How To Make Money From Social Media

Ajey Nagar has 47.4 million followers on YouTube across two channels and another 15.9 million on Instagram. He publishes roasting videos, comedy sketches (a series of short, amusing scenes or vignettes), and live streams. Entertainment video maker Faisal Shaikh has 58 million followers on Josh and another 28 million on Instagram.

The duo are just a handful of nearly 50 million creators on global platforms such as YouTube and Instagram Reels and new homegrown platforms such as Josh, Moj and Chingari who make a living out of social media. They have endeared themselves to vast audiences by turning their skills at dancing, singing, acting, motivational talk, and even education, into lucrative economic opportunities.

It is a major non-metro phenomenon. On Moj, Arishfa Khan, with 13 million followers, is a native of Shahjahanpur in Uttar Pradesh. Divya Upadhay, who creates content around romance and heartbreak, and has 9.2 million followers, hails from Indore. Almost 300 kilometres away in Gairatganj, Himanshu Srivastava, whose staple genre is dance, has garnered 5.3 million followers, while Ambala’s Amit Sobti, a specialist in comedy videos, boasts of 2.4 million. In fact, 60-65% users of Indian video platforms live in Tier-II cities. Among the global ones, YouTube’s share of Tier-II cities stands at 40-45%, while for Instagram it is 30-35%.

Besides YouTube and Instagram Reels, they are being powered by the growing popularity of local video platforms. Of the estimated 448 million-plus social media users in the country, at least 160 million have used one of the local platforms such as Josh, Moj and Chingari. According to estimates by RedSeer Consulting, these apps together have four times more creators than China-based TikTok.

The Economics

Analysts at business research and market intelligence firm PGA Labs peg the local creator ecosystem at $300-400 million, with a potential to reach $4 billion by FY26. Digital marketing company Dentsu International puts the domestic market around $200 million. In comparison, the global creator economy stands at around $104 billion, according to Dentsu.

But it’s the fast-expanding economic opportunities that have set the buzzers in the ecosystem. In the past, creator income depended heavily on revenue share from platforms. Not anymore. New revenue streams are opening up income potential — at least for top creators.

Ad monetisation, live commerce, influencer marketing, shoppable commerce, paid partnerships, personal merchandise, virtual gifting and the newest — non-fungible tokens (NFTs) — are just some of the emerging income models that have gained traction to make creators a self-sustaining ecosystem by itself. Top creators such as Ashish Chanchlani, Ajey Nagar aka CarryMinati and Bhuvan Bam are estimated to earn anywhere between ₹8 and ₹15 crore annually.

The industry has already grabbed investor eyeballs — over $2 billion in venture capital (VC) funding went into sectoral start-ups between 2018 and 2021, with nearly 75% coming in 2021 alone, according to Kalaari Capital. And unlike most other sectors, the pandemic didn’t play spoilsport. Earlier this year, investors shrugged off macroeconomic uncertainty to back Josh parent VerSe Innovation with $805 million in funding at a valuation of $5 billion, the biggest start-up funding deal so far this year.

So, how do creators make money from social media?

Dharavi boy Adnaan Shaikh was crestfallen when an overnight directive by the government in June 2020 put TikTok out of business in India. Shaikh, who had been posting video content on the Chinese short video app since 2016, had garnered some 14-15 million followers on TikTok. He also posted videos on Facebook, YouTube and Instagram, featuring bike stunts and roles from inter-college competitions. But the TikTok setback is now history.

Today, Shaikh is an exclusive content creator with Josh across genres, including dance and fitness. The 27-year-old, who has over 20 million followers on the platform, tries new things to diversify his content slate. He not just gets the bulk of his earnings from platform associations — where platforms pay creators upfront for creating a certain number of videos — but also monetises his content by collaborating with brands such as Amazon and TVS Motor. “Today, I earn so much that I have shifted my family from Dharavi,” says Shaikh, whose popularity has fetched him opportunities to participate in music videos, adding to his revenue streams.

Be it Shaikh, or Payal Dhare, who turned a full-time YouTuber after graduation, or mass comm graduate Sana Sultan Khan, whose skills at creating content fetched her roles in Indian music videos, scores have found a footing in India’s bustling social media creator ecosystem.

Although the number of macro or big creators (those with more than one million followers) is still small — a low single-digit percentage, according to analysts — the segment has still carved out specific niches: Be it Ranveer Allahbadia in the fitness and motivation space with 11.9 million followers across YouTube and Instagram or Bhuvan Bam in the comedy and entertainment space with 25.5 million subscribers on YouTube.

Changes in consumer behaviour are behind the rise of the creator economy, say analysts at Kalaari Capital. “Consumption patterns of Indians have evolved. They want to follow people they identify with and consume products that showcase their individuality,” they add. This has led to a shift in power, with companies chasing individual creators, instead of the other way round.

“Video has become a way of carrying-forward stories,” says Ajay Vidyasagar, regional director, APAC at YouTube partnerships. In a young country led by Gen Z and millennials who use smartphones to socialise, interact and thrive on the app economy, what better way to reach them than through digital videos? And when the videos feature influencers like a 21-year-old Payal Dhare or 26-year-old Nischay Malhan, who form a part of their own culture and milieu, the messaging bears credibility. “My followers are from the 18-24 years age group. I plan to get into personal blogs as people want to know about my personal life,” says Dhare, who makes gaming content and has over two million followers on YouTube.

“People need not travel to Bollywood studios to create videos. They can do it while practising yoga or dancing, using editing tools like filters that we provide them with,” says VerSe Innovation founder Virendra Gupta.

The numbers speak for themselves. According to a recent report by independent consulting firm Oxford Economics, YouTube’s creator ecosystem contributed ₹6,800 crore to India’s GDP in 2020, supporting nearly 6.83 lakh full-time equivalent jobs. It includes profits and earnings of creators, money spent by them on goods and services in their supply chain while producing content and off-platform revenues such as brand partnerships resulting from their association with YouTube.

Credit, however, goes to TikTok for giving birth to the local creator ecosystem and taking short video consumption to the hinterlands, says Umang Bedi, co-founder, VerSe Innovation. “TikTok started the revolution of focusing on creators when it came to short-form videos.”

The Stars

A bunch of creators have carved out a space for themselves in the ecosystem, with millions of followers.

Ajey Nagar’s primary YouTube channel currently has 36.2 million subscribers. His Instagram page has another 15.9 million followers. Nagar is touted as Asia’s leading YouTuber (in terms of followers). His brand association covers companies like HP and ASUS India, and he is currently the digital brand ambassador of gaming platform WinZO and the ambassador of Arctic Fox India. “In contrast to the consumer economy, where customers just bought what was offered through mass media and marketeers, the creator economy has enabled individuals like me to participate, interact and add value to the whole blockchain,” says Nagar.

Digital content creator Ashish Chanchlani, who specialises in comedy and entertainment, has 28.5 million subscribers on YouTube. In 2018, Chanchlani tied up with Bollywood star Akshay Kumar ahead of the release of the latter’s sports flick Gold. He was invited for the promotion of Rohit Shetty’s Sooryavanshi last year. He also represented India at the premiere of American superhero movies Avengers Endgame and Spiderman: No Way Home. His recent brand collaborations have been with companies such as Airtel, Dream11, Netflix and Amazon.

Bhuvan Bam launched his YouTube channel BB Ki Vines in 2015 and became a rage online for his funny videos. The channel currently has 25.5 million subscribers. Bam is among the first independent creators to cross 10 million subscribers on the platform. He has around 14.7 million followers on Instagram, and has also starred in a short film, Plus Minus, which earned him a Filmfare award. His situational comedy show, Dhindora, hosted by YouTube, became the first limited Indian web series to clock half a billion views on the platform. The brand ambassador of The Man Company has also partnered with the likes of Dubai Tourism, NBA and the Manchester Football Club.

Faisal Shaikh is among the country’s top influencers with 58 million followers on Josh and 28 million on Instagram. He focuses on entertainment videos. “Content creators now play an important role in driving messages and telling stories,” says Shaikh, who has tie-ups with Voot, Polycab and trading platform Binomo, among others.

YouTuber Gaurav Taneja, popularly known as Flying Beast, forayed into the space with a fitness channel in 2017. Today, he has around 11.1 million followers on the platform across three channels, with brand tie-ups, including Nestle, Samsung, Realme, Gillette and Beardo. Taneja curates content around fitness, lifestyle and travel. Besides, he shares his daily life experiences through his videos. “New-age firms have allocated 100% of their marketing budgets to influencer marketing. Big brands are gradually taking to the idea as well,” says Taneja.

Agrees Amit Bhadana, who has garnered 32.9 million followers across YouTube and Instagram via comedy and entertainment videos. “It is the beginning. In the coming decade, the creator economy will create many more jobs.”

Besides Taneja, another popular creator in the fitness and motivation space is Ranveer Allahbadia. He runs eight YouTube channels and has a subscriber base of 10 million. His Instagram handle beerbiceps has 1.9 million followers. The first independent creator in the country to be associated with Spotify for his exclusive podcast, The Ranveer Show, Allahbadia has partnered with brands such as Skoda and WOW Skin Science.

In fashion/lifestyle, Masoom Minawala is one of the few creators from India to have walked the red carpet at Cannes Film Festival thrice in a row for L’Oreal Paris and attended the Paris Fashion Week multiple times exclusively for luxury brands, including Louis Vuitton and Christian Louboutin. “The creator economy has given me a platform to transform my goals into initiatives that are actually close to my heart,” says Minawala.

The list is never ending, and the space ever expanding. A host of new creators, including Niharika N.M. and Kusha Kapila are already making waves. Niharika, who has 4.45 million followers across YouTube and Instagram, is the first creator to collaborate with Southern superstars Yash, Mahesh Babu, Prateek Kuhad and Siddharth, and mark their debut on Reels. She has also tied up with Bollywood actors Ranbir Kapoor, Ajay Devgn and Shahid Kapoor to name a few. Her video starring Mahesh Babu and Sesh Adivi has been viewed more than 32 million times on Instagram. Her reels receive 6-8 million views on an average. Niharika’s brand collaborations include companies like Myntra and Netflix. Delhi girl Kusha Kapila, an active Instagrammer, will be seen in Netflix series Masaba Masaba Season 2. She has also been actively working with brands like Olay India.

Making Money

Creator economy is not only about glitz and glamour. In a space that is adding hundreds every day, entry barriers are minimal, and affordable smartphones have made accessibility fairly easy, deepening competition.

Monetising content is, therefore, no child’s play. In fact, Kalaari Capital estimates that only 1,50,000 professional content creators in India are able to monetise their services effectively. Macro creators often get paid more for regular content they create for short video platforms due to the sheer extent of their reach, while the not so well known ones earn around ₹10,000 per month, say experts.

With deep-pocketed investors on board, short-video platforms are rolling out different monetisation models to maximise creators’ earning potential.

Brand endorsements in paid partnerships: The most lucrative model is often in collaboration with a group of influencers who promote a product in a mini web series or other long-format category by prominently displaying them through the course of the video. Standalone collaboration is preferred only when the creator is big, says Praneet Singhal, associate director at PGA Labs. For example, in one of the Season 2 episodes of Dice Media’s mini-web series Operation MBBS available on YouTube, a local brand’s grooming product for women was featured visibly. High Street Essentials (HSE), the parent company of women’s fashion brands FabAlley and Indya, often taps creators to promote giveaway campaigns. “For brands like us which derive 50% of their business from online channels and acquire 70% of customers online, collaborations with influencers help in building credibility. If one were to see a FabAlley ad on Facebook versus hearing about the brand from a Category A fashion influencer like Masoom Minawala, it would make a massive difference in terms of perception of the brand credibility,” says co-founder and CEO Shivani Poddar. For micro and nano creators, the partnership can be in the form of a barter system where the brand gives creators their products in exchange for deliverables.

While popular creators can earn ₹70-75 lakh a month depending on the nature of the deal, category A influencers can lock up a few long-term brand deals of say ₹1-2 crore each. At times, they are package deals, entailing collaboration across platforms — for instance, brands pay creators for a deal involving endorsements on Instagram by way of a video reel or a story on YouTube and through a post on LinkedIn, explains Viraj Sheth, CEO and co-founder at influencer marketing and talent management agency Monk Entertainment.

Ad monetisation: This model is leveraged by YouTube, Chingari and Josh to incentivise creators, who get a share of the revenue from every ad viewed by users through the course of the video. It is often referred to as the cost per view (CPV) model, explains Aayush Tiwari, vice president, talent management and music business, Monk Entertainment, which works with top creators such as Niharika N.M. “For every ad watched, there’s a relative fee. At the end of the month, creators are paid the total amount monetised via ads for their videos,” adds Tiwari. While YouTube shares around 55% of its ad revenues with creators, Chingari gives around 30%. Josh’s ad revenue share depends on the brand and the reach of the creator.

Popular creators earn anywhere between ₹20 lakh and ₹40 lakh a month through YouTube ads, says Sheth. These are influencers whose videos net 20-40 million views per month. Brands place YouTube ads typically incorporated in between the content streamed on the channels of various creators. D2C brand Bombay Shaving Company, for instance, taps into this mode of marketing at times. “We usually run YouTube ads in an influencer’s general content,” says Deepak Gupta, COO, Bombay Shaving Company. “In terms of longevity, YouTube influencers work the best for us as the content stays there for a longer time.”

Live commerce: This model allows influencers to endorse branded products. Followers can make real-time purchases by clicking on the ‘buy now’ option embedded within the video. Influencers get paid by brands. While macro creators usually go for fixed payment, micro creators are often paid in kind, or through voucher-based commission where the influencer shares a coupon code on her page, and depending on the number of purchases, the brand pays a commission to the creator. “Mega creators may sometimes charge over ₹1 lakh for posting five live streams,” says PGA Labs’ Singhal.

Online fashion giant Myntra often ropes in influencers to host live shopping events on its own live commerce app Myntra Live. “Myntra has a deeply integrated strategy towards collaborating with the thriving creator ecosystem across use cases such as a buzz building for our marquee events and campaigns on social media,” says Pragya Priyali, director, social commerce, Myntra.

Platforms have developed their own ways of monetising using this model. They make money by charging a commission each time a product is sold. Moj has partnered with Flipkart to drive its live commerce strategy. Influencers can choose products they wish to endorse on Flipkart’s marketplace. Users keen to buy them are directed to the e-tailer’s website via a link placed within the video. The e-commerce giant recently launched #SelfcarewithFlipkart wherein it leveraged an expansive network of influencers — five prominent creators across segments were roped in to promote certain products and a link to the Flipkart website was embedded within the video to enable users to make purchases. “Working with influencers helps us in connecting with the right audience,” says Kanchan Mishra, senior director, consumables (FMCG), general merchandise and home, Flipkart.

India’s live commerce market stood at $150 million in FY22, according to PGA Labs. Analysts estimate the gross merchandise value (GMV) of live commerce through short videos to touch $5 billion by FY27. Big creators, however, do not usually engage in live commerce. Small to mid-sized creators typically subscribe to this model, which is often characterised by bulk deals wherein creators can get up to ₹2,000-15,000 for a long-term deal, says Sheth of Monk Entertainment.

Influencer marketing: “Brands operating in the lifestyle, electronics segments and digital economy are showing a keen interest to rope in influencers for promotion,” says Shashank Shekhar, senior director, content strategy and operations, Moj & ShareChat. Moj runs an influencer marketplace connecting brands with influencers. The marketplace features cost slabs detailing the amount influencers charge brands on a per video basis. Moj’s influencer marketing model has been leveraged by a diverse set of companies, including Amazon, Disney India, Airtel, Dabur, ITC, Zivame, Ponds and SBI. The amount depends on the size of the brand and scale of the campaign, and can vary from ₹10,000 to ₹2 lakh per video, says Shekhar. “As and when creators’ base of followers expands, their price increases,” he adds. The platform gets a commission for every campaign it facilitates. Josh is also planning to launch an influencer marketplace soon.

Influencer marketing is one of the most popular forms of monetisation. Around 77% of creators depend on brand deals for revenues. PGA Labs estimates India’s influencer marketing business to have touched $120 million in FY22, with a potential to reach $450 million by FY27. However, influencer marketing is not always transaction driven. “For a brand, it is not always about activating paid collaborations with these influencers. Sometimes we may just want to interact with them and have them post about a campaign organically if they believe in the concept,” a PepsiCo India spokesperson said.

Shoppable commerce: Still under experimentation, shoppable commerce will leverage the behavioural trend of consumers. Users will be shown suggestions of shoppable items an influencer wears through the course of the video, and will be directed to the links of e-commerce marketplaces selling the product. Josh is experimenting with this model and plans to launch it soon. “Users want to engage with content when they shop. When they engage with videos on Josh, we want to isolate objects and suggest shopping nudges. That’s where the market will expand and we will have a larger role to play,” says Gupta.

Cashing in on Tech

For tech-led companies, innovation is the mantra, which includes monetisation as well. Firms have introduced a set of mechanisms to help creators make money.

Merchandise: This feature allows creators to showcase merchandise crafted by them on various channels, helping them reach a wide audience. Bhuvan Bam launched his everyday streetwear brand, Youthiapa, through YouTube’s merchandise feature, ‘Merch Shelf’, in 2017. Today, more than 20.7 million of Bam’s followers can browse for merchandise, from tees to caps and masks, by accessing his store on BB Ki Vines. There’s also Youthiapa.com, the official store for BB Ki Vines merchandise. Famous influencer Prajakta Koli, who recently starred in Bollywood movie Jugjugg Jeeyo, has also introduced her merchandise brand MostlySane on The Merch Garage, a creator-driven premium merchandise platform.

“YouTube is a good source of income for creators,” says New Delhi-based Nischay Malhan, who goes by the handle Triggered Insaan. Malhan, who has 26 million followers across three YouTube channels, ends up making more than ₹1 lakh during peak season via the platform’s monetisation avenues.

Sheth of Monk Entertainment says big creators have the potential to rake in ₹20-50 lakh per month through the merchandise model. However, most brands tend to die out after the initial push. “Beyond a certain point, people don’t really bother buying a t-shirt from a favourite influencer. A repeat product is bought for the quality and not just for the influencer as much,” adds Sheth.

Virtual gifting: It is another strategy Moj is looking to scale up. During a live stream, fans can gift items to their favourite creators. The products can be later redeemed in exchange for money. To be sure, people purchase the products using money, but since the interaction between the user and the creator happens virtually, the digital version of the product is extended during a video engagement. Moj has various digital tokens, including ‘Love It’ and ‘Crown’. The ‘Crown’, for instance, is a digital token fashioned in the form of an animated crown. One token costs around ₹150. Pooja Rajput, a Moj creator earned ₹40,000 through ‘Crowns’ from a single stream in February. However, the virtual gifting market is still in its nascent stage, and PGA Labs’ Singhal says it has the potential to touch over $1 billion by FY26.

Web3 all the way: Video sharing app Chingari is going the Web3 way. The platform plans to allow creators to fashion their videos in the form of NFTs that users will be able to buy. “These NFTs have a utility attached to them. Users who buy those NFTs will be eligible for a 10% share of a creator’s daily earnings from Chingari,” says co-founder and CEO Sumit Ghosh. The platform will charge a 5% fee for every NFT minted. The firm has already created a token-based economy — it has introduced crypto token Gari, listed on global exchanges and on CoinDCX in India. Every day, some 50,000 of these tokens are mined and creators are distributed a certain amount depending on the extent of their activity and visibility on the app. “The tokens can be sold on exchanges and exchanged for money,” says Ghosh. The other idea is to establish a creator metaverse. “We want to sell virtual experiences on the platform,” adds Ghosh. About 700 million videos are created on the platform every month, and Chingari plans to cash in on them.

“Creators need to venture into newer monetisation formats that focus on the creator-entrepreneur algorithm like the launch of D2C brands or investments in edtech, fintech, ecommerce and other sectors,” says Nagar.

Funding Creators

Some platforms have launched creator-focused funds while others have crafted growth initiatives to add to the development of the ecosystem.

YouTube has launched a $100 million Shorts Fund that will be distributed through 2021-22. Eligible creators will be able to claim a payment from the fund every month.

Moj is broadening its creator ecosystem through the Moj For Creators (MFC) programme under which it aims to create 1 million superstar creators (those with a wide following) within the next three years. The programme includes training, spotlight programmes, boot camps, influencer town halls and workshops on industry trends. Anybody aspiring to be a creator can sign up for the programme. Already, over 100,000 have joined MFC, and the platform has set a target of facilitating creator earnings worth ₹3,500 crore. “Our top creators have been able to earn upwards of ₹2 lakh a month,” says Shekhar.

Josh, meanwhile, has launched Josh All Stars, a training academy for short-video creators. Individuals will have the opportunity to get mentored by a team of experts and celebrities across categories like music, dance, fashion and food. The idea is to groom creators, help them understand the entire gamut of content creation and build their presence across social domains. Josh says the academy aims to produce ‘India’s next 10,000 stars.’

Major Platforms

India’s creator economy is largely a platform play. Someone’s pain became others’ gain when the ban on TikTok spurred the emergence of a clutch of homegrown apps, also nudging global firms to take a shot at the short-video space. A mix of local and global players, including Josh, Moj, Chingari, YouTube and Instagram Reels, are shaping up the country’s creator ecosystem. They are discovering and lending voice to a diverse set of creators, spending significant amounts towards their development, leveraging their expertise in tech to launch a spate of digital tools for easy content creation, and innovating on the product side to widen monetisation avenues for them.

“YouTube videos are being created in languages like Santhali and Chokri (Nagaland)... Everybody has a story to tell, a voice to share and if that can actually happen in a meaningful manner, with scale, it will travel well,” says Vidyasagar. In the beginning of 2019, YouTube had over 1,000 creators in India with a subscriber base of 1 million. Today, the platform has 4,000, and the number is growing by 50% year on year, adds Vidyasagar.

“There are people from small towns and cities who have developed a national following because of Reels,” adds Paras Sharma, director, media partnerships at Facebook India (Meta). There are around 90,000 Indian creators on Instagram with more than 10,000 followers, around 40,000 with over 100,000 followers and around 10,000 creators with more than 1 million followers, according to Kalaari Capital.

Homegrown apps Josh and Moj launched operations post the TikTok ban, and have already scaled up significantly. Josh, for instance, has over 15 million active content creators, including popular names such as Adnaan Shaikh, Sameeksha Sud, Faisal Shaikh, and Faiz Baloch. Bedi claims Josh has 153 million monthly active users (MAUs) and 74 million daily active users (DAUs). “Short videos are a very expensive business. A lot of investments go into AI, ML, understanding content and personalising it for users to keep them engaged,” he says.

Mohalla Tech-owned Moj has a daily active creator base of around 3 million, covering almost all Indian languages, says Shekhar. “We are seeing more and more niche categories coming up: Sports content; new-age short gaming videos; rappers and singers coming from different parts of India who create vernacular content,” he adds. A user spends 34 minutes on an average per day on Moj, and post the acquisition of social network MX Taka Tak, the platform’s MAUs have increased to around 300 million from 160 million.

“I am getting to witness humour and comedy in such a way that it’s not just restricted to Bollywood or one particular region like Mumbai. There is diversification of content,” says Ashish Chanchlani. “You will see billionaires coming out of it (creator economy), businesses emerging from it, going forward,” he adds.

The creator ecosystem runs on FOMO (fear of missing out), adds Sheth of Monk Entertainment. With competition heating up, young creators lured by algorithms who push their video views to millions need to be mindful. “They need to put in efforts to stay relevant,” he adds.

“We live at a time where reinvention is essential, and you may need to reinvent as frequently as every three months,” says Ranveer Allahbadia. “The future will be regional. It’s a tough market, so you need to bring something very original, very fresh to the table.”