In India’s rapidly evolving influencer marketing industry, platforms like Instagram and Amazon are continually innovating to create additional income streams for content creators. These platforms aim to help creators monetize their content through subscriptions, virtual gifting, and sales commissions. However, despite these efforts, many influencers still rely heavily on gig-based brand collaborations, indicating a struggle to convert their large followings into meaningful income.
A key issue lies in India’s price-sensitive audience. Unlike the West, where subscription models are well-established, Indian consumers are hesitant to pay for content behind a subscription wall. They would rather continue to hunt for similar content readily available for free instead. The struggle is quite similar to what OTT platforms like Netflix and Hotstar are going through in India. Indian Influencers on social media are now encountering similar challenges.
A whopping 20 Million Reel views but not even 0.0001% conversion into paid customers. Surprising, isn’t it?
According to the Economic Times, even top creators in fashion, finance, consumer technology, and comedy, whose Reels garner up to 20 million views, have managed to attract only 5-25 subscribers to their paywalled content.
Let’s dig deeper!
Limited Success with Instagram Subscriptions
Meta recently introduced Instagram subscriptions in India, aiming to provide influencers with a reliable revenue stream. However, the response has been tepid. Despite having millions of followers, creators find it increasingly difficult to entice subscribers willing to pay for exclusive content. The value proposition of paywalled content seems insufficient for price-conscious Indian audiences, who are reluctant to commit Rs 29- Rs. 999 monthly.
For instance, an aviation influencer with 35,000 Instagram followers launched a subscription at Rs 399 per month in November 2023. Despite initial interest, his subscriber count dwindled to zero over time. Similarly, a fashion and comedy creator with 1.3 million followers expressed scepticism about the appeal of Instagram’s subscription model. With the abundance of free fashion content saturating Instagram, he questioned the allure of exclusivity, doubting that followers would pay Rs 200 for his content.
This sentiment resonates deeply among influencers who struggle to convince their audience to pay for content readily available for free. The challenge lies not just in the ability to attract paying subscribers but also in demonstrating the unique value that justifies the cost in a market accustomed to abundant free content.
Virtual gifting, touted as another monetization strategy, has similarly failed to gain traction. Priced at Rs 29 for 15 stars, Instagram compensates creators with a mere $0.01 per virtual “star.” Creators can only cash out once their balance reaches the $100 minimum threshold, despite amassing millions of views, resulting in minimal earnings.
Anurag Iyer, CEO of influencer marketing agency BigBang.Social, noted the absence of successful monetization stories outside of brand collaborations, citing India’s challenging market for subscription models across various segments.
Even though subscriptions and virtual gifting hold promise for creating a more balanced influencer ecosystem, success hinges on creators delivering high-value content to their Instagram followers.
Amazon Live: Engagement Over Commissions
Similarly, Amazon’s live content streaming strategy in India, despite its extensive reach with over 600 content creators and a vast customer base, has not translated into substantial earnings for influencers. Even for top technology influencers whose streams attract thousands of views, the resulting commissions remain modest. This is mainly because the platform’s emphasis during live streams is more on metrics like concurrent viewership and interaction rates rather than direct product sales.
Sponsored content and brand partnerships continue to be the predominant income sources for creators on Amazon, despite the significant viewership generated during streams.
An Amazon affiliate highlighted the challenge with low affiliate link commissions, noting rates as low as 0.5% for products like smartphones. This underscores the difficulty influencers face in monetizing their streams directly through Amazon’s platform.
Influencer Marketing: The Road Ahead
Despite the challenges, the influencer marketing sector in India is set for significant growth in the coming years. According to an EY report, the sector is expected to clock an impressive 25% growth in 2024 to reach ₹2,344 crore. The growth will continue in the following years and is estimated to reach ₹3,375 crore by 2026. It would be fueled by the skyrocketing growth of brands belonging to lifestyle, fashion, and beauty, which continue to pour more money into marketing activities.
However, the evolving influencer marketing landscape in India raises a critical question: Can platforms like Instagram and Amazon develop effective monetization models for creators beyond traditional brand partnerships?
It is important to note that brands are demonstrating remarkable faith in influencer marketing in India. According to a report from Kroll, more than a third of Indian brands have increased their social media influencer budgets by over 50% in the past year alone. This surge in spending highlights the growing importance that brands place on influencer marketing as a key strategy to reach their target audiences. However. there remains a pressing need for more diverse revenue streams for content creators.
Yet, to truly capitalize on this momentum, it’s essential to tailor features and pricing structures to resonate with Indian audiences. This adaptation could involve exploring micro-transactions, introducing tiered subscription models, or focusing on delivering content that offers clear, tangible value justifying premium pricing.
As influencer marketing continues its upward trajectory in India, platforms like Instagram and content creators must adapt to the market’s unique needs to unlock new and sustainable revenue streams.
