4 Major Challenges Affecting Creative Businesses In 2018

This contributed post is for informational purposes only. Please consult a business, financial and legal professional before making any decisions. We may earn money or products from the affiliate links in this post.

creative businesses

It has always been tough for creative people to be paid for their work.

In historical times, artists and creatives would usually require a “patron”, who would sponsor their work and meet their living expenses.

Over time, creative pursuits became more marketable, and became viable choices as a career option– but primarily for a select few. For decades, there were more creative people than there were jobs for those people– but then something wonderful happened: technology changed.

With the advent of TV and the Internet, creativity was suddenly open for all. More TV channels meant more TV programs being produced, and more companies sprang up to accommodate this demand. Writers no longer had to write for fun; they could start their own blog and generate a profit from the advertising revenue. Artists could sell their work online to an audience across the globe, even allowing customers to download and print the work for themselves.

Companies who wanted to produce TV shows didn’t need to pitch a network; they just needed to set up a YouTube channel. New creative occupations began to emerge, too; jobs in AV tech, sound production, and cinematography were born thanks to the expansion of TV channels and open-publishing Internet.

As one might expect, this lead to a boom in creative businesses. Business people and entrepreneurs have always been keen to capture a moment, and we have seen an explosion in print media, TV production, video production, and other similar companies over the past five years.

You may have even been tempted to move into this area of business yourself, wanting to capture the momentum and see what you can produce, while helping to harness your own personal creativity at the same time as founding a business.

However, after the boom there is always a bust, and there are signs that the Golden Age of creative businesses is beginning to dim. As we move into 2018, creative businesses are more on the ropes than they have ever been before. Print magazines have closed, websites are laying off staff and diversifying their output, and what once seemed to be a promising business sector is once again beginning to suffer.

So before you start a creative business, or whether you just want to achieve more with the one you already own, it’s important to look forward to the challenges that the industry faces as we move into the new year.

#1 – The advertising problem

For years, advertising was what allowed the creative industry to flourish on the Internet.  Adverts could be placed within content, as sponsored links, or at the start of videos. These allowed creatives to receive money for their work and was the driving force behind the entire creative boom.

However, advertising revenues are down. This applies across all forms of media and Internet usage. The use of ad blocking software is rampant, so the income that used to be able to be generated by banner ads is now being reduced down to next-to-nothing. Internet users are also more wary than ever about clicking on sponsored links, so use of platforms such Google AdWords are no longer is lucrative as they once were.  Additionally, for companies who have made their living producing video content for the likes of YouTube, many have found that their videos are being demonetized, meaning their creators have lost huge chunks from their income. Even TV advertising is not as financially viable as it once was.

Sadly, it appears as if this is a trend that is going to continue into 2018. Advertising was the backbone of the golden age of creative businesses, and with its influence now clearly beginning to dim among a new generation who are more ad-savvy than any of their predecessors, it’s clear that creative businesses will have to adapt.

There are continual efforts that some companies are using to allow them to earn a living from their creative content without an over-reliance on advertising. Patreon, for example, is a modern version of the old patronage system, where users can pay to view content from people and companies they are a fan of– though Patreon is not without its own problems. More and more sites are putting up paywalls or soliciting donations in an effort to generate income, but these tend to run up against the second challenge that creative businesses face.

#2 – Consumers are used to art being free

The Internet may have fueled the creative business boom, but it could also be its downfall. The web has meant that we’re all used to reading and watching content “for free”. Of course, it’s never truly been free; all of that content was paid for by advertising… advertising that modern Internet users now find unacceptable.

So creative businesses are stuck. People are turning on adblockers, which denies the company revenue. However, if people are then asked to pay for the content they receive via a subscription or donation model, people don’t want to do that either– because they’re used to getting that content for free. It’s a nightmare scenario, and one that has led to the failure of multiple creative businesses over recent years.

An example of this is Cracked.com, one of the oldest creative businesses online. In 2017, the site began to appeal for donations and offer subscriptions. This clearly didn’t work, despite the fact the site receives millions of visitors every month and millions more watching their YouTube channel. By December 2017, huge layoffs took place and the site is now struggling for survival.

If you run, or want to run, a creative business, then you will have to battle with the fact that your consumers are used to getting their art for free. If you have a writing business, readers won’t want to pay. If you have a photography business, you will find yourself struggling to convince people you can do a better job than a couple of friends wielding smart phones. Video production companies struggle to market their work in the face of the behemoth that is YouTube.

These problems will, eventually, move on. In time, consumers will tire of losing all of their favorite sites and services and money will begin to flow– but you have to be sure your business is ready to wait this intermittent period out.

#3 – The competition is fierce

The boom of creative businesses was fantastic, but it also led to the same issue that arises during any boom: competition. As soon as creative businesses started to be financially viable, they started to multiply. More and more businesses have since sprung up, offering essentially the same products and services as everyone else– the competition is as fierce as it has ever been.

If you want to make your creative business work in the face of the sternest competition you will have ever encountered, you have to offer something that is truly unique, have exceptional skills, or be incredibly lucky– and sometimes, you might need all three of these.

The one upside is that, as some of these businesses inevitably fold due to the issues identified in the first few points, the competition will eventually shrink. Again, though, you have to be sure that your company is the one who can get through the present in the hopes of a better future.

#4 – Self-taught skills are more viable

Finally, more and more people are taking it upon themselves to learn creative skills. 50 years ago, if you wanted to be a camera operator, then you would have a finite number of ways to do that. You would have to train, get work experience, then find a job with one of the very small number of companies that employed such people.

The modern world is very different. With the above example, someone could educate themselves on camera operation by taking online courses, experimenting with their own equipment, or offering themselves for free work experience to one of the thousands of YouTube companies who produce video. The same goes for any other creative profession; there are more people who can do the same things that once took years to achieve.

As a result, your business will face constant challenges from more creatives than ever before. You will also find that your prices are challenged by overseas workers who, thanks to exchange rates, can make a great living while offering services at a price you could never compete with.

Knowing how to fight back against this is very difficult, but the main methods are the same as ever: produce good work, emphasize quality over quantity, and keep pitching for new clients. Sadly, there is no magic wand that you can wave to make the extra creative people change their careers overnight– and if there was, all the other creative businesses would just use it as well.

In Conclusion

Reading through the above, it can seem like creative businesses are bust before they have even had the chance to start. This is not necessarily the case; there will always be a space in society for businesses that seek to create, make art, and bring joy to people.

It is impossible not to acknowledge that the landscape has hugely changed in recent years, but there’s still call for creative businesses– provided you’re willing to dedicate the time and effort required, and always ensure you have a clear plan for the future.