Welcome to Negronis with Nord. In this episode of Negronis with Nord, James emphasizes the need for platform diversification due to the TikTok ban threat and Meta's decision to stop paying creators bonuses for their reels. He also shares tips for alternate revenue streams. and gives his insights on this year's Oscars.
Navigating a potential banking crisis, among other things…
James: Welcome, Negronis with Nord. Episode 50. What's this? 50? Oh, sh** sorry. Episode number 52.
Welcome, everyone. It has been a long week so far. I had the distinct pleasure of spending the weekend navigating a potential banking crisis. I assume and hope that the US government will end the fear surrounding what is going on in the banking sector. Although last week, I saw that Credit Suisse was having some trouble. In Europe, we are seeing some of that. Meta is going to lay off another 10,000 people. We see these companies pulling back and focusing on their core businesses. Just this week, Meta shut down the NFT.
NFT Digital Collectibles product program that they had. This is after they've already, you know, walked away from shopping, affiliate several other products that they were working on. Not to mention Metaverse, but to focus on creators.
NFTs, which I always thought were complete and utter ********. Basically, they were seen as a place where creators could maybe make some more money and where they could have non-advertising-fueled income. Instagram launching an easy way to sell, collect and store. NFTs were seen as a big step in this. So, rolling that back is I think a sign of, you know, where Facebook's, I'm not gonna call them meta because it's a stupid name. They should have never changed it. Where Facebook focuses right now and for creators, you know, I think the ways in which you can make money are focusing and narrowing a little bit.
Facebook also rolled back the program, where they will pay you to post Reels. So for the last year or so, every time you ******* log into Instagram, it's saying, earn money by posting Reels, right? And they were paying out bonuses for you to post Reels, trying to get people to switch from creating static content to uploading more TikTok-like video content onto the platform. They have stopped that program. And again, I think some of this is the economy shifting slightly. Some of this is interest rates rising.
Why is that important for creators? Again, if, if you go back a couple of years ago when interest rates were effectively zero, that meant companies like Meta could borrow money for free, saying, Hey, we're gonna give $5 billion away to creators. And pay them to use Reels was not a big deal because they could get that money for free. Now, it would cost $250 million a year to borrow that money. Much more expensive. It is why a lot of companies are kind of pulling back on some of these more experimental, future-facing projects and really focusing on their core businesses.
Why influencers should consider alternate revenue streams
And for influencers, I think you have to do the same, right?
Over the last few years, we have talked a lot about alternative revenue streams. You know, we have had a lot of these things come and go.
We thought that influencers selling subscriptions, Substack, Only Fans, but then Instagram subscriptions were gonna be a way to supplement your advertising revenue. That's proven really difficult to build a sustainable base of people who are willing to pay you.
NFTs, that hasn't really worked out.
The shopping and affiliate programs inside Instagram aren't working out.
TikTok walking away from their Shopify integration, walking away from their live selling products.
Influencer brands have been struggling. You know, there was a huge amount of people that started companies, big influencers, and some of those have worked out spectacularly. Many more of them have failed.
So I think for influencers, as companies are focusing and they are thinking about what is their core business as you do as well, it is clear that certainly for the next couple of years, the main source of revenue for creators is gonna continue to be brand deals. And so that means you need to focus on maintaining a healthy relationship with your audience. As we say, every single week, that audience is your key to being able to monetize it is the thing that you are selling is access to that audience. So, you know, you should be spending every day focused on how do I strengthen and improve the relationship with that audience even more than how do I grow that audience. There is no silver bullet here. There's not gonna be anything that, that replaces that revenue stream in the short term. Longer term, I do think there are things influencers can do to hedge, you know, having multiple platforms, right?
How can creators prepare for a potential TikTok ban?
That's really important with the news right now that the US is once again going to ask TikTok to either split and sell from Byte Dance and sell their US operations or face being shut down. I predicted in the predictions episode that we did with Phoebe, I predicted that this might be something that happens.
So it brings me no joy to be right about this. I don't know exactly what is going to happen. Years ago, the Trump administration said something similar to TikTok. They looked at divesting. I know Oracle was, was considering purchasing it and maybe like Accenture or something, which is kinda strange, but the company is massively more valuable than it was three or four years ago. I don't even know what the number would be. I don't know if Byte Dance would be willing to sell it.
We don't feel great about TikTok potentially being shut down. This is also a little bit of, 'f*ck around and find out' situation.
TikTok has been caught spying on Americans using TikTok to spy on American citizens. And a few other things that are a little concerning. I fear it is being politicized and it's gonna be turned into a kind of like stand against China, and it's no longer going to be about TikTok, but going to be about our increasingly complex relationship with China and the Chinese government.So look, all's that to say it's important to ensure that you hedge and are spreading that following across multiple platforms. If you're a TikTok first creator and haven't put much time into Instagram, I would focus on that.
No single point of failure
There is still a 50-50 chance they just ban it. It may never come back. So if you know your livelihood is built on TikTok, I would make sure to get onto another platform and try to transfer some of that following as quickly as you can. We've talked about newsletters, we've talked about starting blogs. You know, a number of ways to try and take ownership over your audience and make sure that you don't have a single point of failure. This is something we talk about in Business all the time, is, is looking at what are my points of failure.
Basically, if one thing goes terribly wrong, how much does that affect me? TikTok is banned, and your whole business is over, right? You have a single point of failure that's really scary as a business owner, as somebody making a living to have one thing that your entire livelihood depends on. And so it is up to you, to try and hedge that, and spread that about so that you have multiple points of failure so you are never completely dependent on just one thing.