Issue #21: The Slop Economy 💎

Issue 21
February 26th, 2025

Here's something that happened this week that pretty much sums up where we are: Hollywood sent cease-and-desist letters to ByteDance because its new AI video tool was churning out deepfakes of Brad Pitt fighting Tom Cruise – and one of those clips got 3.2 million views on X before anyone blinked. Meanwhile, the Influencer Marketing Factory dropped a report showing that nearly half of all creators now earn between $10K and $100K a year. A real, viable middle class emerging in the creator economy for the first time.

Two stories. One tension. AI is simultaneously making it easier than ever to create content and harder than ever to stand out. The flood is here. The question is whether you're building a boat or treading water.

Let's get into it.

AI just declared war on originality. Hollywood fired back. But the real battle is yours.

If you missed it, here's the short version: ByteDance launched Seedance 2.0, a new AI video generation model, earlier this month. Think of it as a competitor to OpenAI's Sora… type in a text prompt, get a video. Except Seedance shipped with essentially zero guardrails. Within days, the internet was flooded with eerily realistic AI-generated videos using the likenesses of real celebrities and copyrighted characters from Star Wars, Marvel, Stranger Things, South Park, and more.

Hollywood responded with an unprecedented wave of legal action. Disney, Paramount, Netflix, Sony, and Warner Bros. all sent cease-and-desist letters. The Motion Picture Association called it "systemic infringement" and argued that copyright violation was "a feature, not a bug" of the tool. SAG-AFTRA spoke out. CAA said it was engaging ByteDance directly over its "brazen disregard for creators' rights." Even the MPA's letter – the first it has ever sent to a major generative AI company – demanded a response by February 27th.

ByteDance's response? A promise to add "safeguards." Sony's reply to that? Essentially: too little, too late.

Here's why this matters for you, even if you're not a Hollywood studio.

TechCrunch framed it perfectly this week: the creator economy is now caught between two competing forces. On one side, AI tools are democratizing access – letting people who don't have budgets, teams, or production studios tell their stories. On the other, those same tools are producing what the industry has started calling "AI slop" – a deluge of low-effort, algorithmically generated content that floods feeds, drives down payouts, and buries the creators who are actually making something real.

The prediction from industry watchers is a "barbell" outcome: a few giant creators building product empires on massive reach (think MrBeast), and a long tail of specialized operators funded by memberships and niche commerce. The middle? The creators relying on undifferentiated, ad-supported content? They get squeezed.

The Seedance controversy isn't just a Hollywood story. It's a preview of what every creator platform is about to face. When anyone can generate a polished-looking video in seconds, the only moat left is the thing AI can't fake: you. Your voice. Your perspective. Your relationship with your audience.

The bottom line: The slop era is here. The creators who survive it won't be the ones who out-produce the machines. They'll be the ones who out-trust them.

Three data points that tell a bigger story.

The Influencer Marketing Factory's 2026 Creator Economy Report surveying 1,000 U.S. creators found that 45.6% of creators now earn between $10K and $100K annually. Another 5.7% earn over $100K. That's more than half of all creators earning meaningful income from their work. For context, 51.5% reported year-over-year earnings growth in 2025. The narrative that only mega-influencers make money is officially outdated. The middle class is here, and it's growing. But so is the competition: the global creator population is projected to surpass 1.1 billion by 2032, largely because AI is lowering the barrier to entry.

That's what brands are projected to spend on creator advertising this year, up 18.3% from $37.1 billion in 2025, according to IAB data cited in the report. Paid amplification of creator content alone is jumping 48% to $13.2 billion. And here's what's changed: 92% of marketers plan to work with both macro and micro creators in 2026, and not just the big names. Brands aren't just looking for reach anymore. They want the right creator at the right tier for the right goal. If you're in the 10K–500K follower range, there's more money looking for you than ever before.

This one should keep you up at night… or motivate you. According to Billion Dollar Boy, 76% of consumers now trust virtual influencers to inform product recommendations, and 68% say virtual influencers influence their purchase decisions. Meanwhile, 77% of marketers plan to increase investment in AI-generated creator content. The takeaway isn't that you're being replaced. It's that "creator" is being redefined. The bar for authenticity – the thing that separates you from an avatar – just got a lot higher.

What the platforms shipped this week and why you should care.

Instagram shipped a wave of updates this month, and the through-line is clear: AI is now embedded in almost everything. The biggest additions include "Suggested Fixes" for Reels (Instagram's algorithm now recommends edits to improve your Reel's performance before you post), an AI-powered "Expand" feature for Stories, and "Restyle" for Edits users. They also added Weekly and Monthly Recaps – auto-generated summaries of your content performance – plus a Watch History feature for Reels so users can revisit anything they've watched, filterable by date, creator, or time range.

Why this matters for creators: The "Suggested Fixes" feature is the most significant. Instagram is essentially telling you what the algorithm wants before you post. That's unprecedented transparency – or unprecedented control, depending on how you look at it. Either way, creators who learn to work with the suggestions (without losing their voice) will have a meaningful edge. And Watch History means your content has a longer shelf life than you think, people can now find and re-engage with Reels they scrolled past.

TikTok launched a new Creator Level system that gives creators clearer performance tiers and metrics. This sits alongside an updated Creator Health Rating (replacing the old Violation Points system) that launched in January. Creators start with 200 points and earn or lose points based on content quality and guideline compliance. There's also a new crackdown on low-quality TikTok Shop content: post five or more "non-interactive" Shop videos in seven days, and your posting gets capped.

Why this matters for creators: TikTok is getting more explicit about rewarding quality over quantity… and punishing the opposite. The new systems signal that the platform is actively trying to combat its own version of the slop problem. Creators who invest in genuine, engaging content (rather than spamming product links) will be rewarded with better visibility and monetization.

Your anti-slop strategy starts with one question.

Here's the question: Could an AI make this?

Not "could AI technically generate something that looks like this" — it probably can. The real question is: would your audience care if it did? Would they notice the difference? Would it still feel like you?

If the answer is yes. If an AI could replicate your content and your audience wouldn't blink, that's your signal to evolve. Not to panic, but to audit.

The 2026 Creator Economy Report found that creators are pivoting hard toward video production (22.4%) and branding (20%) as their top investment areas. That branding piece is key. In a world where AI can generate a passable version of almost any content format, your brand – your voice, your POV, your relationship with your audience – is the one thing that can't be commoditized.

Here are three concrete moves:

1. Lead with opinion, not information. AI is great at summarizing facts. It's terrible at having a take. The creators who will thrive in the slop era are the ones who tell you what something means, not just what happened.

2. Build off-platform relationships. Email lists, community platforms, direct messaging – anywhere you own the connection. The report showed that product/merch sales and affiliate marketing now make up 21.2% of creator income. That revenue doesn't depend on an algorithm. It depends on trust.

3. Make your process visible. Behind-the-scenes content, works-in-progress, the messy middle of creation. This is the stuff AI literally cannot produce because it doesn't have a process. Show yours. It's your proof of humanity.

The slop economy rewards two things: scale and soul. If you can't compete on scale (and most of us can't), double down on soul. The audience is already hungry for it. 75% of consumers now skip content that feels too polished, according to TikTok's own research. Raw, real, and yours beats manufactured every time.

That's all for this week. If you found this valuable, forward it to a creator friend who needs to stay in the loop. And if someone forwarded this to you, sign up to get your own issue every Thursday.