Can the creator economy stay afloat in a flood of AI slop?

Online creators and their business models were on our mind this week after mega-popular YouTuber MrBeast announced that his company is buying fintech startup Step, followed by Hollywood studios sending a flurry of cease-and-desist letters to ByteDance over the launch of its new video generation model Seedance 2.

Those seemingly unconnected headlines suggest a media landscape in the midst of transformative change, as popular YouTubers look to diversify their business models, with the threat and promise of increasingly powerful generative AI tools on the horizon.

On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Rebecca Bellan, and I debated what’s next for the creator economy, and whether there will be any room for the next generation of creators to stand out.

“What’s the next saturation point?” Kirsten wondered.

“Not all of these folks can go out and spin off products. So then does the pool of successful creators just simply get smaller? Or will something else happen, technologically speaking, or a different medium that will allow them to find an audience to make money off of?” You can read a preview of our conversation, edited for length and clarity, below. Anthony: [The news] led our colleague Lauren to do this great piece talking about the creator business model in general, and this sense that they aren’t just relying on ad revenue anymore.

I think it’s still a pretty big part of their business, but she broke down a number of the most popular YouTubers and noted that each of them is expanding — usually into e-commerce, but also into other revenue streams.

Beast, for example, actually has this line of food products, including chocolate, that is making hundreds of millions of dollars and it was actually profitable for him in 2024, whereas his media business was losing money.

All that was pretty wild to me.

Beast can’t be profitable with his media company, who can? To me, that was a stunning stat.

I am not surprised that the whole ad revenue biz game is not working out necessarily for creators and influencers because it’s just reached a saturation point.

I guess my big question is, what’s the next saturation point? Not all of these folks can go out and spin off products. So then does the pool of successful creators just simply get smaller? Or will something else happen, technologically speaking, or a different medium that will allow them to find an audience to make money off of?

Rebecca: It’s interesting, there’s a lot of ways you can think about what else could happen, right?

Maybe they’ll create digital twins of themselves and put their digital twins into a bunch of different situations that can make them [other kinds of] money.

But again, going back to this not being surprising, these people are now celebrities, right?

Someone told me on the phone recently that a lot of [the] younger generation, they don’t know our celebrities, they know TikTok celebrities.

And we’ve seen celebrities for years pass off products and make money off of them, right?

I used to watch Rachel [Ray], she was a celebrity chef and she sold her EVOO or her olive oil. We Slow Ventures on [Equity] sometime last year. They have a creator fund and basically what they’re doing is they’ve raised a VC fund to essentially back creators with their businesses, if they have maybe a niche following, maybe they’re really into woodworking and here’s their collection of chisels, I don’t know.

I think it’s an interesting path forward and it’s something that we see as journalists: How do we also try to be creators and make a brand of ourselves that we could diversify our revenue.

It sounds horrible to say it out loud like that.

Anthony: I’m smiling, but it’s the smile of somebody whose soul is slowly turning into ash inside.

So we took a break from talking about AI, but I will obligatorily bring AI back into the conversation.

Obviously one of the other related developments over the past week or so is that ByteDance, which is the Chinese company that launched TikTok and is still an investor — we won’t get into all of that — they launched a new version of their model, Seedance 2.

0, which at least initially was primarily only available to Chinese users.

But you started to see people posting videos generated by Seedance, including this viral video of Brad Pitt fighting Tom Cruise.

That prompted both this general conversation of: Is Hollywood doomed?

And then more concretely, a bunch of Hollywood studios, including Netflix, sending ByteDance letters being like, “You cannot do this, you’re basically allowing all your users to generate videos using all of our IP, all of our movie stars.

” And for a couple of days, there was no response at all from ByteDance, but then they did say, “Sorry, sorry, sorry, for some reason we launched this without any real guardrails, but we’re gonna do better in the future.

” Kirsten: So the timing of this is just perfect because I happen to be editing a story right now that Rebecca wrote.

It has nothing to do with Seedance, but it does have to do with AI and filmmaking.

So I’m going to give a future ]rops to Rebecca for being timely about that. Rebecca, I know you have a lot to say on that, besides that Hollywood is upset. Is it more complicated than that?

Rebecca: Yeah, definitely.

I mean, tying this back to the creators thing, I think that a lot of people are going to be using these tools to produce all kinds of content and we’re just going to be absolutely flooded.

And that’s going to be intense.

But when we talk about, whether it’s creating films or ads or just content in general using AI video tools, I think there’s this tension between one, this is going to produce a whole lot of low effort slop versus two, it could also democratize access for a lot of people who don’t have funds or budgets or teams to share a lot of the stories that they want to tell. And also, if you’re a small business and you want to create a little shampoo ad — to be on the nose about it, because there’s a shampoo ad that’s going viral — or you sell coffee and you want to make a little ad for it, [this] could give you the tools to do that. Is that a bad thing? Is it not a bad thing? Do we need more content in the world? There’s a few avenues to walk down. Kirsten: Is it a bad thing, Anthony? Anthony: In terms of the creator side of it, my general feeling is [that] the response to a lot of this kind of slop — frankly, a lot of it is slop, and I think that’s going to continue to be the case — is going to be this valuing of authenticity. And so there is the opportunity for these big creators is be less about the idea of like, “I have digital twins of myself,” but [instead,] “No, I’m the real Mr. Beast, not the digital simulacra wandering around. ” And I think it’s also telling that – of course, every social network has ups and downs, but that OpenAI’s Sora, from what I understand, had skyrocketed at the beginning and then has been struggling to hold on to users more recently, because there is a certain emptiness to the experience when you just feel like there’s not an authentic human being on the other side.

But I think it’s also going to make the landscape much more challenging, both for the established creators to monetize […] and then I think it’s going to be especially hard for new creators because there’s just going to be so much more stuff.

Trying to actually break out is going to become super difficult