Payments by UGC Platforms for Artistic and Journalistic Services and their Inclusion in the Artists’ Social Security Levy

Background and objectives

User-generated content (UGC) platforms, including well-known social media platforms such as YouTube, Instagram, TikTok and Twitch, have become an integral part of everyday media consumption. As advertising platforms generating billions in revenue, they also play a significant economic role. A growing number of professional content creators earn a living by producing content – videos, photographs and texts – for these platforms. Content creation on social media platforms is thus emerging as a new field of self-employment.

UGC platforms offer a wide range of opportunities to monetise content. However, significant gaps remain in our understanding of the payment flows between UGC platforms and content creators. Commissioned by the German Federal Ministry of Labour and Social Affairs (BMAS), the research project aimed to improve our understanding of these payment flows. It also examined whether payments made by UGC platforms should be subject to the artists’ social security levy.

Approach

The research project comprised three modules:

• A review of remuneration and payment models on UGC platforms
• An analysis of content creators’ perspectives on monetisation opportunities on UGC platforms and the composition of their income
• An examination of the role of other intermediaries, including agencies, labels, networks and collecting societies

Findings

The analysis identified a wide range of monetisation models used by social media platforms. These include shares of advertising and subscription revenue, payments from viewers, bonuses and incentive payments. Platforms frequently combine several models and determine which creators are eligible for them and under what conditions. Due to the lack of platform data, the overall volume of these payments cannot yet be estimated reliably. Content creators’ own accounts revealed substantial income disparities: while some creators earn considerable amounts, many smaller creators receive only a few hundred euros per year. Social media agencies arrange advertising partnerships and manage creators in return for a commission, but they are not directly involved in payments made by platforms. Multi-channel networks, by contrast, receive payments from platforms and pass a proportion of them on to content creators.

The analysis highlights several challenges involved in reliably determining and estimating the volume of UGC-platform payments that may be subject to the artists’ social security levy. A key problem is the lack of adequate data from the platforms. Future research could therefore draw on data held by content creators and supplement the qualitative findings with quantitative evidence to provide a more reliable estimate of payments.