Creator Economics Are Platform Economics
Stop chasing views and start growing your business
Start Here
Every digital platform you use is a marketplace.
LinkedIn, YouTube, Substack, Amazon, Google, TikTok, eBay, Instagram, etc.
Each platform exists to solve a coordination problem.
Economists call these n-sided markets.
You probably call them your “content strategy.”
The moment you understand that on each of these platforms you are participating in a market governed by specific pricing mechanics, information asymmetries, and power structures, you stop subsidizing their platform and start negotiating your position inside an economic system.
That is a different game entirely.
Thrilled to have collaborated on this article with my esteemed friend and colleague, Jonas Braadbaart:
Jonas Helps business leaders become AI operators. He is an AI architect and AI agency owner with 10+ years of experience designing, building and delivering AI solutions. Currently, he is building an AI film making studio:
https://www.project-skia.com/
Here is a link to a prior Substack Lives we enjoyed doing together:
The Economics Governing Your Platform Earnings Potential
In 2003, Rochet and Tirole published the paper that formalized how platforms actually set prices. Their central insight was deceptively simple:
In a two-sided market, the structure of prices matters more than the total price level. A platform does not just charge what the market will bear.
It strategically subsidizes one side to attract the other:
Substack charges readers nothing and takes 10% from writers.
Amazon charges buyers nothing for Prime search results and takes 50% from sellers.
Google charges searchers nothing and monetizes publishers’ traffic into ad revenue.
Youtube Shorts earn next to nothing compared to long-form content published on the platform.
The pattern is identical every time.
One side is the product. The other side is the customer.
If you are not sure which one you are, check how you are paying.
Three years later, Mark Armstrong identified something darker.
He called it the “competitive bottleneck.”
When one side of a market “single-homes” (readers who use one app, buyers who search one store) and the other side multi-homes (creators who post everywhere, sellers who list everywhere), the platform develops a local monopoly over access to the single-homing side.
It can then price the multi-homing side as aggressively as it wants.
Armstrong’s Proposition 4 states, almost clinically, that platforms will systematically under-invest in the experience of the multi-homing side. They have nowhere else to go to reach that particular audience.
This is the market’s structural equilibrium.
As a creator, you are typically on the multi-homing side (notable exceptions include Joe Rogan’s USD 100 million Spotify deal, but those are very rare indeed).
Just as new investors should assume they are not Warren Buffett, it would be prudent to assume here that you are not Joe Rogan.
The Algorithm Is the Marketplace
Susan Athey’s work at Stanford reframes platforms not as transaction venues but as information engines.
The real service is not hosting your content. It is reducing the information asymmetry between you and the person who might want to read, watch, or buy from you.
Reviews, ratings, recommendation algorithms, verification badges…
These are the mechanisms preventing the market from collapsing into what Akerlof called the “lemons problem,” where low quality drives out high.
This is why algorithmic change feels existential, because it actually is for most creators. The algorithm is the marketplace’s allocation mechanism for attention. When LinkedIn replaced thousands of fragmented ranking models with a single 150-billion-parameter foundation model that reads your content, evaluates your profile, and matches you to audiences, it did not update a feature.
It redesigned the market’s central pricing mechanism.
The Result: LinkedIn company page reach dropped 60 to 66% between 2024 and early 2026. Personal profiles now receive roughly 561% more distribution. The platform decided that corporate broadcasting is less valuable than human expertise.
Are you new to Operating?
You Might Enjoy These
(Access the entire library of articles and resources for $7.99 per month)
0 to 55,000 - The First 90 Days Playbook - What I’d Do Differently Knowing What I Know Now
The Operating by John Brewton Resource Library - No Filler. All Killer.
WINNING THE LOSER’S GAME: The Creator Economy and the Companies We All Need to Build
Operating Stories: Hermès and the Manufacturing of Scarcity
Operating Economics: Building Antifragile Companies
Become a paid subscriber to access all the content ($7.99 / month)
The Four Seasons of Getting Squeezed
Every platform follows the same extraction lifecycle:
Phase One–Early Growth: The platform subsidizes both sides. PayPal paid users $10 to sign up. Substack recruited journalists with guaranteed advances. TikTok handed virality to unknowns like confetti.
Phase Two–Late Growth: Network effects compound. Users become dependent. Switching costs rise. Not because leaving is technically hard, but because your audience, your reviews, your history, and your data all live behind someone else’s login screen.
Phase Three–Early Maturity: Monetization tightens. Take rates climb. Organic reach quietly declines, rebranded as “algorithm improvement.” Paid promotion becomes the price of visibility you once earned for free.
Phase Four–Active Extraction. Amazon’s effective seller take rate has crossed 50%. Google’s AI Overviews have driven organic click-through rates down 61%, with 58.5% of U.S. searches now ending in zero clicks. The platform answers the question itself. The publisher who created the information maybe gets a citation, but is not guaranteed traffic.
In general, the best time for getting onto any platform is in phase one or phase two of their lifecycle. You’re not fighting the platform.
Competition is light.
Attention is heavily subsidized.
In phases three and four, achieving ROI (return on investment) on your position will get harder and harder. Platforms become pay-to-play.
Think about Amazon or Google as rent-extracting monopolies.
Three Examples
If all of this still sounds very abstract, don’t worry, we’ve got you covered.
Let’s look at three platforms in more detail:
LinkedIn–multi-sided professional platform (6+ sides):
LinkedIn is one of the strongest “information engines” out there in terms of real identity, verifiable employment history, and peer endorsements. Their 360Brew algorithm (rolled out gradually from March 2025) scans all text (headlines, about sections, captions, comments) for meaning. It prioritizes “authentic engagement” and industry-specific insights over generic viral posts.
This was the most significant algorithm change in LinkedIn’s history.
Phase: Early Maturity: The platform algorithms have started suppressing organic reach for companies → to force ad spend → and selectively reward top creators to maintain content quality → then gradually expand monetization to mid-tier creators.
These changes, coupled with a feed composition shift (11% ads, 31% Top Creator content) means the average user’s organic reach is structurally declining.
Get started today or lose out on the platform.
Substack–two-sided creator platform evolving toward multi-sided (3–4 sides):
Substack’s information engine has grown significantly these last two years.
Data from 2025 showed the recommendation network drove 40–50% of all new subscriptions and 25% of new paid subscriptions, and is still the platform’s most powerful discovery mechanism. 40% of all subscriptions now come from inside the Substack network (app + recommendations).
This means Substack is becoming a genuine discovery platform, not just an email delivery tool, which both strengthens its value to writers and deepens its competitive bottleneck.
Phase: Late Growth: the best creator economics in the market, but the first cracks are appearing
Amazon–N-sided commerce platform (6+ sides):
Amazon’s information engine is undergoing its biggest transformation since reviews were introduced.
The Rufus AI assistant and COSMO semantic knowledge graph mean sellers now optimize for three distinct systems simultaneously: the A9/A10 keyword algorithm, COSMO’s semantic understanding, and Rufus’s conversational layer.
This dramatically increases the opacity of the matching engine and the resulting information asymmetry between Amazon and its sellers–allowing Amazon to smartly position their own products and brands.
Phase: Active Extraction - One of the oldest platforms, and not entirely coincidentally, also one of the most advanced cases of rent-seeking in big tech.
download high res pdf here
The High Over, March 2026
Best positions (invest heavily)
Substack — Late Growth phase, lowest take rate (10%), subscriber list portable, discovery engine strengthening (40%+ of subs from in-app). The window is now before monetization pressure from the $1.1B valuation creates extraction incentives.
YouTube (long-form) — Strong bottleneck works FOR you if you’re established. Early Maturity but stable economics. 55% revenue share is the best rate in video at scale. The Shorts format shift is extractive, but long-form remains the gold standard for creator revenue.
LinkedIn — Early Maturity means the platform is still investing in creators via BrandLink. 360Brew algorithm rewards niche expertise. Its core professional audience is high-value. But the organic reach suppression for company pages signals the direction, personal brand investment is time-sensitive as the platform moves towards the active extraction stage.
Maintain presence (don’t over-invest)
TikTok — Regulatory risk resolved (Jan 2026 USDS deal). Great for reach/discovery with improved Creator Rewards ($0.40–$1.00/1K views, up 20x). Its new follower-first algorithm changes are ending the “anyone can go viral” era. Use as a top-of-funnel. TikTok Shop commerce is still a great opportunity in 2026, despite increasing take rates 4% -> 6% -> 8%.
YouTube Shorts — Necessary for discovery, but structurally extractive (55% platform take, 50–100x lower RPM than long-form). Feed long-form. Don’t use the channel as a standalone pillar in your content strategy–only for discovery.
Instagram — Mature and strategically confused but 3B MAU makes it impossible to ignore. Commerce retreat means it’s an advertising platform, not a marketplace. Use for brand building in visual niches.
eBay — If you sell collectibles, pre-owned, or parts, this is experiencing a genuine renaissance (focus categories +16% in Q4 2025). AI features are a real competitive advantage. Otherwise, Amazon dominates.
Proceed with caution
Amazon (as seller) — Active Extraction: 45–51% effective take rate and rising. Be there because you have to, but build direct channels aggressively. The FTC trial (October 2026) is the single most important event for marketplace sellers this decade — plan for both outcomes.
Google Search (as publisher) — Active Extraction via AI Overviews. Organic CTR drops 61% when AI Overviews appear. Plan for 40%+ traffic decline over 3 years. Diversify to email, social, and direct urgently.
Exit or minimize
X (Twitter) — Declining platform (Threads overtook X on mobile DAU, Jan 2026). User base shrinking 10–15% YoY. Ad revenue recovering from a deeply depressed base but CPMs still 70% below pre-Musk levels. Maintain a minimal presence; invest content-creation time on LinkedIn, Substack, YouTube, or Threads. Worth noting: Communities around technology (AI engineering), venture capital, crypto, and the investing community maintain a strong presence on the platform, making presence an imperative if you want to build awareness for your work in these important sectors.
The Power Law You Are Living Inside
A 2025 study analyzing 104,000+ Patreon creators found that earnings across platforms follow a power law distribution with an exponent around α = 2.0. The mechanism generating creator income online behaves more like capital accumulation than labor income.
Initial advantage compounds.
Algorithmic recommendation accelerates the compounding.
The finding that should concern you: Platforms with stronger recommendation engines exhibit more inequality and lower median earnings. Platforms with weaker algorithmic curation show higher median incomes. The algorithm does not just pick winners. It mathematically suppresses the middle class.
Recent data confirms the trend is accelerating.
The top 10% of creators earned 62% of total payments in 2025, up from 53% in 2023. Median creator earnings declined from $3,500 to $3,000. More creators. More money. Less of it reaching most of them.
Three Moves To Strengthen Your Business Today
Stop thinking like a creator. Start thinking like a strategist in markets with known structural properties.
Build portability. Your email list is the only asset the platform cannot reprice, throttle, or algorithmically suppress. Every interaction on a platform you do not own should have one objective: move the relationship to a channel you do own. Everything else is rented reach.
Layer revenue. If more than 30% of your income depends on any single platform’s algorithm or fee structure, you are not building a business. You are being allocated income by someone else’s information engine. That allocation can change on a Tuesday afternoon with no notice.
Read the lifecycle. When organic reach declines and paid promotion becomes necessary to maintain prior visibility, you are entering Phase Three. When the platform launches its own competing product or its AI begins answering questions with your content without sending you traffic, you are in Phase Four. These are not abstract signals. They are measurable. Monitor take rates, reach trends, and new fee introductions like the operating metrics they are.
The platforms will keep evolving. They need to.
And N-sided markets solve real coordination problems and create genuine economic value. For example, a 2019 study by Brynjolfsson et al found that the median US consumer would have been willing to pay up to $17,530 per year for access to search. Google’s US Search ad revenue that year was roughly $45–47 billion across 150 million users, or about $300 per user.
So in this estimate, in 2019, with Google Search in the late growth stage of its lifecycle, Google captured roughly 2% of the value created by its n-sided marketplace.
In 2026, with Google in active extraction mode, revenue per user has roughly doubled to ~$675 (still under 4%) but organic click-through rates have been halved by AI Overviews. Google isn’t taking a bigger slice of a shared pie, but it is absorbing more and more of the value that used to flow to content publishers, historically, one of the key participants in their marketplace.
Final Thought
The economics that make platforms powerful are the same economics that make participants vulnerable.
The difference between being extracted from and being strategically positioned is knowing which side of the equation you are standing on.
Every platform you build on today was designed to solve someone else's coordination problem. Not yours.
The economics are not hidden. They are published in quarterly earnings calls, buried in fee schedule updates, and visible in every percentage point of reach you lost last year. The only question is whether you read them like an economic analyst or experience them as the commodity you can easily become.
Companies are becoming tech stacks.
We are all becoming companies.
Act accordingly.
Hope this helped.
- John & Jonas -
John Brewton documents the history and future of operating companies at Operating by John Brewton. He is a graduate of Harvard University and began his career as a Phd. student in economics at the University of Chicago. After selling his family’s B2B industrial distribution company in 2021, he has been helping business owners, founders and investors optimize their operations ever since. He is the founder of 6A East Partners, a research and advisory firm asking the question: What is the future of companies? He still cringes at his early LinkedIn posts and loves making content each and everyday, despite the protestations of his beloved wife, Fabiola, at times.
 | A guest post by
|
Yep, this is the cycle. Big money comes in, the platform grows fast, everyone benefits for a while, then the squeeze starts.
Early on, platforms reward people for showing up. Later on, they need to justify the money behind them, so the terms get worse and the reach gets tighter.
Substack, LinkedIn and YouTube may be the best bets right now, but nothing stays generous once a platform owns enough of the market.
I wrote about this too because enshittification has become one of the best words for what the internet now feels like: https://millennialmasters.net/p/enshittification-killing-the-internet