The Streaming Secret That's Making Kids Millionaires (And Why Brands Are Panicking)

Younger Gen Z kids are doing way better than the older millennials today.

A 17-year-old streamer, by the screen name IShowSpeed, hit $1 million in earnings through daily Twitch and YouTube streams. They livestream, build AI avatars, play games, and interact with their audience in real-time–all the while raking in six figures in revenue.

These virtual influencers have also caused the brand to panic over rapidly losing control of their messaging and audience. The ‘authentic’ is changing to ‘synthetic,’ and brands are barely scrambling to keep up.

The Growth of the Streaming Economy

Livestreaming is taking over the influencer marketing world. The young audience prefers live content over recorded and pre-edited content. Six out of 10 young Americans enjoy watching television on live streaming channels today.

Studies show that live videos are a more effective medium to catch audience attention by 10x-20x longer than prerecorded clips. In fact, 80% of people would rather watch a livestream than read a blog.

Viewers, especially the Gen Z audience, are inclined towards TikTok Live, Twitch, Kick, and YouTube Gaming. All these media, in return, reward audiences for their liveliness. This, in turn, results in even greater engagement.

A few trends are being witnessed currently:

More Impressions

When compared to regular posts, live streams get 10x more comments and 6x reactions. Viewers are also more likely to pay tips or subscribe to gain exclusive access. Twitch reported 2.84 million regular game viewers in 2021, and the Pandemic pushed YouTube gaming to hundreds of thousands of views. The numbers have been growing ever since.

Better Alternatives

Twitch still leads all streaming platforms, but TikTok Live and the new Kick platform, which offers a 95% creator revenue split, are gathering more market share. Kick’s market share has grown by 5.5% in the last two years.

AI virtual influencers

We are seeing the growth of a competitive livestreaming economy where fan subscriptions, chat rooms, and hype tools win over polished ad reels. Another trend that’s catching on in the livestreaming circles is the growth of AI virtual influencers.

Parasocial bond

One of the main reasons the streaming economy is expanding is the parasocial bond that the audience forms with the personality. Traditional authenticity marketing is staged, scripted, and curated. However, a live video, even if it is partially generated by AI, feels raw.

Immediacy

Picture this. A teenager sits behind the camera, plays games, cracks jokes, and shares their wins and losses with the audience. The audience feels connected at once. This immediacy cannot be matched by any paid ad or influencer marketing campaign.

Revenue generation

Streamers and creators are seeing this as a new opportunity to generate revenue, where there’s no agency to take the cut. Streaming is turning kids into mini-celebrities and AI influencers into genuine personalities.

As a result, brands that earlier relied on curated ads and celebrity deals are finding themselves in a pickle.

Why Virtual Streamers Are Gaining Popularity?

Virtual influencers are a new breed taking over the online marketing scene. These AI-generated virtual influencers are computer-created personas capable of livestreaming or posting on social media by themselves.

These relatable robots or AI content tools are also called avatars or CG influencers.

Lil Miquela, Barbie’s digital persona, or CodeMiko, are a few of the popular CGI characters that interact with audiences today, much like human streamers do.

But who manages these AI avatars?

Virtual influencer agencies or media studios typically build these AI avatars and hire voice actors who bring avatar streaming to life. Sometimes, pro digital creators build these avatars for themselves.

For example, VTubers or virtual YouTubers are humans who use real-time motion capture and avatars to conceal their real faces on Twitch and other gaming sites.

Since mostly agencies or brands manage these avatars, these agencies virtually dictate every post and endorsement. For brands, AI streamers offer convenience and consistency:

• The messaging remains consistent
• The avatar remains on-brand at all times
• One AI character can endorse all brands

These influencers are blurring the lines between humans and synthetic media in brand collaborations, capturing the attention of brands more often.

The Deinfluencing Trend

Despite all the rush and pomp, AI avatars, which are made to seem authentic, lack genuine lived experience. And the audience can see through it. There is research suggesting that people find them uncanny and inauthentic.

These avatars ‘never eat, never sleep,’ and the bond that develops between the fan and the avatar is artificially built. You may like an AI streamer’s cue face or voice, but you know they don’t exist in reality, have a backstory, or any real emotions.

There are numerous ways and models via which creators can build revenue streams from their virtual humans or AI avatars:

• Fan subscriptions and donations: Fan subscriptions are among the most popular creator monetisation methods on Twitch and Kick. Fans donate money to their favourite creators or pay for loyalty badges or chat emojis.

Kick has a 95% subscription model against a 50% share that Twitch gives. TikTok Live lets viewers give gifts that can later be converted into cash by their creators.

Today, a micro influencer with 10k subscribers and a small subscription fee of £4 can pocket £38,000 a month, or ~£456k a year on these livestreaming platforms!

• Ad revenue and clips: Many of these creators run ads between streams, on their saved videos, or even promote the product as a part of a stream.

Startups like HypeClips have rolled out AI tools that clip the best moments in a live stream that can be later shared on TikTok or Instagram for more views.

• Brand collaborations and sponsorships: young creators also grab cool avatar brand deals. They partner with brands and agree to wear the brand’s merch or drop a sponsor product code within the chat.

The same holds for virtual influencers. However, here the brands have more control over when, in what ways, and how many times they can run the ad during the stream. This type of mixed marketing is also known as social marketing.

• Merchandise and NFTs: Streamers also sell merchandise like T-shirts and goodies. Some creators mint NFTs, which carry special rights or access to token-gated fan clubs.

For example, a streamer can sell 1000 membership NFTs for £50 each to their fans. Each NFT holder gets perks like private streams, which becomes another direct revenue line.

• Affiliate Links and Fan Communities: Many influencers link their stream to Amazon or game retailers. Every time a sale happens using the affiliate links, the creator earns a cut of the sales.

Also, platforms like Patreon or OnlyFans are used to build tiny fan communities around a creator’s work. These micro-subscriptions help streamers with even a few thousand fans earn hundreds a month.

How Do AI Influencers and Streamers Scale Their Channels?

Streamers use AI-powered tools to automate their channels and revenue-sharing models. Today, a sole person plus a handful of AI bots can equal the digital labour put in by an entire creative team.

Creator AI assistants are used for automoderating chats, generating stream titles and thumbnails, building generative content, and recycling it across multiple platforms. These tools help creators to scale without any creator burnout.

AI influencers can stream 24/7 and can milk every piece of content to boost potential earnings. However, all these come at a cost–the cost of dying authenticity and relatability.

Why Do Brands Face a Dilemma?

Brands are in a catch-22 situation. On one hand, they know how popular these avatars have become, and on the other hand, they fear that the ‘relatability’ factor may not exist between the kid and his favourite virtual character.

Brands fear backlash but know an AI avatar won’t bail on a deal, and at any time, the brands can change scripts without a glitch.

Some brands are already facing criticism for a lack of brand authenticity instead of audience engagement. ‘Deinfluencing’ or inauthentic ads have become so frequent that even a common viewer can differentiate between real and fake.

• Audiences have learned to spot synthetic content. 52% of young consumers say they would rather buy from a human micro-influencer than a polished CGI avatar. Their novelty is a plus point, but how synthetic their content is undermines their authenticity and gives rise to influencer fatigue.
• Brands are no longer in full control of the messaging or medium. The commercial campaigns are second to the streamer’s audience and depend on the streamer’s ingenuity and popularity.
• AI influencers can prove a nightmare for brands built on exclusivity. An AI avatar can be pitching Coke one week and Pepsi the next week. The level of message dilution is unwanted for brands that pay for an avatar’s identity.
• With AI avatars, there would always be the risk of manipulation, as these are basically programmed as code.
• Technology isn’t a strong point for corporate marketers who are still transitioning from polished celebrity campaigns to the raw and chaotic internet culture.

What clicks with the young audience is spontaneous, unexpected, and out of the blue, yet authentic. Many brands lack the agility to match and may often struggle with finding the right match.

Ethical & Economic Implications

The new influencer economy is a big transition happening in the marketing world, and there are certain deep ethical and economic questions that need answering.

• Programmers and designers remain unrecognised behind every recognisable AI avatar. These digital workers remain uncredited and unpaid. It is not clear who owns the persona or who profits when a virtual influencer sells NFTs or memorabilia.
• Intellectual property rights infringements remain another big concern with these avatars. There have been cases when an avatar or content was used without the owner’s consent. At times, these clones have been seen misbehaving.
• There are so many people who enjoy talking to ChatGPT. There’s an emotional capitalism involved. Even though the audience knows these AI avatars are not real, they cannot help but develop attachment or dependence on these parasocial relationships. The emotional labour is way beyond the lines of code.
• Creator burnout and influencer fatigue have become real issues for creators who have to compete with 24/7 live AI content. Microinfluencers can siphon off entire audiences using slick avatars.
• Brands have this nagging worry at all times that their investment in influencer brand deals or AI avatar endorsements would get devalued at any time, as the market overflows with cheap AI avatars and always-on influencers.

The Illusion of Authenticity

Audiences crave real connection, no matter if the person sitting on the opposite side of the screen is real or AI-built. Teen gamers, CGI popstars, travel bloggers, or virtual fashion influencers share relatable content and connect with the audience at a deeper level.

A bit of tech wizardry and creativity can make anyone a millionaire. However, with the democratisation of content comes its commodification, too. Brands need to surrender a part of their message control to stay relevant, but must be careful with their brand voice not getting diluted.

One thing, however, is final: Trust and authenticity still remain two of the biggest factors in successful brand-consumer relationships, whether AI-enhanced or not.