There is no creator economy, just an economy of creatives - Feat. Ronald Pruett

Ronald Pruett has spent decades in direct response TV, home shopping and direct to consumer, and now sits on the business side of Gemma Stafford's Bigger Bolder Baking, the YouTube channel that has become the number one baking podcast in the US, and most recently a run on QVC. He calls himself the suit. His argument is that what we call the creator economy isn't one yet, because the participants can't really trade with each other, and that what exists today is an economy of creatives instead.

In this episode, Ronald is blunt about the structure most creators are working inside. He explains why platforms have an incentive to produce some stars but not too many, why he thinks it's now close to impossible to break out as a new star on YouTube, and why ad revenue, useful as it is, works like a slow poison on a business you don't control. He draws the line between an audience and a community as simply as anyone has: an audience watches, a community buys a ticket. Then he lays out what would have to change for creators to become a genuine asset class, using the music catalogue market as the model, and why hits, predictable revenue and owned IP are the three things institutional money will want before it arrives. Plus the content, community, commerce sequence he uses with Gemma, why direct to consumer brands with no community in the middle went bankrupt handing their money to Meta, and why operators who understand both media and commerce are the biggest missing piece in the industry.

A big picture conversation about where the creator economy actually is, and what has to happen before it becomes something you can invest in.

Topics covered: creator economy vs economy of creatives · platform incentives and the power law · audience vs community · content, community, commerce · ownership of IP and distribution · lessons from the music catalogue market · creators as an asset class · stars and suits

What is Creator Generation?

Creator Generation brings you behind the scenes of the creator economy, featuring top YouTubers and experts who share the strategies, lessons, and stories behind building successful channels, growing incredible businesses, and driving the world’s biggest online video successes.

Fred: 00:00

Hey. I'm Fred. And I'm It. And this is Creator Generation. Creator Generation of hype.

Ronald: 00:05

An audience can be very passive. I think that a strong community is literally someone who would purchase what you have to sell. You know, many of us are very passive viewers, but how many will really buy a ticket?

Ant: 00:19

Is there really a creator economy or just an economy of creatives? Today, we sit down with Ronald Pruitt to dive into the big picture of the creator economy. Ron has spent decades in direct response TV, home shopping, and direct to consumer, and he's the business partner of Jenna Stafford's Bigger Bolder Baking, taking it from YouTube to QVC. His take? Creators are a new asset class.

Ant: 00:45

It's time to start building like one. Ronald, welcome to Creator Generation. Well,

Ronald: 00:53

hi, everybody. I'm Ron Pruitt. I'm based North Of Boston in beautiful Massachusetts. I spent much of my life either working abroad or traveling abroad, and I got hooked on this new thing called the Internet in the mid to late nineties. And somehow, strangely, it led me down the path of direct to consumer companies, home shopping, direct response television, working with celebrities, and now literally have fallen into the creator economy, which has been a joy and a great way to pull together a lot of my experiences to work with other like minded entrepreneurs who are literally creating things out of thin air and building businesses around it.

Ant: 01:44

Love it. So speaking of creator economy, and I think that's the perfect place to dive in, you've got a, like, a really particular perspective on the creator economy, and maybe we shouldn't be using that term or maybe it's something else. Instead of me skirting around that and being vague in that, when I when when we when you hear the word creator economy, what do you what do you hear and what do you think?

Ronald: 02:10

Yeah. You know, long ago, learned to have a clearer point of view, a POV, and I've tried to think about that when I get involved with different business projects. I think it helps people really shape where you're coming from. And I, you know, as you know, I've, I've written a bunch, of articles more recently, but over a long period of time about the so called Creator Economy. I firmly believe in it.

Ronald: 02:35

I look at it globally, you know, because of my background. But the reality is it's very fragmented. You have different categories that probably gain more favor than others, like, you know, beauty as an example over, say, knitting, which doesn't mean that it's a better category, it's just a more popular one. But as I looked at it, really saw that we, we are in an economy of creatives versus a creator economy. And it's subtle, but yet it's not because, you know, to truly be in an economy, all the participants need to be able to trade with one another, whether they're in your country or my country, regardless of tariffs or trade blocs or anything else we have.

Ronald: 03:21

And when you talk about the Creator Economy, it's still somewhat of a mirage made up by various investment analysts and now others in the media who want to create this sort of ecosystem and sort of lead everyone to believe that we're all participants in this creator economy. But when you really look at it, it's very fragmented and it boils down into unique distinct groups who in many ways never connect as one would in a true economy.

Ant: 03:58

So then calling it a creative economy, what are people saying it is? And what is it really?

Ronald: 04:06

I think and I have a digital bent on this. I mean, if you talk, you know, who's a creator? If you look at The UK, they have different, you know, studies about the creative industries or investing into the creative industries, which is all terrific and I know you know this. But, you know, that makes up music, which I think we all love, the film industry, the theater, you know, those are creative industries, writing, art. I mean, it's a very broad canvas, so to speak, to use that metaphor.

Ronald: 04:37

But to me, the creator economy has really evolved out of the digital worlds. And it may have started with, you know, direct to consumer web companies. Some did well, some did not. And then the tools by which an individual could sort of promote their own brand, if you will, YouTube, Meerkat, Vine, you know, Twitch. There were a whole number of these platforms that allowed individuals to become so called creators and to derive, hopefully, revenue from that.

Ronald: 05:16

And that, I think, started probably in earnest around 2015. And I was more or less involved with that in live streaming. One could argue a little bit earlier Twitch was around. But it really started in The US and I think other markets like ours around that time, while simultaneously live streaming was really taking off in China. So I think by the same token, they were leveraging these platforms to become creators.

Ronald: 05:49

And that's sort of where we are today, think, still trying to make sense of those evolutions.

Fred: 05:55

I want to ask a question. You talked about the articles you'd written and the structure of the Creator Economy overall. And you mentioned that it's concentrated by design. Can you sort of help us understand what you mean by that concentration by design?

Ronald: 06:10

Yeah, I look at it a couple of different ways. If you're the platforms, it's great, you know, I know there's terms like the democratization of the creator economy and that's, that's all very noble. And they want a lot of people to use the platforms to generate more advertising revenue. I mean, that, that is the model. But at the same time, they don't want too many to do too well, although we need hits and stars, is a theme you'll also see I write about a lot because of my background of seeing you have to have hits in music or any movies.

Ronald: 06:50

You have to have hits to drive new categories. But you don't want the stars to become too big for your platform. So the platforms sort of by definition have to moderate how many become stars in order to get more to join the platform. So it's a push and pull.

Fred: 07:12

You're saying the platform specifically moderate who becomes a star and how much of that star power they have?

Ronald: 07:18

I think they help quite a bit. You know, if you look at like the algorithms of say YouTube, it's very hard today to become a new star on the YouTube platform. TikTok has a completely different approach. So you'll have a new generation migrating to that platform because it's, I would say, nearly impossible to become a big YouTube star today the way the algorithms are set up.

Ant: 07:47

And when you say star, you mean someone that transcends niche, right? Like you're talking

Ronald: 07:53

Or completely owns a category that they create. Now it could be in card collectibles or baking in the case where I spend some of my time, but it has to be a king or a queen in a category that they've built and that they own where they're the dominant authority in that space.

Fred: 08:16

And a and a follow-up to that. Do you think that the people entering the creator economy now actually wanna be the leaders in that category? They wanna be the biggest stars or they're saying, hey, I love what's happening here and I wanna piece the pie. I wanna be well known, but I don't need to be the best.

Ronald: 08:32

Yeah. That's a really good question. I mean, it's like music or, you know, I I always say creators create. We love music. I play music.

Ronald: 08:39

I don't get paid for it. And you'd probably pay me not to play, okay, if you heard me play. But I think people just do it because it's an expression of who they are and it's fun. Now some though may be more ambitious and they see it as a ticket or a way to really grow an audience and maybe create their livelihood out of it. So I think that there are different tiers of desire when it comes to wanting to be a star.

Ronald: 09:11

But as I've noted many times, very few, very, very few will become just like any other industry stars.

Ant: 09:19

Is that a factor of just attention? Like there's X amount of time and attention that people have they can?

Ronald: 09:27

It's really, you know, I think it's a fundamental power law in particularly the entertainment business. You could maybe even say in, say, sports. But, yes, there are teams with many gifted people basketball, baseball, football, however you define football. But usually the team has a couple big stars. They're probably the ones that are getting the majority of say the promotional fees.

Ronald: 09:55

They're blockbusters. And that's the other thing I've learned over time, again given my background and say, you know, commerce or in a lot of industries, frankly, where the power moves to just a couple key players, whether it's in the automobile industry or now the Creator Economy. Now, many won't like that because maybe they're not at the top tier. But the others who are just enjoying what they're doing, great, great for all of us that we have so many unique people in the world that want to share that.

Fred: 10:30

And you mentioned that idea of that democratized sort of opportunity, right? The platforms are designed to do that. And obviously, you're saying not everybody breaks through. So where does it fundamentally break down? Where do you see that breakdown happening?

Ronald: 10:45

Well, I think, you have to look at it globally, right? So I'm going to look at Africa where I've spent more time sort of looking at the markets, maybe working with individuals there outside of, say, The US. The, like, for instance, of mobile telephony was very high. So there were some barriers to individuals breaking out in those markets. That was a cost issue.

Ronald: 11:15

But I think generally around the globe, access is fairly easy to get, except when it comes to the access of big audiences. Because remember the model. Most of the models today, and we can talk about this, where I talk about content, community, and commerce. Most of the platforms that have driven the growth of the Creator Economy, and I mentioned some of them earlier, are driven by ad revenues. And I can see this with my partner, Gemma here, who's an Irish chef, twelve year YouTuber, audiences around the globe.

Ronald: 12:00

But the breakdown of payments, say, in The US and North America versus her large following in India are dramatically different. It could be the purchasing power, the purchasing power parity of certain markets versus others and where the advertisers are willing to pay for those audiences. You'll see dramatic differences. And so that is often what I say about access. It's not getting on the air.

Ronald: 12:30

It's getting audiences to find you when you're there.

Fred: 12:34

Yeah. You mentioned, Gemma. This is Gemma Stafford, right? You were talking about? Correct.

Fred: 12:39

Can we talk a little bit about her? And obviously, you said you've worked with her and what is she doing that makes her sort of unique in her approach?

Ronald: 12:50

Well, Kevin Kurtz, her husband and Gemma Stafford and I, we're partners in, Taste Buds Entertainment, Bigger Bolder Baking, Bold Baking. I think Gemma is a unique individual because she's very skilled at what she does as a craft. So she has, you know, tremendous authenticity. And I'm not a baker, but when bakers listen to her or see her they know right away that she's the real deal. They also fundamentally understand the data, around their viewers and they've been on YouTube now for over twelve years.

Ronald: 13:29

So they brought what Gemma did onto YouTube. Kevin also very skilled, worked in the movie industry, gets data. So they're able to, you know, pull together the shows that work. They also have a lot of integrity. And this is very important, you know, particularly as a partner.

Ronald: 13:50

They have tremendous drive. So when we talk about stars, think you need to pull together those various components. If you're listening to this and you're an entrepreneur and you could be in Africa, New Zealand, it doesn't really matter. But you need to pull together in your own person the skills, the integrity, and I think the drive to want to make it in a defined category. And it could be a category that you define because you don't want to just, you know, tread into someone else's space.

Fred: 14:24

And do you feel that those are the defining elements that made Gemma stand out and say like, okay, I can make it in this crowded space where only that certain amount exceed? Would you say that would be the defining element?

Ronald: 14:37

I think it's a defining element for almost all entrepreneurs. I mean, you know, when you get to a certain, say, scale or size, do they need, say, capital to expand? That might also break down. Like the venture capital industry in The US is very developed. If you go to France, getting there, but it's not as developed as, say, The US.

Ronald: 15:02

And it's nascent in maybe Argentina. So I think that sometimes when you need that fuel to take what you've created and get to the next level, yes, there are certain restrictions. I think a lot of them are you know, more geographic. But from working around the world, an entrepreneur in one place is usually very similar to an entrepreneur in another place.

Ant: 15:28

Just, like, picking up, you know, some of those those those really key elements that the, you know, creators need to have being, you know, drive and and desire to make that happen as being a really a key one. It's changed over the years, but when you look at someone, Gemma has been twelve years on YouTube or even Creator's five years versus someone coming in now, the opportunities weren't business to start with ten, twelve, fifteen years ago. It was all passion. And still most creators enter through, like we flagged before, creativity. They want to create, they want to make, they want to have impact or share.

Ant: 16:16

I guess it's is there a gap then? We're looking for creative individual to then be entrepreneurial from a business perspective as well? Like, how is that gap filled?

Ronald: 16:33

Well, you know, it gets back to the question, are entrepreneurs, you know, born or made? And it's a really difficult question to answer. I often think that they're born, but because I think that you can see that innate drive sometimes at a younger age. On the flip side, very often the lights go on when you suddenly are able to expand your passion into what might become a business. And I love to see that.

Ronald: 17:11

I mean, I think that part of what I do is help those individuals to maybe shape the structure of what they're doing so that they can turn it into maybe something more than just a hobby or a passion. So it's a combination of a number of things. I also think though that very often these categories are created or these individuals create them some somewhat randomly. You know, I I'm I'm not sure that you could just say, I'm going to go be, you know, number one in I'm looking at a lamp, you know, creation of lamps But it may come my way that suddenly, and we see this a lot, that, I may suddenly have a lot of followers in that genre, and then suddenly I'm making my own lamps. So I do think there's a lot of randomness, but I also think there's a formula to moving down that path.

Ronald: 18:12

And a lot of it comes down to ownership.

Ant: 18:15

When you said formula, I'm like, Ron, give me the formula.

Ronald: 18:21

I I talk about a couple things. You know, Creator as a business. So all of us, we wanna be a business. I'm not really talking about building your personal brand. Okay?

Ronald: 18:35

Because that's, that's good for me. A business has customers. Right? So how do the creators who are developing content and maybe building this community then get into commerce in order to drive more revenue other than just, you know, advertising revenues from the platforms? And that that I think is is the trick, which we can talk about.

Ronald: 19:02

But then I also talk about the second big theme, and that's the creator economy as an asset class. And that has its own sort of formula required in order for it, you know, to get back to the beginning sort of our conversation for this, you know, economy of creatives to actually be part of a creator economy that drives opportunity and revenue to all involved.

Ant: 19:31

Well, let's unpack the asset class soon because that's super interesting. You mentioned, you you said this great word ownership. What does that mean? Maybe let's use Gemma as a case. Gemma made, what does that actually mean in building a business?

Ronald: 19:56

Yeah, I think someone like I mentioned a Basquiat or a Picasso as painters or great musicians or Gemma now as a baker and on YouTube, they see themselves as the hub with different spokes, different channels. But in the center, and it's really critical, they own their IP. Whether it's with partners maybe like me or on their own, it could be, you know, a book series or a podcast or a television series. But but they they control the distribution. So there's the content piece of it, the community, and then I I do talk about this a lot.

Ronald: 20:36

If you don't have your community built, it could be someone who buys your paintings. You won't have them with a commerce piece unless you have a community. Because at the end of the day, those are the key individuals who will drive your commerce.

Ant: 20:51

What's the difference between community and audience?

Ronald: 20:54

An audience can be very passive. I think that a community, a strong community is literally someone who would purchase what you have to sell. You know, many of us are very passive viewers, but how many will really buy a ticket? So to me, you know, the passivity in the Creator economy, it's such a trickle down economy because the revenues are all trickling down from the big platforms via advertising revenue. It's being able to back to what I was saying, if you have more control, more ownership, and those two go hand in hand in glove, then you're able to derive revenue in multiple ways.

Ronald: 21:38

Now it could be a product or it could be a digital service or maybe you start a travel agency. But the community has to help shape that. And I give you a really good example because I've been heavily involved with direct to consumer companies, and I write about

Fred: 21:51

this

Ronald: 21:51

too. What happened in that phase, people raised a lot of money. They started a direct to consumer company, say, soap, mattresses. And maybe they attached the celebrity to it. They all gave their money to Meta.

Ronald: 22:08

And then they all went bankrupt. Because it was so linear, they didn't have any kind of community in the middle of the transaction. And and that's what I think, you know, when I talk about businesses creators, content, community, and then commerce, by having that, that's what will enable you to grow with ownership.

Ant: 22:29

So I guess using that direct to consumer example and then overlaying that with creators, it feels like Creators, obviously, it's the community that's going be the moat for them. But then also the commerce section is missing for a lot, that's not new. Building, you know, businesses, having distribution of product, etcetera, whether that's digital, physical, that's all been worked out by by many, many times. But is is that then the community, the the moat? Is that the thing that's gonna create advantage for creators?

Ronald: 23:12

Yes. I think that's a really good term, Matt, to use actually. It's like a Buffett investment term, right? I mean, where you look for businesses that have moats, whatever that might be. I think it starts out as being very personality driven, you know, very user creator, it's that person and they build up a library or a catalog, but what comes after that?

Ronald: 23:37

And ultimately in business too, have to create and own a category. You have to be defined by something that's uniquely yours if you want to be a hit or a star. And I think music there are two industries that I look at that are always three to five years ahead of all the others, fashion and music. It's not really beauty, but I think fashion, the way the designers become stars and the way musicians control increasingly their output and their IP. There are a lot of lessons there for the creator economy.

Ant: 24:21

Yeah, there's that great scene in The Devil Wears Prada where he's talking about a blue sweater and it's pretty basic. Then the lineage of how that blue sweater actually came from the show five years ago that then would trickle through the fashion industry that was all cutting edge and avant garde then became your sweater that someone who doesn't care about this stuff, I think is the quote from Meryl Streep's character. Yes. Yeah, so that's really interesting. Think it'd be really great to get into You're talking about ownership of distribution.

Ant: 25:01

Using Gemma as an example, what does that actually look like? What is that ownership? And put it in this perspective of at the moment, most creators, if not all, apart from a few, are reliant on third party distribution platforms, whether that's TikTok or Instagram or YouTube, access the audience as well as revenue. Create a business that transcends that becomes something that lasts that we're talking about. You've got to own that distribution, you've got to own your IP.

Ant: 25:41

But what does that actually look like with a real world?

Ronald: 25:50

Yeah. Look, it's a big topic. I tend to break these businesses down into the media side and commerce. They're media commerce businesses very often. People use the term today commerce media, but I actually it's a nuance, but I flip it because the media, the content really drives the commerce opportunity.

Ronald: 26:09

Media alone is mostly advertising revenue. And I think it is true that particularly as a creator, you have to pick one or maybe two platforms where you crush it. It might be YouTube or today it might be TikTok. But as I can tell you in baking, someone might be really, really big on YouTube and have like a de minimis audience on TikTok. And I've seen that time and time again, or vice versa.

Ronald: 26:38

So, and that's the same in marketing. You might go really long on digital and do nothing on television. But having a portfolio over time, you know, the old the rising tide lifts all boats. I think it's very important today if you're really gaining strength in your own, you know, ownership that you're not beholden to just any one channel or platform. And you look at yourself, okay, I have media.

Ronald: 27:09

How do I move towards commerce? It's hard to start with commerce and then go into a media business. Right? A lot of people are trying to do that now. You'll see acquisitions increasingly, even in the last couple of weeks, where these big B2B or enterprise companies, HubSpot here in Boston, big couple billion dollar market cap, you know, US company, they're now buying like smaller, what I would call media companies.

Ronald: 27:35

Why? They're buying audiences. And they're very targeted. You saw, OpenAI just do it two weeks ago as well. They're paying huge dollars for very small podcast audiences because they're influential.

Ronald: 27:52

So, but each of those were started by what I would consider to be creators. Mhmm. I think, like, podcast hosts are creators. Right? I mean so but how do they then take that themselves if I'm just a podcaster?

Ronald: 28:06

Do I move into video with YouTube? Do I create my own podcast network? Which is actually easy to

Ant: 28:15

get into but hard to scale. So media content is the it creates the opportunity. Right? Like, it it's the fuel that then creates the commerce opportunity, essentially. Like, that's kind of part one is shore up and grow the media side of the business.

Ant: 28:35

Right? Is that is that a fair statement?

Ronald: 28:37

Yes. I think there are I have a rule of thumb. How do you make money while you sleep? And it it quickly sorts out a lot of what you're doing because and we've done this ourselves. Didn't think something would work, and guess what?

Ronald: 28:56

It didn't. And even if it did, if you have a certain hurdle that you're trying to hit, you could have a 100 of those, and it won't get you to where you're trying to go. So I think fewer, significant pursuits, whether it's a channel or, you know, avenues is always helpful. And it takes some soul searching, you know, or white boarding because we all love to do lots of different things. There's so many cool things, new technologies.

Ronald: 29:26

Oh my god, look at that new platform. Should I be doing live streaming? I mean, we could talk about that whole industry too. To do something live is much different than, you know, staged.

Fred: 29:38

I want to talk about the pathway you mentioned. You're talking about the creation of media. You're talking about the community building. Then you're talking about the transacting on that through commerce and the value of doing that. Now, we've clearly seen that there's tremendous opportunity that creators create by building that attention which is so unique today because everyone's clamoring for attention.

Fred: 29:59

But it's that transacting on that attention where you're talking about that ownership of the audience becomes a significant stumbling block for a lot of them, right? It's getting their mind wrapped around that and saying, oh, I've got to own that audience and then I've got to transact on that audience to make it more meaningful so that I can earn while I'm sleeping. Do you think that stumbling block happens is because a lot of creators are naturally not entrepreneurial? Do you think it's a lack of skills? Do you think what do you think is missing for that for that transaction to finalize?

Ronald: 30:29

I I look, I think it's all of the above. I mean, again, a lot of folks might think, look, I'm doing this for fun. This is my passion. I like to do this. It's crass that I would want to sell seeds to grow flowers under my name when I I really just like horticulture, whatever it is.

Ronald: 30:47

I think that a lot of people just produce music, art, film, documentaries, whatever, because they truly love it. I love it. I like to take photographs. But to take that step towards commercializing it is not always for the faint of heart. And frankly, artists, I think, are a lot like this.

Ronald: 31:07

Are all these art platforms like Sachi and others, and I've looked at a lot of startups that want to tie blockchain into it. They're like, woah, I just wanna maybe sell some art, but I don't wanna think about it. So I do think that the tools are there, But you need to have the time allocation and the desire to want to commercialize what you're doing. And not everyone wants to do that. So

Fred: 31:40

is that okay though if they don't want to do that? Is mean, obviously, we can see it from our perspective as, oh, you're leaving so much on the table. But if they're like, you know, I just wanna create content. I wanna use the on platform revenue. I'm okay with that.

Fred: 31:55

Is that okay?

Ronald: 31:56

I mean, personally, I think yes. Because if you really love what you're doing, then have at it. That's that's terrific. But I do think that over time, because let's face it, to do any kind of content creation, new idea generation, sketching it out, podcasts. If you look at the number of podcasts that start and the number that lasts, say, and I forget the exact number, but the dropout rate after like three podcasts is just alarming.

Ronald: 32:28

I think it's like an 80% dropout. And to me that indicates fatigue, which I think is a real, a real thing in the creator economy, you will, creatives that I've dealt with in the past. The the burnout rate or the amount of time that it takes to do a really good, you know, interview like you guys are doing here, by the way, or, you know, a YouTube video. It's it takes think one one told me it was at least nine hours on average for a really good YouTube video over, you know, five minute length. That's a it's a lot of work.

Ronald: 33:03

So I, I don't like, I wouldn't judge anyone if, if they don't want to commercialize themselves. But I think if you do, the tools are readily available. And, you know, I talk also or write about the, the creator economy as an asset class. And in order for that to evolve, it has to go beyond where I think it is today. You'll hear about, you know, Goldman Sachs said the market is 20,000,000,000 whatever.

Ronald: 33:32

Most of that is in advertising revenue that's being derived by the big platforms. That doesn't mean there's $20,000,000,000 washing around to all the creators that we know and love. No. Not at all. And the venture money and outside investors, they're going into more tools for creators.

Ronald: 33:56

But as we all know, a lot of creators like podcasters, they don't have a lot of money. So there's a real finite limit as to how many tools all these creators can use. Now to become more of like an asset class, I also have another formula, much like creators as a business, creator economy as an asset class, that I think you have to follow. And without that, we have what we have today, as I said, an economy of creatives, all struggling, you know, to move up usually in some food chain.

Ant: 34:35

What do you mean when you say asset class then? Like, explain that in, like, with the context of to to what it would be if we reached that within the creator economy.

Ronald: 34:46

So, you know, I talked about art earlier, fashion. I'm going to zero in on the music industry. And it's something I happen to like. It's, you know, I I love music. But there's a fascinating, not just industry dynamic, but, you know, the structure of it.

Ronald: 35:02

What's really happening in the last number of years is the artist catalogs. Whether the artist owns the original rights, mechanical rights, etcetera, or a third party owns the rights, there is a lot of acquisition. I mean, billions and billions and billions of institutional dollars, and I'm using American dollars primarily, acquiring these catalogs. And they're now selling them. So a lot of them are themselves, the acquirers, Primary Wave, Concord, BMG.

Ronald: 35:42

There's probably a list of, say 30 well or more, but 30 that you read about is probably more like 50 well capitalized organizations acquiring catalogs from artists, from Elvis to Madonna to maybe even in excess. Although I don't know if they've sold their rights.

Ant: 36:04

Kevin Parker. There we go. There's a pussy.

Ronald: 36:07

You know, is what I see eventually happening in the Creator Economy as an asset class. But to direct your question there, answer it, I think you have to have three things for that to really unfold. And number one, you need hits, as I've talked about. Individuals, or businesses that, you know, can drive revenue, is really important. And that usually is commerce driven.

Ronald: 36:42

It has to be predictable revenue. So hits, predictable revenue, and then ownership of IP. And this is what the music industry has. Bob Dylan, ownership, predictable radio play, and pick any artist that you want. They all get certain radio play, and they have predictable revenue streams.

Ronald: 37:06

Interestingly, older catalogs are often more highly priced than the new artists, because they are proven in their arc of revenues.

Fred: 37:19

So,

Ronald: 37:21

you know, to answer your question, I think you need to have that kind of formula where these creator businesses become part of a class of assets.

Ant: 37:32

Okay, we've covered some ground here, to wrap it in a bow, what does this mean for the business of a creator now? Is a creator listening in? They're in this, right? They're on the front line of it. They've got a business that potentially got products and making revenue outside of their content and advertising over the top of it through platform revenue.

Ant: 38:00

What does this mean for this Creator class?

Ronald: 38:08

Yeah. I think and that's where it gets real. Right? I mean, with zero hype, and this is I'll use Gemma again as an example. Successful on YouTube, then a couple of bestselling cookbooks, and then created the number one at the time, last year, the number one baking podcast in The US.

Ronald: 38:34

So we we sat down as a group, and Gemma drives a lot of this because she's the star, and I'm the suit. K? So that's another important thing. Sometimes you need great partners or partners that don't really want to be the star. And you have to look at, okay, here's who I am and what I stand for and what I like to do.

Ronald: 38:56

I think it really has to be an internally driven thing of an authentic to, not to use that overused word, but what is it I could now do if I want to move from beyond just being a content maker into driving, you know, sources of income out of this or fame and looking at yourself as as being in the the hub of your universe and literally walking through each. Now I'm also a believer in asset light businesses. So there are a lot of partnerships. I mentioned like Gemma was on QVC, which if you don't know what that is, if you're listening, it's, you know, home shopping, you know, big player. I know you have big players in Canada, in Australia, The UK, QVC, Italia.

Ronald: 39:46

One of our goals was to, with a great partner, create our own bakeware and food products, and move towards home shopping, which still, despite what you read, is a really powerful channel. And last week Gemma was on QVC here in The States for a whole number of days, most of a week actually. So for us it was like a watershed event because everything else that we had, again, looked at was building towards that kind of, I don't know, outcome. There are a number of things we've tried that didn't work, or didn't work as quickly as we wanted them to. Some were more television oriented.

Ronald: 40:36

But I think we tried to learn quickly and apply data. And then, you know, we took a step back and said, Okay, does this feel right? Like, do you want to get up in the morning and do this or not? If it doesn't feel right, you know, don't pursue it. But think about it as asset light.

Ronald: 40:56

Who can be your partners? Who who are really into what you're doing? The suits. Maybe someone like me who is is more interested in the mechanics of the business and letting you shine upfront. Yeah.

Fred: 41:13

Building on that just a little bit, we're talking about that basic shift from that commerce industrialist model like the and thinking versus the influencer model in a very nutshell approach. What do you think creators actually, if you if you have to say there's this specific thing they have to change or give up to make that shift from the influencer model to that more commercial model, what do you think that is?

Ronald: 41:39

That's a really good question. And most creators I know really do not like to be called influencers. And, and it gets back to that term community. The difference ultimately to me is ownership and ownership of IP. Now an influencer, and there are micros and believe me, I've had this conversation a lot where I differ from many on the power of influencers.

Ronald: 42:10

I'm not saying they're not a great conduit for say building brands and maybe driving some sales. But it's really difficult to say that you own an audience. They're very fickle and they're really hard to measure. And I know a lot of great influencers in travel and beauty. And again, there are certain categories that I think they congregate around.

Ronald: 42:36

But an influencer has for a moment of time an audience. A Creator, I think if done correctly, has a community and long term ownership in their intellectual property and what they create. They're almost fundamentally different. And I think if you're an influencer, you want to try to figure out how to become more of a creator, in my opinion, for the for those clear reasons.

Fred: 43:10

You know, a lot of creators do look at the MrBeasts, and they think, oh, that is what it should be. But that's not necessarily the case. But, you know, MrBeast does have a lot of pull and a lot of drive, and and he does shape the way, a lot of things go.

Ronald: 43:23

I mean, what he's done is absolutely amazing, for, you know, a number of reasons. Not only the, say, community and audience that he's been able to develop, but the way that he has diversified his revenue streams, right, into Feastables and food. And I don't talk about him that much because I somewhat feel he's overly used. And I think that's one of the problems, but it's sort of what I've been talking about that only a few are going to make it really big. And I'd like to think that there are others in different categories who will be as big as Jimmy is.

Ronald: 44:00

Now smartly what he's done is back to the stars and suits. He's hired a lot of suits around him to help him scale his business so much so that it's rumored, not that I know, but I've heard it, that he may be going public this year, doing an IPO. So Mr. Beast and his empire goes public, which I think would be a real watershed event for the creator economy because a lot of folks like us will look around and say, well, hey, how do I actually invest in this? How do I really participate because I've been reading about it or I may buy a book from someone I follow, but it's not really an asset class.

Ronald: 44:46

I can't invest in it. Well, now you can. Who's next? Yeah. If who's next after MrBeast?

Ronald: 44:56

And then who are the companies in the ecosystem helping me as a creator? How do I create products? Whether it's digital, I mentioned earlier, like a travel agency. How do I actually take that step? Who's really helping me with capital and know how that I trust?

Ronald: 45:17

They don't always go hand in in hand, they're hand in glove, but like, that's what I need. So that's where I think some of these watershed events are really going to turn this into what I call, you know, an asset class.

Fred: 45:29

Yeah. Look, And you're talking about this before, which is really interesting. I mean, you you've worked with creators who who've done really well with which Emma made. But, you know, you are a key part of that journey. I think a lot of Creator is like, hey, I need someone to be my business partner, the suit like you described before, as that key part of my journey.

Fred: 45:51

How do they find that? And who are the who do they turn to?

Ronald: 45:55

Yeah. Look, I think that is one of the biggest gaps. I don't mind being called a suit. I sort of say it jokingly. But I think actually what it does is it reassures the star that like, I don't want to be them.

Ronald: 46:09

Yeah. Right? But I would put out a sign that basically says operators need it. And look, a lot of folks that have become well known as a creator or YouTuber, Viner before them, they don't have good, like I would say business partners. And they don't really know where to start.

Ronald: 46:26

I think that's one of the big opportunities. And looking at, you know, whether it's education or MBA or different types around the creator economy, there's not a lot.

Fred: 46:38

Yeah.

Ronald: 46:39

And there are not a lot of operators because you have to understand media and commerce. And I've actually found over the years that folks that I've worked with in media or television, they didn't really understand digital. Yep. And, and it's still that, today that's still the case. And they don't understand podcasting either.

Ronald: 47:01

So like, there are all these strange, you know, little segments here. But more importantly, and if you look at a lot of the deals that are happening in the, you know, Creator world, ask yourself, well, wait, where's the commerce component in this? Most of them are actually media roll ups. Yeah. Whether they're agencies or media platforms.

Ronald: 47:31

Okay. That just means more ad revenue, which I think is a little like poison. It is because the algorithm can change on a dime. You have no control over it.

Ant: 47:48

I actually wrote about this last week, and this goes out probably a few weeks ago, about like, God, what is it? The ick that stops creators. And I've worked in the commercialization of ever since I walked out of university. My first job was in a commercial art gallery helping artists sell paintings, and then in theatre and independent arts, and now, you know, Creator Economy and Creators, helping them commercialise their creativity. One of the biggest things that stops people, creators, creatives, is this discomfort with selling, making money from their amazing creativity.

Ant: 48:35

I'm long winded of this as I was writing about, I was writing about the but using the example of this great cycling media company that I absolutely adore, Escape Collective, who originally were acquired as a different company from a big media company. The acquirer eventually gutted them and they phoenixed as Escape Collective. But when they came back, they were, We're going to be member funded wholly. We're not going run ads because ultimately our audience actually just becomes a customer and a click for someone else through the advertiser versus us actually serving our audience with the most value possible. And so your statement of advertising is poison, even though it is very important fuel at the moment for creators and the creator economy, it might be the sort of slow radiation poisoning or something.

Ronald: 49:37

Well, do mention it a lot because platforms have enabled the creator economy and allowed it to develop. Really, the tools are there. I, I, I don't think it's because creators are going around asking for a platform. The platforms allow them to come on and start to create. But their business model sometimes can become diametrically opposed.

Ronald: 50:02

It's great that it allows me as a creator to build an audience. But as I've said about, like, influencers, those audiences are very fickle. And they're also usually seeing me say for free. But it's fine if I'm getting some advertising revenue, but tomorrow I could hear, oh, they changed the rules. The algorithm's different.

Ronald: 50:24

Your payout's lower. We're pushing you down a tier, what have you. I I that's why I think it's poison. And it can also make you a little lazy or passive. And I, I know a lot of creators don't like to hear that, but you really have to look at yourself and figure out what can you control and not control.

Ronald: 50:44

And a lot of them won't don't really wanna dive into the business issues, and that's fine. That's fine. You can just do cover songs, but if you wanna do originals and get get the deals, you gotta like Taylor Swift, you gotta sit there and and do your own thing. But you have to be wise to not only the day to day you know, I mentioned earlier, the street level stuff of what it takes to create, but to the more macro and strategic industry changes that are happening above you, but that will directly impact your growth.

Fred: 51:23

Very good.

Ronald: 51:24

I just gave you like gold for hot.

Fred: 51:29

I did. I said it. I said that was the one.

Ronald: 51:31

Mint it. Coconut.

Fred: 51:34

That's why I wanted to keep it going. No, it was really good. I mean, also run a program called the Creator Economy Playbook. And it's designed for traditional media practitioners or people who've been in more traditional spaces who are interested in the creator economy. And everyone thinks if you're outside the creator economy, the only way to get in is to make content and that's not true, right?

Fred: 51:55

What we say is, a lot of the people we talk about, they're very experienced in this space like you are across commerce, across business, where we have a

Ronald: 52:03

lot of great

Fred: 52:03

producers who bridge art and commerce. And there are a lot of creators who could do very well if they had someone like that on their team and really take advantage of some of the opportunities that you've been mentioning that are typically left on the table. So I think the next couple of years in the credit economy are gonna be really fascinating for that reason as it professionalizes and more people from outside the credit economy are able to help and then the creators build on the opportunity and commerce elements that you've talked about here.

Ronald: 52:36

One last thought for you, gentlemen, because I've been noodling this myself. You know, we're talking about helping creators grow and expand. But the outside, there are a lot of investors, you know, private equity venture companies, governments. Because, you know, like Panama, where I just happened to visit, they have like a whole initiative there around the Creator Economy. Right?

Ronald: 53:05

And The UK is trying to do more of this. From that macro perspective, and again, another sort of session, how do you help them understand the Creator Economy? If you're a big corporation, Procter and Gamble, whatever, big American group, I'm trying to understand this globally. And as you know, each market is so different. How do I attack the creator economy?

Ronald: 53:37

What if I wanna invest in it? What if I wanna buy creators' platforms? What do I do? Investment bankers aren't looking at that. I just think that's another another way to look at it, the macro coming in to the micro.

Ronald: 53:52

We've been talking about the micro growing out, but helping, I'm gonna say moneyed institutions or governments who are really interested in building this in their own country to create something unique. That's super cool. And that, that's a three to five year window. So, I mean, like, a course could be just for governments, UNCTED and some others, which are these, you know, Geneva and Paris based organizations that want to and they do Creator Reports, which I've read and I've talked to the people there. How do you help them shape policy in some respects?

Ant: 54:35

Because there is so much smoke and mirrors and misinformation or not just gaps, right? There's like a translation gap from creators, what's really happening to the surface level numbers and then policy and everything else. It just yeah. It's a huge leap.

Ronald: 54:56

Yeah. I mean, look, being in the macro policy business is different. I try to shape it. I'm in the hits business. And I have to, like, remind myself sometimes because you can get lost in it.

Ronald: 55:08

It's fun and, you know, everyone's great and, but, you know, really you need like some parameters around it. But if you believe that the future is gonna be created by these individuals doing really cool things and the next big brands or whatever are gonna be created by these individuals, then, you know, you need some parameters to shape the thought there.

Ant: 55:33

You know what? I think that's a bombshell to leave it on. We could talk all day, Ronald, than we have before offline, and we will continue. But that ownership, that creator community, own your IP and be hub, the center of all that. That's the opportunity for Creator.

Ant: 55:58

Ronald, thanks so much for joining us.

Ronald: 56:00

It's my pleasure. I really enjoyed it.