What creators, brands, and platforms must do before the downturn hits
Hi, I’m Jim Louderback and this is my weekly creator economy newsletter. If you’ve received it, then you are either subscribed or someone forwarded it to you.
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TOP STORIES
A GLOBAL ECONOMIC WINTER LOOMS – WHAT CREATORS NEED TO DO NOW
The crazy tariff wars underway will affect the global economy and creators need to prepare. Sponsorships will take a hit, as EMARKTER’s @jasmine Enberg predicts Social Ad Growth could drop up to 10%, cutting into brand deals, affiliate fees and revshare. Fans will pull back on tips, subscriptions and Patreon support too. On the product side it gets worse: a 145% tariff on Chinese-made goods will make most creator-led product merch, gear and food impossibly expensive. Offshoring to Vietnam, Sri Lanka or Mexico? Also risky, as the rules are shifting too quickly to plan beyond 90 days.
- My Advice to Creators: Batten down the hatches. In a recessionary market cash is king – it’s time to re-evaluate your revenue mix to focus on driving short-term payments. Now’s not the time to expand staff, acquire new gear, or roll out an untested new product. Double down on existing sponsors and lock in long-term brand deals – even at a discount. Cut what’s not working – including new formats, underperforming employees and risky new videos. Lean into AI to scale yourself and save money on hiring, outside counsel and beyond.
- For Brands: Lock in creators to long-term deals now before the inevitable rebound from the coming crisis. And remember that creators outperform traditional media, particularly when budgets are tight. Be like Unilever and move more money into creators.
- For Managers, Agents and COOs: It’s time to have tough talks with your clients. Lessons from the 2008 recession/crash can be helpful as well. Sequoia famously advised its portfolio to spend each dollar as if it were your last, while Y-Combinator’s Paul Graham laid out the upside of starting now (for 2025 that means AI).
I’m hopeful the fallout will be mild, but it’s time to plan for a deep freeze. This is when strategy matters. Those who simplify, automate, and stay audience-first will be the ones still standing in 2027 and beyond.
A16Z, AGENTS AND AVATARS
Top venture firm A16Z just released a deep-dive on the state of AI Avatars. The report from @Justine Moore explores today’s state of the art, the challenges still to be overcome – including “phoneme to visemes” mapping — and predicts where and when things will improve. If you’re experimenting with AI-based creators, or want to clone yourself, it’s required reading.
She also explores how brands are eschewing real creators and actors to quickly deliver impactful Avatar commercials. But the embedded example commercial from Grok, alas, is still too uncanny valley for me. See if you can catch it blinking. Even if you don’t read the study (and you should), Moore highlights these hilarious videos from Neural Viz which cleverly illustrate what’s possible today.
OPEN AI TEAMS UP WITH NETFLIX
Netflix plans to use OpenAI to power search on its platform. Short-term good, long term I’m uneasy. If you think Meta or Google knows everything about you, they can’t hold a candle to Open AI. Their new memory capability, coupled with Netflix viewing behavior, should only feed the beast. Even more reason for having your own AI agent running locally that can tap into cloud services as needed. For creators, there’s potentially huge value. Imagine collabing with OpenAI to help identify audiences and subscribers most likely to enjoy our content or buy our courses, merch and more.
LEGAL PROTECTION FOR CREATORS
Props to the Creators Guild for coming up with a standard rider for creator/brand contracts that codify a series of principals to protect creators and their rights. It’s great to see some top influencer agencies signing on and supporting as well. It’s a good start, but I have a few concerns.
The 90-day payment term. I’ve heard from creators in the past that more than one of the signatories has been known to extend payments beyond that. In a world where net-30 ought to be SOP, we’re saying that 90-day is A-OK.
It’s for Guild members only – I get this, they want to build the guild. But none of the other lawyers I’ve contacted have seen the doc (apart from the first-page screen shot posted to LinkedIn), so it’s hard to know what’s going on under the hood.
Accreditation tracking is required via the Guild’s accreditation system – which non-coincidentally happens to be from a startup run by CGA founder Daniel Abas. I’ve been concerned about this apparent conflict of interest since early days, and this doesn’t do anything to allay those fears.
SPONSOR
Whalar Group’s Neil Waller explains to Fast Company how Creators have gone from fringe marketers to essential C-suite partners. As drivers of culture, commerce, and community, Creators are now shaping everything from product development to boardroom strategy, and brands that don’t adapt risk falling behind. Read more here: https://www.fastcompany.com/91311641/why-creators-are-now-a-boardroom-priority.
PLATFORMS
YOUTUBE
- Fast Food for Ears: In a blow to human musicians, YouTube launches a free AI-music tool for its creators. If video without music is like food without flavor, then I guess this is the McDonalds of soundtracking.
- Ban the Fake Bots: YouTube sees a through-line between ContentID and unauthorized digital replicas – and puts its weight behind the NO FAKES act to help stamp out unsanctioned clones. If only they felt the same way about musicians.
- AI and Creators: Fascinating conversation on AI and creators with YouTube’s creator liaison @Rene Ritchie, head of product @Amjad Hanif and journalist/creator @Cleo Abram.
META
- Ride Or Die: Meta’s anti-trust trial starts today, could result in the divestiture of WhatsApp and Instagram.
- Related? Former Trump administration official – along with Stripe CEO — added to Meta’s board
- Battle Lines Being Drawn: An influential group of Law Professors filed a brief supporting authors in their copyright battle with Meta AI. The EFF and other Profs have filed ones asking for a trial instead of a summary judgement.
- The Invisible Hand: Forget what Zuckerberg wants… Facebook is just Craigslist now.
- FINALLY! Instagram poised to release an iPad native version. My mini will never be the same.
- Testimony Bombshell: Meta preys on teen emotions to keep them doom scrolling.
- Search Improvements: Now that AI is killing search, Instagram decides to lean in.
- Bad AI: Meta’s new Llama models are being slammed by AI researchers. Perhaps optimizing for benchmarks rather than real-world performance and pivoting to compete with DeepSeek was a mistake?
TIKTOK
- Collateral Damage: As the trade war between the US and China intensifies, TikTok seems to be battening down the hatches, laying off staff and doling out cash to favored creators, while parent Bytedance makes all the news.
- China Digs In: Any deal for the US operations must comply with our technology export laws, insists China.
- Don’t Go! Double T feels the heat, offers even more money to creators to stick around via a new “Specialized Rewards Program”. Alas it’s invite only.
- Smart Glasses: TikTok parent Bytedance developing its own smart glasses and wants to compete with Meta.
- Bytedance AI: TikTok parent released fascinating new details on its upcoming “Seed-Thinking” AI model.
- TikTok As TV: A few weeks ago I predicted TikTok would be coming to the big screen. But if you believe Variety’s Andrew Wallenstein, it doesn’t have to – he’s already replaced the big glowing rectangle for his FYP.
- More Layoffs: This time in the ecommerce group.
QUIBIS
OTHER CREATOR ECONOMY
- Roblox Expands Ads: Advertisers can now buy “Rewarded Video Ads” programmatically through Google. This should translate to more revenue for creators building Roblox experiences.
- Activating Superfans: Former Spotify exec launches Belong, a new company focused on incenting fans to promote the content. For music first, but in success it would thrive in other parts of the creator economy.
- Marketing Sucks: A16Z VC @Andrew Chen talks about how every marketing channel sucks right now and lays out tactics for new companies to get attention. These also work for creators building new channels or launching new business lines. He misses the entrepreneur as creator (LI, TT, YT, IG, etc.) – another great way to market your new product.
- Snap School Sponsors: Education program now lets brands sponsor – congrats Brooke Berry!
- Doing Good? Mr. Beast slams big chocolate companies for their inhumane treatment of workers – especially kids. But one Africa expert says he’s doing it all wrong.
- Crazy Behavior: Mr Beast suing ex-employee for downloading confidential files and secretly recording meetings.
- Quibi Done Right: @Sara Wilson leans into the TikTok sensation Group Chat to riff on the expanding world of short-form episodic content done right. We’ve been talking about rise of these episodic platforms since 2022, most recently in March.
- Spotify Safe Spaces: @Ezra Cooperstein with a thought-provoking post about how Spotify has become a safer space for kids than YouTube – and creators are benefiting.
- Minecraft Movie: Great to see the power of fandoms permeating traditional media. And gaming too. Unfortunately, this probably means a flood of video-game related movies coming in 2026 and 2027 that will horribly disappoint.
- Media Disruptions: If you were in Dubai at the 1BF Summit, or follow this newsletter, you’ve seen @Doug Shapiro’s brilliant analysis of changes in the media business. But if you missed either, check out the video from his talk in London last month.
- CORRECTION – I had out of date information Linguana last week, turns out they DO let you pull out of monetization anytime (they cleaned up the FAQ to reflect that). Super interesting and looking forward to chatting with them at Open Sauce!
CREATOR TECH – AI, WEB3, VR, MORE
- AI Netflix Search: Netflix plans to use OpenAI to power search on its platform. Short-term good, long term I’m worried. If you thought Meta or Google knows everything about you, they can’t hold a candle to Open AI’s new memory, and Netflix viewing should only feed the beast. Hopefully the inverse will be true too for creators, where we can collab with OpenAI to help identify audiences and subscribers most likely to enjoy our content or buy our courses, merch and more.
- Buggy Whips for Automobiles: Google will link its AI summaries to its crappy SERPS (Search Results Pages). Destined to become yet another case study in how established companies fail to embrace new technologies targeting their core business and fail.
- 100 AI Trailblazers: Interesting look at 100 top AI trailblazers from old friend @Greg Kahn.
RESEARCH
- Be Real AI: In a new five-country study by Meta and Stanford, over 70% of participants supported using AI agents to help with real-life relationships—as long as the other person knows. Other key findings? Be transparent – and precision is more important than speed.
- The Eye of the Beholder: @Dan Frommer’s latest “New Consumer” research leans into beauty. He found that Gen Z is powering a surge in beauty spending, with TikTok Shop already rivaling Ulta and Sephora in sales. Fragrance, lip oils, and “glass skin” aesthetics dominate, but consumers are still focused on individual ingredients. And no surprise, AI-driven video is changing marketing and sales. The study is legit and there’s much more inside.
- Building Success in Africa: Creator Economy expert @David Adeleke analyzes new research from the EU-backed CREA Fund in his latest must-read Africa-focused newsletter. The study profiles 12 African creative companies that are not only surviving, but scaling. The playbook? Go global early, diversify revenue fast, and don’t wait around for the ecosystem to catch up. View the research directly here.
Where’s Jim? First off, all the em-dashes are my own. Second, I’m gearing up for Phish in San Francisco, some down-time in Napa and then hosting the content stage at Web Summit in Vancouver – but not in that order.
Also had a great time co-producing Creator Lab at NABShow last week – check out my recap here.
100% written by me – no human or AI ghostwriters were involved in the production (except for the cover art!).
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I’ve built and sold multiple creator economy startups to top media companies – including Discovery and Paramount. Subscribe here on LinkedIn to get this newsletter every Monday.
Let me know what you think – email me at jim@louderback.com. Thanks for reading and see you around the internet.
