We are full into what I call the Digital Renaissance.
We looked at one aspect of it back on October 8, when I recommended a tech leader that offers us a great play on the boom in entrepreneurship.
I mentioned that last year, we had 4.4 million new firms created largely as a result of all the shutdowns. And of course, it was all possible thanks to a huge selection of new tech tools.
Today, I want to talk to you about the flip side of that coin.
Digital tools haven’t just been helping businesses get started. They’ve also been a boon to independent creators – like artists, bloggers, musicians, social influencers, writers, even teachers, and financial advisors posting their works online.
Make no mistake. This is a massive trend. Experts say some 50 million individuals are involved in the field that could have a value of $23.52 billion by the end of 2025, according to a report from Million Insights.
Let me show you a key player in it all that will continue to outperform the market for years….
Tools For Creativity
Most analysts out there are calling this the “Creator Economy,” but I don’t because that term could include any artists or artisans.
No, what we should really be talking about is the boom in online creators.
What’s going on here is unprecedented in scale. We haven’t seen this much growth in creative output since the Renaissance back in the 15th and 16th centuries.
With today’s digital tools, creators can get started from nothing and go global seemingly overnight.
It’s not just the software tools, 3d-printers, and tablets for digital painting, and so on that have made this possible. But these tools do have a role in this trend, and subscribers to my Nova-X Report service already have had the chance to claim a stake in a powerful tool for game and metaverse development that I see as still having upside ahead.
More than that, we have reached critical mass because of the cloud and high-speed Web connections now being common.
These put world-class creative tools and marketing intelligence, backed by huge amounts of data and AI, at the fingertips of anyone who wants them.
It’s making it easier than ever to start your own creative endeavor and make your voice heard – and your creations sold.
Going It Alone
Today, creators don’t have to launch their own websites anymore with their own e-commerce built-in. They can, of course, and often do once they grow big enough.
But today, creatives can get started much faster. They’re tapping into apps like Instagram, where they can showcase their latest creations through pictures and video, and people can order them right in the app.
Or take Substack, a platform that makes creating an email newsletter a breeze. It even handles managing subscription fees for just a 10% cut, letting creatives focus on writing the content they’re good at.
No wonder journalists from the New York Times, The Verge, and elsewhere have left their jobs to work for themselves on Substack.
Patreon is another example. Here, creatives can post their output in a blog format with video, and lock it behind tiered membership levels. They decide what is available at which tiers, and what the monthly charge is for each level.
Many people use Patreons as a way to support their favorite creators, even when what they make is released for free.
And of course, there’s YouTube, where creators can have their own de-facto TV channels, with income from both sponsored content and ads before, during, and after their videos.
Industry analysts say that YouTube is the leading source of revenue for members of the Digital Renaissance.
But it’s not the only one, and it’s not directly investible since it is owned by giant Alphabet.
That’s why I’m happy to once again recommend you take a good look at Snap Inc. (SNAP).
It’s A Snap
Snap’s app, Snapchat, has long outgrown being just a messaging app for sharing images.
It now features fully integrated, ad-supported short-form video content that is growing massively.
Sports shows, news, original programming, and even TV shows are now available on Snapchat, and over 50 million users a month watch TV content on the app.
This includes original programming from people such as mixed martial artist Conor McGregor, actor Jaden Smith, and comedian Kevin Hart.
The second season of McGregor ‘s show, to take just one example reached over 14 million viewers – without the backing of a major network.
Smaller creators can also make money off their videos. Between November last year and May of this year, the company paid out over $130 million to about 5,400 creators.
That includes over 250 people who were paid more than $100,000 each.
And in a first-of-its-kind move, Snapchat allows creators to make the details of their audience’s demographics public to any businesses looking to find a new influencer to work with.
Businesses can then search for Snapchat creators that fit their criteria, and partner with them to showcase products and features.
Now, since I last mentioned Snap to you back on January 22, the stock is up more than 44%, more than doubling the S&P 500’s 18% return.
Based on its recent earnings, I see plenty of upside ahead. On Friday, October 22, Snap reported per-share adjusted earnings of 17 cents. That beat the Wall Street expectations of just 8 cents per share out of the water.
That’s just the beginning. I project that Snap’s earnings will double in the next three years.
However, the reported revenue of $1.07 billion came in just under the expected $1.1 billion. That, and a lower-than-expected outlook for fourth-quarter revenue, sent shares down after hours.
That’s standard Wall Street overreaction. As the earnings show, the company is doing great and is growing at a very fast pace.
So, I see the dip in share price as a great buying opportunity. Wall Street just handed us more upside now that we can scoop up shares at a discount.
It all goes to show you how the new digital world that is all around us can turn your portfolio into a financial work of art.
Cheers and good investing,
Michael A. Robinson