The creator economy grows in Latin America and creates opportunities for the EU
Just over a decade ago, an emerging economic sector began driving the democratization of knowledge and fostering social inclusion. Moreover, it presents significant opportunities for strengthening ties between the EU, primarily Spain and Portugal, and Latin America, as well as to generate significant revenues. We call this the “creator economy”, the economy of content creators.
It began almost twenty years ago with the emergence of social networks. Since its inception, people no longer depend on geographic proximity to meet, connect, and engage with people and subjects of their interest. We are now living in a so-called “global village,” limited only by language barriers. However, given the global presence of over 500 million Spanish speakers and 260 million Portuguese speakers, opportunities have greatly expanded.
Advances in technology, rapid internet access and the increased use of cell phones have expanded the possibilities of connection, now including voice and video communication, in addition to the original medium, text. Over time, individuals came to realize that they had the power of media literally in their hands, with tools similar to radio, television or newspapers, and that they could use them to share stories and express opinions freely and independently. In addition, content creators saw how people who didn’t even know them were interested in their style or message and started following them and interacting with their posts and creating their own communities. It was the beginning of what we call the influence of networks.
Content creators saw how people were interested in their style or message and started following them and interacting with their posts and creating their own communities
The global phenomenon of social networks has been widely embraced in Latin America. According to 2021 GWI data, the region is the largest global consumer of media, with more than 14 hours of consumption per day, spending three and a half hours on social media. Approximately 85 % of the region’s population has Internet connectivity. With so much exposure and audience, it was natural to migrate from traditional advertising to this environment, leveraging the scalable audience targeting opportunities enabled by technology. However, at this point, consumers had the freedom to choose the messages they were exposed to and who to trust, particularly regarding purchase recommendations. Moreover, in most cases, they tend to trust individuals more than brands and traditional media. Statista’s 2021 Global Consumer Survey Report notes that 41 % of Brazilians, 29 % of Mexicans and 20 % of Colombians have already purchased products recommended by influencers.
Driven by so much interest and opportunity, these personalities are multiplying all over the world. According to estimates from consulting firm Signal Fire, there are around 50 million influencers in the world, and two million of them are considered full-time professionals. Some of the others, even amateurs, manage to generate part of their income through this activity. In addition, 77 % of influencers generate their revenue through agreements with brands, mainly through sponsored publications.
However, the greatest opportunities are for the 12 % who monetize their content directly with their audience. How do they do it? Selling physical products under their own brand, working as partner distributors of physical or digital products for commission, with audience contributions and donations and selling online content or courses directly to their audience. This category extends beyond the activities of a “simple influencer” to those of a professional who engages directly with their followers to sell their products. In today’s vernacular, these people have become content creators. They are also entrepreneurs, managing aspects other than content, such as sales strategy, product range, pricing and customer service. Creators now have greater control over their own data and the data of their audience. They no longer rely on social media algorithms or uncertain brand campaigns for revenue. To achieve this, they seek assistance from specialized companies to help them manage their business. One prominent example is Hotmart, a global platform boasting over 135 000 customers and having surpassed US$1 billion in sales. Founded in Brazil in 2011, the company moved its headquarters to Amsterdam in The Netherlands when it began its international expansion and opened its first international office in Spain in 2016. The company expanded to Colombia in 2017, and to Mexico in 2018. Since then, Spanish-speaking customers have been the source of significant growth, and more than 50 % of their sales are made to foreign countries, setting their rates and payments in dollars or euros, thus transforming the lives of many of these entrepreneurs.
There are many examples of highly successful creators, including Spanish photographer Kike Arnaiz, who specializes in travel photography. With 340 000 followers on Instagram as @kikearnaiz, he has sold his knowledge to over 10 thousand students, many in Latin America. Colombian Andrés Franklin teaches English as a second language and has sold 2 000 courses in 16 different countries. At the same time, he has fulfilled his dream of living in the United States, where he runs his business. The @andreseningles channel has more than 650,000 subscribers on YouTube and reaches more than 2 million people on TikTok.
There is significant demand for online skills in various niches of the creator economy, allowing individuals, even those with a small social media audience, to participate in the niches of finance, fitness, languages, digital marketing, aesthetics and gastronomy, among others. Creators from the EU who have differentiated, high-value content can, regardless of their native language, sell worldwide, and even focus on Latin America where demand has grown 70 % per year since 2018. It is estimated that the creator economy already moves more than 100 billion US dollars a year globally, and, according to Goldman Sachs, it could double in size by 2027.