As the Passion Economy grows, more people are monetizing what they love. The global adoption of social platforms like Facebook and YouTube, the mainstreaming of the influencer model, and the rise of new creator tools has shifted the threshold for success. We believe that creators need to amass only 100 True Fans paying them $1,000 a year.
Sound unlikely? On Patreon, the average initial pledge amount has increased 22 per cent over the past two years. Since 2017, the share of new patrons paying more than $100 per month—or $1,200 per year—has grown 21 per cent. On the online course platform Podia, the number of creators earning more than $1,000 in a month is growing by 20 per cent each month, while the average number of customers per creator is growing at a rate of 10 percent. Likewise, on Teachable, the average price point per class offering has risen roughly by 20 per cent, year over year. In 2019, nearly 500 teachable course creators made more than $100,000; of those, 25 averaged more than $1,000 per sale.
Here’s how it works:
A creator can cultivate a large, free audience on horizontal social platforms or through an email list. He or she can then convert some of those users to patrons and subscribers. The creator can then leverage some of those buyers to higher-value purchases, such as extra content, exclusive access, or direct interaction with the creator.
The recipe for earning $1,000 per fan
To gain fans who are willing to pay $1000 a year – no small sum- creators need to offer a step-function increase in value. The receipt, then, is to go niche and tap into users’ desire for results. Practically, what does that look like? It means providing differentiated content, community, accountability, and access.
- Premium content and community that has no close substitutes
- Delivering tangible value and results
- Access, recognition and status
Premium content and community with no close substitutes
People are willing to pay high prices for exclusive, differentiated content and access to a network of like-minded individuals. In late 2019, two financial advisors-turned-podcasters launched a private, paid community called Advisor Growth Community (powered by the platform Mighty Networks). The online hub charges financial advisors $2,000 per year to collaborate with colleagues and learn how to grow their practices. It currently has nearly 100 members in its ranks. Frequently, premium content and community are bundled together to enhance the student experience by providing valuable social reinforcement and support.
Delivering tangible value and results
In China, the unicorn audio course platform Dedao sells paid audio courses that appeal to users’ desire for self-improvement and lifelong learning. The best selling topics include management, study skills, and public speaking. These classes can reach up to 199 RMB (approximately $28 USD)—a meaningful sum in a country where the average income is 21,600 RMB (~$3,100 USD). The most popular course is taught by former Peking University professor Xue Zhaofeng and has over 470,000 subscribers.
While the US podcasting industry is still modestly monetized through advertising, the flourishing ecosystem of paid meditation and audio wellness apps like Headspace, Calm, and Aaptiv—all of which charge subscribers directly—indicate that users are willing to pay for content that tangibly affects their well-being.
The more a student pays upfront, the more invested he or she is in achieving the desired outcome. Higher-priced creators don’t only offer more or better content, they also motivate and incentivize students to get what they paid for.
Access, recognition, and status
On Patreon, the comedy podcast This Might Get Weird has $5 per month and $15 per month tiers, both of which afford access to a discord community and extra content. The creator also offers a limited $69 per month ($828 per year)subscriptions, which provides a monthly, 30-minute livestream, among other benefits. But the highest-priced offering is a $500 per month ($6,000 per year) tier, which grants users personal coaching sessions with the podcast hosts, via video chat, every 3 months. The top tier offers a level of exclusivity and access that matches the price—100 times more expensive than the base tier.
Twitch streamers can rake in hundreds of thousands of dollars a year from donations and tips—in one recent case, a streamer received a $75,000 tip. The personalized shoutouts from the streamer, recognition, and elevated social status that such donations afford to lead to higher levels of spending. It’s worth noting that limited access and recognition are unscalable. To some extent, people are, by definition, paying high amounts to gain exclusive access or elevate their status above other users.