Indonesian Influencers at Risk of Poverty, Signs Already Emerging in America

Jakarta, CNBC Indonesia - Many people aspire to become famous influencers like YouTuber Mr. Beast or TikToker Charli D’Amelio. In Indonesia, one prominent social media celebrity is Raffi Ahmad.

However, the glamour of the content creator world is not as rosy as it appears on your smartphone screen. The industry is becoming increasingly crowded, sparking fierce competition for earnings.

Platforms are reportedly less generous than before in providing commissions to content creators. Major brands are also becoming more selective in partnering with influencers.

This is according to a report from The Wall Street Journal. One example is Clint Brantley, a full-time content creator for the past three years.

Brantley shares content on TikTok, YouTube, and Twitch. Most of his content revolves around trends related to the mobile game Fortnite.

Despite having over 400,000 followers and an average of more than 100,000 views per piece of content, Brantley’s income last year was lower than the median annual wage for full-time workers in the US in 2023, which was US$58,084 or approximately Rp950 million.

The 29-year-old man is not ready to commit to renting an apartment due to his unstable income. Currently, Brantley still lives with his mother in Washington. “I am very vulnerable,” he said, quoted from The Wall Street Journal on Wednesday (19/6/2024).

The Wall Street Journal states that achieving a decent and reliable income as a content creator is difficult, and it will become even harder.

Platforms are sharing less money for popular posts over time. On the other hand, brands are more specific in selecting deals with influencers.

This situation is worsened by the threat of TikTok being banned in the US in 2025. Many content creators are anxious about whether they can still earn from social media if one of their income sources is removed.

The Influencer Industry is Becoming More Crowded

According to a 2023 Goldman Sachs report, hundreds of millions of people worldwide post entertaining and educational content on social media. About 50 million people earn money from it.

The investment bank estimates that the number of revenue-generating creators will grow at an annual rate of 10% to 20% by 2028.

This contributes to an increase in earners, although the Department of Labor does not track influencer salaries.

On average, content creators need months or even years to accumulate income from social media platforms, brand collaborations, and affiliate links. However, as more people seek livelihood in this industry, the ‘pie’ to be shared becomes smaller.

According to NeoReach, last year 48% of influencers earned less than US$15,000 or Rp245 million. Only 14% earned more than US$100,000 or Rp1.6 billion.

This income disparity among influencers is determined by several factors. For example, whether the influencer works full-time or part-time, the type of content shared, and the duration of their career as an influencer.

Some people who became famous during the Covid-19 pandemic and focused on popular topics like fashion, investment, and lifestyle hacks admit they benefited greatly due to the timing.

However, behind it all, content creators admit that this job is very draining in terms of energy and mental health. They must constantly think about what content the audience will like and seize the right momentum.

Influencers spend days planning content, producing it, and going through the editing process before uploading to social media. They also must always interact with fans to maintain popularity.

“This is a very demanding job compared to what most people think,” said Emarketer analyst Jasmine Enberg.

“Creators who can make a living as influencers have been doing this for years. Most don’t become big overnight,” the analyst said.

Moreover, independent influencers do not receive benefits like office workers. They do not get health insurance, pensions, or annual bonuses.

Amid inflation and economic uncertainty, influencers face increasing pressure to secure their finances.

Platform Incomes are Decreasing

From 2020 to 2023, TikTok had a funding programme for creators worth up to US$1 billion. YouTube, through its Shorts feature, also allowed creators to collect around US$100-10,000 per month via a temporary funding programme.

Instagram Reels provided fluctuating rewards to creators. These large bonuses were tactics to encourage more people to create content on their platforms.

However, platforms are now changing their payment policies for content creators. The requirements for TikTok earnings have been increased. At least, they must have 10,000 followers with a minimum of 100,000 views in a month.

Instagram is also testing an ‘invitation-only’ programme that provides cash rewards to creators who share Reels and photos.

YouTube introduced an ad revenue-sharing programme last year for Shorts creators who have at least 1,000 subscribers and 10 million views in 90 days. They will receive 45% of ad revenue for the content they share.

Over time, TikTokers admit it’s getting harder to make money. One of them, Ben-Hyun, said that in March he earned US$200-400 per one million views. However, his income has now declined even though his followers have grown to 2.9 million.

Ben-Hyun admits he now only gets US$120 for a video that garners 10 million views. This shows that even with a large audience, it’s still difficult to monetise if relying solely on platform earnings.

Danisha Carter also shared similar concerns. She said her TikTok has 1.9 million followers.