Social Media
Monetization
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The professionalization of the creator economy has been accompanied by a proliferation of opportunities for social media users to generate revenue from their social media activity. Beyond setting themselves up as intermediaries between creators/publishers and their fans and advertisers via monetization features such as subscription, virtual tips, and influencer marketplaces, social media companies have launched revenue redistribution programs, offering their platforms’ most prolific content uploaders the opportunity to access a share of their own ad revenue.
Who is eligible to monetize from platforms?
Anyone with a valid social media account that meets a platform’s monetization policies and program minimum eligibility requirements can apply for revenue redistribution programs and other monetization features.
Platform Monetization Policies
Platforms typically prohibit the participation of minors (unless represented by a guardian), political and government actors, and actors engaged with prior monetization policy violations. Some platform further prohibit the monetization of state-sponsored media or company employees.
Minimum Eligibility Requirements
Requirements vary from platform to platform and program to program, but typically revolve around an account’s demonstrated audience and engagement and the country of location of its admins. In some cases, language requirements also apply.
Social media companies must also abide by laws and regulations, which prohibit them from entering into business and processing payments to certain actors and entities, and require them to ensure responsible business practices across their supply chain.
How does monetization work?
Participation in revenue redistribution programs and other monetization features typically follow the following steps:
Monetization Prompt
Platforms prompt accounts to monetize once they reach a program’s minimum eligibility requirements.
Monetization Contract
Account admin signs on to a set of monetization terms and policies.
Onboarding Review
Platforms review applicants and confirm the monetization partnership.
Payout Account Setup
Approved monetization partners register their payment method of choice and sign on to payment terms.
Payout Calculation
Platforms determine partners’ payout amount, based on performance (as determined by the program), applied restrictions and fees.
Payments
Platforms issue monthly or bi-monthly fund transfers.
Why do we need responsible governance of social media monetization?
Social media monetization has grown very rapidly since 2022, fueled by an increase in competition over creators. Social media companies now process millions of fund transfers worth $ billions every month.
While platforms are merely an intermediary when it comes to the use of some of their monetization features, facilitating connections and payments between creators/publishers and their audience of users or advertisers, they play a far more active decision-making role when it comes to their revenue redistribution programs, where they are are the sole party deciding over who and what gets financially rewarded, as well as how payouts are calculated.
Social media companies have a responsibility to ensure that their monetization decisions do not contribute to adverse impact on illegal activity, society, the environment, and their own business (→ see risk assessment recommendations). Whether they are an intermediary or a central decision maker, it is critical that they adopt a principled approach to monetization, and be subject to adequate transparency and oversight.