Spotify is the latest company to launch a creator fund, building on a trend among large firms like TikTok and YouTube to enter the creator economy by enticing popular users to create content for cash.
What’s new: The Stockholm-based streaming giant recently debuted Spotify Greenroom, its live-audio competitor to Clubhouse. Spotify acquired the Locker Room app in March for about $50 million to quickly compete in the increasingly crowded live-audio space. Greenroom appears indistinguishable to Clubhouse but gives music fans an opportunity to engage with their favorite artists directly on the platform.
“(Greenroom is) a way for us to bring more and more creators onto the platform, and the more creators we have on the platform, the more unique, original, differentiated content we have. And it’s going to bring more users and more engagement for those users.” —Spotify CFO Paul Vogel
Greenroom Creator Fund: Spotify also launched the Greenroom Creator Fund, which aims to pay creators building content and community on the Greenroom app. The fund, which didn’t disclose how much money it’s earmarked for creators, is open for registrations and will begin payouts later this summer.
Payments: Spotify is scant on details, offering only that payments “are calculated weekly and based on a number of relevant factors, including the consumption of each creator’s live audio content and audience size.” If it’s similar to Spotify’s payment schedule for music artists, creators can expect a measly $.003 to $.005 per stream (half the rate of Apple Music). The platform also appears to lack transparency as Spotify says it “will contact you if you have earned money, and that “not everyone will earn a payment.”
What it means: Spotify joins a growing list of tech and social media companies — like Snapchat, Pinterest, and Clubhouse — that are offering payments to creators. As the space becomes more competitive, creators stand to benefit from increasing rates.
Billions of dollars are flowing toward the creator economy, and its growth is only now beginning.
Here’s a quick list of companies with funds aimed at creators across various mediums.
TikTok started its creator fund in 2020 with $200 million. It plans to grow that to $1 billion in the U.S. over the next three years, and more than double that investment globally.
YouTube created a $100 million shorts fund that will be dished out through 2022. The company says it’s “the first step in our journey to build a monetization model for Shorts on YouTube.”
Pinterest launched a $500,000 fund in which creator-participants can earn $25,000, as well as hands-on training to help them succeed on Pinterest.
Clubhouse is offering the Creator Grant Program that aims to support and grow its “emerging Clubhouse creators.” Clubhouse also unveiled features that allow for tipping, tickers and subscriptions.