{"id":135,"date":"2025-06-13T13:24:22","date_gmt":"2025-06-13T17:24:22","guid":{"rendered":"https:\/\/people.bsu.edu\/econbriefs\/?p=135"},"modified":"2025-06-13T13:24:22","modified_gmt":"2025-06-13T17:24:22","slug":"content-creation-isnt-a-gold-mine-for-most-by-dr-cecil-bohanon-and-dr-john-horowitz","status":"publish","type":"post","link":"https:\/\/people.bsu.edu\/econbriefs\/2025\/06\/13\/content-creation-isnt-a-gold-mine-for-most-by-dr-cecil-bohanon-and-dr-john-horowitz\/","title":{"rendered":"Content Creation Isn&#8217;t a Gold Mine for Most \u2013 by Dr. Cecil Bohanon and Dr. John Horowitz"},"content":{"rendered":"<p><span data-contrast=\"none\">One of the more powerful and underappreciated economic insights is that for any market activity, excess profits tend to zero in the long run as long as there is freedom of entry. The implications for both resource allocation and income distribution are profound. Suppose wearing red hats becomes fashionable and the price of red hats rises. The merchant lucky or prescient enough to have stocked up on red hats, or the factory that makes red hats will, in the short run, make more profits than usual. However, other suppliers and producers will enter the market, bringing more red hats to consumers and lowering prices until there are no more excess profits. Of course, once we read about the red hat fashion in the newspaper, it is probably too late to cash in.\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:10,&quot;335559731&quot;:716,&quot;335559739&quot;:3,&quot;335559740&quot;:241,&quot;335559991&quot;:10}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">According to a<\/span> <a href=\"https:\/\/www.goldmansachs.com\/intelligence\/pages\/the-creator-economy-could-approach-half-a-trillion-dollars-by-2027.html\"><span data-contrast=\"none\">Goldman Sach<\/span><\/a><a href=\"https:\/\/www.goldmansachs.com\/intelligence\/pages\/the-creator-economy-could-approach-half-a-trillion-dollars-by-2027.html\"><span data-contrast=\"none\">s<\/span><\/a> <a href=\"https:\/\/www.goldmansachs.com\/intelligence\/pages\/the-creator-economy-could-approach-half-a-trillion-dollars-by-2027.html\"><span data-contrast=\"none\">r<\/span><\/a><span data-contrast=\"none\">eport, there are fifty million income earning online content creators, and the expect number is expected to increase. Successful content creators garner viewers and followers in the millions. Having a large captive audience attracts paying advertisers who support the content creators. The same business model has driven newspaper, magazine, radio, and television publishing. The <\/span><a href=\"https:\/\/www.goldmansachs.com\/intelligence\/pages\/the-creator-economy-could-approach-half-a-trillion-dollars-by-2027.html\"><span data-contrast=\"none\">Goldman Sach<\/span><\/a><a href=\"https:\/\/www.goldmansachs.com\/intelligence\/pages\/the-creator-economy-could-approach-half-a-trillion-dollars-by-2027.html\"><span data-contrast=\"none\">s<\/span><\/a> <a href=\"https:\/\/www.goldmansachs.com\/intelligence\/pages\/the-creator-economy-could-approach-half-a-trillion-dollars-by-2027.html\"><span data-contrast=\"none\">s<\/span><\/a><span data-contrast=\"none\">tudy indicates that over 68% of internet content creators report that advertising is their largest source of revenue.\u00a0\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:716,&quot;335559739&quot;:3,&quot;335559740&quot;:241}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">A recent <\/span><a href=\"https:\/\/www.wsj.com\/tech\/social-media-influencers-arent-getting-richtheyre-barely-getting-by-71e0aad3?mod=Searchresults_pos1&amp;page=1\"><span data-contrast=\"none\">Wall Street Journal articl<\/span><\/a><a href=\"https:\/\/www.wsj.com\/tech\/social-media-influencers-arent-getting-richtheyre-barely-getting-by-71e0aad3?mod=Searchresults_pos1&amp;page=1\"><span data-contrast=\"none\">e<\/span><\/a> <a href=\"https:\/\/www.wsj.com\/tech\/social-media-influencers-arent-getting-richtheyre-barely-getting-by-71e0aad3?mod=Searchresults_pos1&amp;page=1\"><span data-contrast=\"none\">d<\/span><\/a><span data-contrast=\"none\">iscusses the experiences of some content creators who derive income from internet sites such as YouTube and TikTok. It can take years to build an audience, and content creators are under constant pressure to create new material.\u00a0 This &#8220;makes the job grueling.&#8221;\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:716,&quot;335559739&quot;:3,&quot;335559740&quot;:241}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">So, should aspiring college students with clever ideas jump on the bandwagon? Maybe, but according to the Goldman Sachs study, only about 4% of content creators earn $100,000 or more. Forty-eight percent make less than $15,000. Most earn less than the median earnings of US workers, $58k. Also, self-employed workers do not receive fringe benefits like health insurance and pay the full <\/span><a href=\"https:\/\/www.ssa.gov\/pubs\/EN-05-10022.pdf\"><span data-contrast=\"none\">15.3<\/span><\/a><a href=\"https:\/\/www.ssa.gov\/pubs\/EN-05-10022.pdf\"><span data-contrast=\"none\">%<\/span><\/a> <a href=\"https:\/\/www.ssa.gov\/pubs\/EN-05-10022.pdf\"><span data-contrast=\"none\">c<\/span><\/a><span data-contrast=\"none\">ombined Social Security and Medicare tax.\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:716,&quot;335559739&quot;:3,&quot;335559740&quot;:241}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Excess profits being competed away in the long run reminds us of the <\/span><a href=\"https:\/\/en.wikipedia.org\/wiki\/California_gold_rush#cite_note-StarrAvg-48\"><span data-contrast=\"none\">California Gold Rush<\/span><\/a><a href=\"https:\/\/en.wikipedia.org\/wiki\/California_gold_rush#cite_note-StarrAvg-48\"><span data-contrast=\"none\">,<\/span><\/a><span data-contrast=\"none\"> one of the largest movements of people in US history. In 1848, the first miners could earn several times the average laborer&#8217;s earnings. As more people entered the gold fields, excess profits were competed away, which is one reason Mark Twain famously said, &#8220;During the gold rush it\u2019s a good time to be in the pick and shovel business.&#8221;\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:716,&quot;335559739&quot;:3,&quot;335559740&quot;:241}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>One of the more powerful and underappreciated economic insights is that for any market activity, excess profits tend to zero in the long run as long as there is freedom of entry. The implications for both resource allocation and income distribution are profound. Suppose wearing red hats becomes fashionable and the price of red hats [&hellip;]<\/p>\n","protected":false},"author":112,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[462],"tags":[1291,1292,1296,1298,1299,1301,28,1293,270,1300,1297,1302,1295,1294],"class_list":["post-135","post","type-post","status-publish","format-standard","hentry","category-microeconomics","tag-content-creation","tag-creator-economy","tag-digital-economy","tag-economic-competition","tag-excess-profits","tag-gig-economy","tag-income-distribution","tag-internet-advertising","tag-labor-market","tag-long-run-equilibrium","tag-self-employment","tag-social-security-taxes","tag-tiktok","tag-youtube"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Content Creation Isn&#039;t a Gold Mine for Most \u2013 by Dr. Cecil Bohanon and Dr. John Horowitz - Econ Briefs<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/people.bsu.edu\/econbriefs\/2025\/06\/13\/content-creation-isnt-a-gold-mine-for-most-by-dr-cecil-bohanon-and-dr-john-horowitz\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Content Creation Isn&#039;t a Gold Mine for Most \u2013 by Dr. Cecil Bohanon and Dr. John Horowitz - Econ Briefs\" \/>\n<meta property=\"og:description\" content=\"One of the more powerful and underappreciated economic insights is that for any market activity, excess profits tend to zero in the long run as long as there is freedom of entry. 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