on to win a Nobel Prize for his work on decision-making processes. Simon contended that “a wealth of information creates a poverty of attention.” 2 About 25 years later, when the digital economy began to take hold, theoretical physicist Michael Goldhaber expanded on Simon’s theory, arguing that money flows to attention. 3
It may not be a coincidence that the phrase we use is “paying attention” as our attention does in fact function as a currency. This is especially true in the world of online content and services, where traditional economics have been replaced by something called “freeconomics.” 4 Much of what we’re able to do online doesn’t cause us to reach for our wallets for a number of reasons. There’s the optimization of our data for personalized advertising, the cross-subsidies across a family of products (which is why you don’t pay for Google Maps or Gmail), and there are the freemium models, in which basic tiers of a service are offered for free and more fully featured options are available on a subscription basis. In all cases we are, in one way or another, paying with our attention, either at an individual level or an aggregate one.
Because our attention is finite, the competition for it is so keen, and the cost of creating digital content is generally low, a lucrative business model for many technology companies has been “building a better mousetrap” for our attention. This is achieved by offering consumers everything from free content (news, information, entertainment, games) to free services and tools (web browsers, maps, email, productivity apps) with sophisticated data and analytics systems running in the background that personalize the experience for the individual user and optimize it for advertisers. If you can do this at scale — meaning hundreds of millions to billions of global users, as is the case with the largest tech companies — it can be a very lucrative business. But it’s also worth noting that many of the tech platforms that are household names struggle with profitability, buoyed instead by venture capital and a hope that they will one day become a lucrative business. So, while Alphabet and Meta are extremely profitable companies, Amazon, one of the world’s largest companies, famously wasn’t profitable for close to 20 years. Uber 5 and Netflix 6 only reported profitable quarters in mid-2023.
AVERAGE TIME SPENT PER DAY WITH MEDIA BY ADULTS IN CANADA, 2016-2025
* includes magazines and newspapers
** excludes digital
Let’s look at where Canadians’ attention to media is currently going and where it’s forecast to go. As illustrated in the chart above, mobile devices are consuming the largest part of our attention at almost four hours per day, with TV coming in at just over 2.5 hours daily, and desktop and laptop time at just under two hours. Radio has been reduced to just over an hour daily and print to just 15 minutes. 7
Daily consumption of social media is particularly high, reported at just over 150 minutes for 2023 among a worldwide user base, which represents an increase of over 50 per cent in the past 10 years. 8 Among UGC platforms, TikTok is at the top of the list for daily consumption at 54 minutes, followed by YouTube at 49 minutes, X (formerly Twitter) at 34 minutes, Instagram at 33 minutes, Snapchat and Facebook at 30 minutes each, and Reddit at 24 minutes. 9
These media consumption trends explain the opportunity at hand for digital creators. Commenting on the focus on TikTokers, Instagrammers, and YouTubers at this year’s Cannes Lions International Festival of Creativity, the most prestigious gathering of the global advertising industry, an executive at a creator management company noted that “creators were starting to be less of an exotic aberration and more of a recognized strategy among marketers,” and that “you can’t really reach Gen Z without going through creators.” 10
But are today’s ad campaigns as straightforward as just hiring creators and influencers to do the talking? Professor Robert Kozinets of University of Southern California’s Annenberg School for Communication and Journalism and co-author of Influencers and Creators: Business, Culture and Practice 11 has been studying influencers and creators for several years, and says that now more than ever trust needs to be earned online. Interviewed for Perspectives, Kozinets said:
“When social media as an institution was still young, and people were a bit more naive, there was a sense that these ostensibly ‘real people,’ i.e., bloggers and other nascent influencers, were more trustworthy than familiar commercial spokespeople or paid advertising voices. Although people still seek the authenticity of online voices today in the world of TikTok, Instagram, and YouTube influencers, there’s a layer of mistrust and skepticism sitting on top of that. We can see it in the Edelman trust surveys, and when we talk to people — their trust in influencers has already eroded a lot, in an absolute sense. It’s just that, comparatively and relatively speaking, many people like the influencers they follow online more, and think they should consider their recommendations more, than they like and trust traditional paid spokespeople.” 12
THE MANY FACES OF DIGITAL CREATOR BUSINESS MODELS
There are many misconceptions about digital creators, notably that it’s not all that difficult to make a living as one. Because competition is exponentially greater in digital than in the traditional broadcast industry (as noted in the previous chapter), sustaining a career can be an ongoing challenge for digital creators. Online business models are always evolving, algorithms are always changing, and consumer tastes are always shifting, which means that what works at one point in time on one UGC platform may not work at another point in time, and that same strategy may not work on another platform.
Just how competitive is the digital creator market? A recent Citi GPS report published in March 2023 did the math and concluded that “far more than 80 per cent of the revenues are created by far fewer than 20 per cent of the creators. In short, the Pareto principle, or 80/20 rule, does not apply. The creator economy is ‘winner takes most.’” 13 A closer look at various UGC platforms’ statistics indicates the extent to which this statement is true. For example, there are over 100 million YouTube channels in 2023, and if you cross the threshold of 1,000 subscribers, the minimum level at which you’re eligible to monetize your channel, you’re already in the top nine per cent of all channels. If you have at least 100 subscribers, that puts you in the top 25 per cent of all channels. In other words, any sort of meaningful monetization on YouTube occurs only when channels reach hundreds of thousands to millions of subscribers. If you reach those levels, you’re in the top one per cent of all channels. 14 Recent data from livestreaming platform Twitch shows the top 0.5 per cent of streamers account for 76 per cent of hours watched. 15 Meanwhile, on Patreon, the platform where fans can support artists with direct payments and subscriptions, only two per cent of the hundreds of thousands using the platform earned the equivalent of a monthly minimum wage. 16
Among UGC platforms, TikTok is at the top of the list for daily consumption at 54 minutes, followed by YouTube at 49 minutes, X (formerly Twitter) at 34 minutes, Instagram at 33 minutes, Snapchat and Facebook at 30 minutes each, and Reddit at 24 minutes.
Another common misconception about digital creators is that they earn a significant amount of income from shared ad revenue on the UGC platforms on which they post their images and videos. While this may have been true years ago when YouTube pioneered ad revenue sharing with digital creators, the proportion of creator revenue coming from ad revenue has been decreasing over time and now accounts for about five to seven per cent of earnings, with brand deals forming the biggest slice of the digital creator’s revenue pie at 70 to 80 per cent of income. Other on-platform and off-platform channels ranging from digital tip jars to affiliate marketing round out the pie. 17 18
There are, however, a few issues to flag for digital creators working with brands. A spring 2023 report on the creator economy indicated that well over one-third of creators, most of them at the early to mid-stage point of their careers, set their rates for work with brands by “guessing.” An agency executive noted “there are a lot of brands doing predatory pricing and taking advantage of new creators … [and] there are a huge amount of creators just making content for free products.” 19 This is an example of where industry associations advocating for the rights and interests of digital creators become key. Canada has had its own such organization, Digital First Canada, 20 since 2021, and in summer 2023 the Creators Guild of America 21 launched in the United States.
Many digital creators have therefore evolved into mini media companies, building on their strong relationship with their audience and their unique personal brand. Some digital creators may have just one person they call on to assist them part time, whereas those with larger followings and diversified revenue bases may employ a team of five to 10 or more. At the other end of the spectrum is one of the largest Canadian YouTube channels with over 15 million subscribers and more than seven billion views, which has grown into a full- service production agency that employs 90 people and has offerings that include social media and influencer marketing to work with large brands such as Shopify, IBM, and Cisco. 22 But most digital creators don’t operate at anywhere near that kind of scale — and probably don’t aspire to either.
PRODUCTION AND DISTRIBUTION IN THE DIGITAL CREATOR WORLD
While average production costs in the screen-based media production industry in Canada are gathered and reported by industry associations and range from a few hundred thousand dollars per hour to close to $1.5 million per hour, 23 there is no such comparable figure available for digital creator production. This is because digital creator production can take the form of a single person with a phone and a selfie stick or a small informal ad hoc crew and go all the way up to dozens of staff and expanded lines of business built on top of the success of the digital content. Additionally, viewers of digital creator content, who vote with their clicks, have demonstrated time and time again that it’s not the production value that keeps them coming back. Instead, it’s the uniqueness of the content and how it satisfies specific needs.
Take Toronto mom Oorbee Roy for example. She’s known online as Auntie Skates, a character she created during the pandemic when she took up skateboarding at age 43 in traditional South Asian outfits. After finding only limited success on YouTube, the videos took off on TikTok. 24 Roy continues to post to TikTok, where she has just under 200,000 followers and close to eight million likes. She has also created a spin-off business as a motivational speaker and leader of skateboard clinics and retreats for women.
What has production looked like for Oorbee Roy? “My kids and I went to Ashbridges, a park with a seven-foot bowl close to my East Toronto neighbourhood. I put on a purple sari, and they filmed me as I cleared the bowl. My gold and purple sari blew in the wind behind me like a long cape and I felt like I was flying. The video went viral and put me on the map. It’s reached almost one million views,” says Roy. 25 As illustrated by this example, the question of budget in digital creator content is akin to the question, “How long is a piece of string?” The answer is, of course, “It depends.” Some digital creator content involves research, writing, and scripting as well as animation, graphics, and voice-over. Some may include crew, either for production or editing, and post-production. If posted to more than one place the content may require formatting to fit the requirements of the platform and may also benefit from a different edit or series of edits.
Digital creator content has challenges that are different from those seen in the traditional broadcast industry. With low to no barrier to entry — anyone can shoot video and post it on TikTok for no cost and without anyone’s permission — digital creator content has to contend with the realities of a completely saturated content marketplace.
Once creators settle on what type of content they want to make and figure out their on-camera style and identity, issues of production can be worked out as they go, on a trial-and-error basis.
With the video shot and edited, the next step is getting the work out there. But unlike the straight line of distribution most common in the traditional broadcast industry, a complex interplay of platforms, people, and game-like participation prevails in the digital world. Content flows and is amplified and augmented by users using their phones, tablets, laptops, and desktops. Though every digital creator is different, in general one or more of the best-known platforms for short video, long video, and live streams is used for the initial content push.
Clips of those videos, usually with attention-grabbing captions, may then be cross-posted to other platforms for additional distribution.
After the creator uploads to these platforms, things are in the hands of an active audience that shares, comments, remixes, or even “freeboots” — a term used when one person re-uploads the video of another without consent. Technically, freebooting is a violation of copyright law so takedown notices can be issued. Some digital creators take that route while others opt to let it go and let the internet do what it does best, which is work as a high- speed proliferation machine. The hope is that the benefits reaped for their brand by exposure to new audiences outweigh whatever amount of ad revenue may be lost. All the activities of the active audience, from the positive to the negative all the way to the illegal, can be thought of as a kind of production that follows the distribution phase in the world of digital creator content. In the traditional broadcast ecosystem, once content is distributed through official channels that is generally the end of the sequence. In digital, this “reproduction” phase adds another dimension. The broadcast industry has its Nielsen ratings, while the digital ecosystem has view counts but also signals of engagement and participation from an active audience, and this is how and why digital creator content has the ability to impact the culture.
A FEW WORDS ABOUT DISCOVERABILITY
Digital creator content has challenges that are different from those seen in the traditional broadcast industry. With low to no barrier to entry — anyone can shoot video and post it on TikTok for no cost and without anyone’s permission — digital creator content has to contend with the realities of a completely saturated content marketplace. There are millions of pieces of content to choose from daily, so how does any one end up on your phone or screen? In industry parlance this is called “discoverability,” or the ability for content to get found.
Once again there is no single answer, as digital models operate on systems and logics that are always evolving. Algorithms in particular are constantly changing, and different platforms’ algorithms work differently. The ultimate objective of the algorithm is to satisfy and anticipate the needs of each viewer and, in so doing, maximize time spent on the platform. The top two short video platforms come at the task in distinct ways. On YouTube, for example, there is no single home page. Instead, what you see when you open the app or the site is tailored to each person based on searches, viewing history, click behaviour, and the similarity between content already selected and other content in the same or a related category that is likely to be appealing to that viewer. As YouTube itself describes the process: “YouTube’s recommendation system actually finds videos for viewers, rather than viewers for videos.” 26
The process is similar for TikTok, but the algorithm operates differently. The TikTok algorithm is extremely sophisticated and is the secret sauce that makes the experience of using TikTok not unlike eating chips. If you’re in for one, you’re in for a dozen. TikTok has been referred to as a “rapid, hyper-efficient matchmaker” 27 and indeed it is, serving a mix of content from creators you follow and those you’ve yet to discover. The blend of familiar and new content is tailored meticulously to user preferences, making the platform addictive and fresh. It’s an ever-evolving system designed to keep users engaged, entertained, and constantly scrolling for more as it learns from users’ behaviours.
In many ways, the world of digital content creation is an experiment that never ends…. For a sense of just how subject to change algorithms are, experts estimate that Google ran over 800,000 experiments on its search algorithm in 2021, resulting in 5,000 changes in that year alone.
So, if there’s a new gatekeeper in town, it could be argued that it’s the algorithm. At any point in time, it may be a digital creator’s friend, favouring the type of content they’re posting because it’s in line with popular trends and user behaviours. But just continuing to post that kind of content doesn’t necessarily mean it will continue to be smiled upon by the algorithm, so at other times the algorithm can become one of a digital creator’s biggest challenges. Also, the algorithm’s sophisticated inner workings — referred to as a “black box” by some — can give us the impression that we’re being exposed to a broad and balanced range of information. As algorithms are used extensively in everything from content recommendation to health care, finance, and human resources, bias is an area currently being investigated by researchers at top academic institutions. 28 Consumer sociologist and York University Schulich School of Business Professor Markus Giesler echoed such concerns when interviewed for Perspectives: “The digital media marketplace is dominated by algorithms built to maximize engagement. Such marketplaces are less transparent, more complex, and more fast-paced … [and] more often than not the ways in which these platforms shape or constrain consumer beliefs are extremely subtle. The result is that there is an illusion of choice, of control, and of autonomy.” 29
One antidote for the power of the algorithm is the power of community, and one of the original and most compelling features of the internet is the ability to create communities. Finding like-minded people online, located anywhere on the planet, can be as simple as following a hashtag or a comment thread, or can take the form of ongoing engagement, such as the detailed discussions that take place on Reddit and Discord. But not all venues for online community are created equal, as Benjamin Mako Hill, an Assistant Professor in the University of Washington’s Department of Communication, told Perspectives: “Online communities are deeply shaped by the platforms and their technological and social features and affordances. It’s much more difficult to build community in the comments section of a single page than it is on a platform, like Reddit, that is built to support this over extended periods of time and many conversations.” He also pointed out that online fandoms can be so passionate that they create competition for the digital content creators themselves, and that “smart content creators will often try to work with communities to build and support infrastructure in many places to complement the main venues where they are publishing content.” 30
In many ways, the world of digital content creation is an experiment that never ends. You can’t just come up with a single strategy and stick to it. This is as true for the management of online communities as it is for the mercurial nature of algorithms. For a sense of just how subject to change algorithms are, experts estimate that Google ran over 800,000 experiments on its search algorithm in 2021, resulting in 5,000 changes in that year alone. 31 The goal of these ongoing technical tweaks is to improve the quality, authority, and relevance of both the content and advertising served to each user. This not only creates the extremely personalized user experience that is a hallmark of digital content, but also enables the matching of very specific content to very specific audiences. With the broadcast model focused on content that appeals to the largest demographic segment, an opportunity has emerged for a content ecosystem that can satisfy a broader range of the audience’s interests — and along with that opportunity has come millions of digital creators around the world. Some are happy to just have an avenue for expression, and some will take their talents all the way to the top. As Andrew Peterson, Head of YouTube Canada, told Perspectives: “What’s incredible about the creator economy on YouTube, is that niche is the new mainstream — you can come with any skill, passion, or interest and find a community amongst an audience of billions and build a sustainable business…. It doesn’t matter anymore if you don’t have the right connections, fit the mold or have the biggest budget. If you are passionate about your niche and have a story to tell, you can get started.” 32
- Neil Postman, “Five Things We Need to Know About Technological Change,” talk delivered in Denver, CO, March 28, 1998 (https://www.cs.ucdavis.edu/~rogaway/classes/188/materials/postman.pdf).
- Simon, H. A. (1971), “Designing Organizations for an Information- Rich World”, In Computers, communications, and the public interest (Baltimore: Johns Hopkins Press)
- https://www.researchgate.net/publication/220167300_The_ value_of_openness_in_an_attention_economy
- https://www.insiderintelligence.com/chart/263759/average-time-spent-per-day-by-us-adult-users-on-select-social-media-platforms-2023-minutes. Note that these figures are for U.S. users, reported in mid-2023, and we assume them to be generally consistent with Canadian social media use.
- Jamie Gutfreund, Chief Growth Officer at Whalar, quoted in The Information’s Creator Economy newsletter, June 16, 2023.
- Prof. Robert Kozinets interview with Leora Kornfeld for Perspectives, September 9, 2023. Information on the most recent Edelman Trust Survey can be found here: https://www.edelman.com/trust/2023/trust-barometer
- The most recent data available from the Canadian Media Producers Association (CMPA) reports average budgets in the range of $350,000 to $1.4 million per hour (English-language programming) and $180,000 to $700,000 (French-language programming). The cost tiers vary significantly by genre (e.g., documentary and lifestyle programming are at the lower end of the range and fiction is at the highest). See https://cmpa.ca/wp-content/uploads/2023/08/Profile-2022-EN_v4.pdf
- See, e.g., https://conference.nber.org/confer/2019/YSAIf19/SSRN-id3361280.pdf and https://www.nature.com/articles/d41586-019-01413-1
- Prof. Markus Giesler interview with Leora Kornfeld, for Perspectives, September 9, 2023.
- Prof. Benjamin Mako Hill interview with Foresight and Innovation, for Perspectives, October 5, 2023.
- Andrew Peterson interview with Leora Kornfeld, for CMF, April 6, 2023. Updated for Perspectives on October 5, 2023.