Every platform wants a creator middle class. None of them built one.

Welcome to Product Cocktail, where the takes are as polarizing as a shot of Fernet—but the insights come together like a perfectly crafted daiquiri.

I wrote a product strategy doc on Fortnite's creator economy earlier this year as an unsolicited proof-of-work for an Epic monetization role. That role evaporated, but the question kept growing. The doc focused on Fortnite, but the piece it became is about something bigger.

Epic was tardy to the party*, but within two years of launching Creator Economy 2.0, Fortnite solidified itself as the second largest gaming creator platform in the world: 70,000 creators, $352M in payouts in 2024.

Many of those creators are putting in 20+ hours a week building custom islands and game modes. Only 7% earn more than $1,000 for it. A tiny upper class (0.6%) clear $100K.

This isn't a gaming story. It's a platform economics story.

When engagement drives monetization, discovery is economic infrastructure. Discovery systems pick winners and losers, and algorithms naturally trend toward a middle class death spiral. Engagement advantages stack for the already popular. Earnings follow. "The rich get richer" isn't a defeatist, shrug emoji moment when it comes to creator economies; it's a research-backed claim.

Fine, life isn't fair. Not everyone gets a participation trophy. But emergent creators from the middle class are often the ones keeping platforms healthy. The middle is where the new hotness comes from. Among Us sat dead in the catalog for two years before streamers turned it into a global phenomenon. The discovery algos, you might say, were sus.

So why don't well-intentioned product managers actually solve the problem? Sometimes they can, but every dollar that fixes the middle has to come from somewhere, and the somewhere is usually the top.

I've watched a different version of this at HBO Max. Commerce and Discovery were overlapping problems with non-overlapping roadmaps. Retention meant "dive and save" — not "right person, right plan, right content." Customers fell through the gap and LTV ate the cost. The platform economics version lands on creators instead of customers.

*Shout-out Roblox for launching a gaming creator economy in 2013 before anyone else was doing it at scale.

Epic launched Creator Economy 2.0 to democratize game creation and reward creators. They allocated 40% of Fortnite's existing IAP revenue to a creator payout pool ("Engagement Payouts").

The promise is that any creator can build an island and earn — through the Engagement Payout system, and more recently, in-app purchases on their own islands.

The reality is that engagement follows discovery, which follows an algorithm (and limited hand curation in some cases).

Epic isn't the villain in this story. CEO Tim Sweeney has spent years publicly arguing for fairer creator economics (and legally curb-stomping Apple and Google). They've paid out $900M to Fortnite creators. The question isn't whether Epic wants to fix the middle class. It's why even a well-intentioned Epic struggles to.

Epic has been doing this for 25 years. Unreal Tournament shipped in 1999 with UnrealEd — the same level editor Epic used to build the game. Players made maps, total conversions, and entire new games on top of it. It's in their DNA. Creator Economy 2.0 is the evolution where they finally cut them in.

Fortnite isn't just a platform. It's a vertically integrated banger machine (Battle Royale. Disney IP licensing. Creative Mode. Lego Mode.) that subsidizes its platform economy. The first-party machine is high-margin. They monetize rizz by selling a constantly rotating roster of digital outfits and items to players in the form of in-app purchases and subscriptions (it's called fashion, look it up). The creator economy is lower-margin — creators do meaningfully drive acquisition, engagement, and retention, but that comes at a much steeper cost to Epic compared to their first-party fare.

Epic laid off ~16% of staff (~800 employees) in September 2023. Sweeney called Creator Economy 2.0 “a major structural change to our economics.” Their creator economy works, but it eats into Epic's margin.

In March 2026, Epic laid off 1,000 more employees, with Sweeney citing a downturn in Fortnite engagement leading to them “spending significantly more than [they're] making.” Based on the economics, creator-driven engagement must come in as a multiplier, not a 1:1 replacement. Hence the need for a portfolio of novel, middle class-driven viral moments, not micro-optimizations by the Creator “billionaire class.”

(That March layoff round is the one that killed the role I was applying for 😢)

The intent isn't the bottleneck. An engagement-weighted monetization formula plus centralized discovery produces a half-percent upper class regardless of what the CEO wants. That's what makes this a structural problem, not a moral one.

If Epic-with-good-intent runs into a structural ceiling because of margin math, Spotify hits a harder one because of who holds the leverage.

Unlike Epic, Spotify is a pure distribution layer over licensed content. They tried to escape this through nearly $1B in podcast studio acquisitions in 2019-2020 and exclusivity deals with Rogan and Call Her Daddy, but have largely retreated from this owned catalog strategy.

Top artists like Taylor, Beyonce, and Kendrick remain a credible exit threat. If they pull their catalog, Swifties, BeyHive, and Kenfolk (I had to look that one up) start mashing the cancel subscription button. Promotional real-estate flows up to minimize retention risk, and the middle gets squeezed.

Spotify's annual "Loud & Clear" report tells an oversold de-concentration story. Top 50 share moved from 25% (CD-era) to 12% (today). Artists clearing $50K nearly doubled since 2020. The curve flattened from “absurdly winner-take-all” to “still very winner-take-all.”

The middle tier is thinner than they suggest. Only 10% of Spotify's “professional artist” cohort (250K globally) clears $50K from the platform — barely a middle-class income in major music markets, before label, collaborator, and rights-holder takes.

Two examples illustrate the discovery-as-product dynamic:

The first is Discovery Mode. Launched in 2021, artists accept a 30% royalty cut on streams of selected songs in exchange for an algorithmic boost. Listeners aren't told which tracks are boosted. In other words: payola — an illegal practice dating back to the 1930s, when DJs took undisclosed payments to play specific songs. As of 2023, over half of artists earning between $50K - $500K per year had used Discovery Mode. The math is brutal: a 30% haircut, a track needs 43% more streams just to break even on royalties. The program drew a 2021 congressional inquiry and a 2025 class-action lawsuit over concerns that artists feel compelled to opt in.

The second is editorial. Spotify touts that “more than 1 in 10 artists generating over $100,000 annually on Spotify today were first playlisted on Fresh Finds.” They're positioning themselves as the tastemakers that broke 1,600 careers. I'm not sure this is the flex that they think it is. (Fresh Finds is a human-curated editorial playlist.)

Discovery Mode and Fresh Finds are the same mechanism with different price tags. The middle pays in royalties, the top gets editorial placement. Either way, Spotify controls the surface area, and discovery access, not music itself, is what's being allocated.

Spotify entered an already top-heavy industry with real retention risks. Their response: an algorithm that plays it safe, editorial that favors major-backed tracks, and a middle class paying rent for the privilege of being discovered.

YouTube faced the same structural challenge, and they made the opposite choice: treating discovery as the foundation creators monetize on top of.

YouTube expanded their partner program (YPP) in 2023 by creating a lower tier on-ramp for budding creators to get paid through subscriptions and digital doo-dads, while preserving the high bar for ad-rev eligibility.

YouTube seems to clock that rev share alone ain't it. They offer many other monetization levers: in-app purchases, subscriptions, “Shopping” (affiliate marketing), ticketing, and brand partnerships, giving them more flexibility to (attempt to) democratize monetization than Fortnite (two) and Spotify (one).

They also tout that they've paid out $70B between 2021 and 2024 (a number which includes music licensing payments to artists and major labels) to their 2M eligible YPP creators.

In spite of all this, creator income inequality is as extreme as every other platform in this piece.

You can't out-design power-law gravity. Discovery is economic infrastructure.

Every platform decides who pays the cost, not whether there is one. Fortnite bleeds margin. Spotify charges the middle rent. YouTube built six monetization levers and ended up in the same place.

So is there a middle class anywhere? The Influencer Marketing Factory's 2026 Creator Economy Report points to over 45% of creators earning between $10K - $100K annually, suggesting the emergence of a viable creator middle class.

The tension here is notable, but the same report answers it. “Diversification across TikTok, YouTube, and Instagram has become the standard creator strategy for 2026.” Creator income comes from ad revenue, creator payouts, brand partnerships, and other passive revenue streams like product/merch sales and affiliate marketing to a lesser degree.

No individual platform is building a true middle class, but the ecosystem as a whole is. In other words, if you're the PM here, you're designing an income stream, not an entire economy. You still need to make it worth their while.

I just spent 1600 words explaining why this isn't solvable. Now I'm going to tell you what I'd do anyway.

Keep

Kill

Change

Every one of these decisions begs the uncomfortable design phase question: who do we need to survive? (And who are we comfortable losing?)

The answer decides whether you can rebalance later or whether you're locked into protecting the top.

Platforms like this don't exist without creators. Charge too much rent, and people are moving out of town.

I want to work on the monetization layer that keeps that balance honest.

Send me questions, feedback, and cocktail recipes: [email protected]

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