Key Highlights:
- Economic Volatility: The significant uncertainty and financial losses creators face due to shifting policies, such as the potential TikTok ban and international trade tariffs.
- Federal Support: A strong recommendation for the U.S. Small Business Administration (SBA) to extend its mission and resources—including access to legal, tax, and financial experts—to support digital entrepreneurs.
- Legal & Business Barriers: The need to address operational hurdles such as unfair payment terms, the growing threat of IP theft, creator burnout and exploitation, and inconsistent state laws governing the right of publicity.
- Child Creator Protection: A call for federal “Coogan laws” to safeguard the earnings of child performers and prevent exploitation.
The House Committee on Small Business held a hearing earlier this month titled “Streaming Success: Small Businesses in the Age of Digital Influence,” to address the legal and policy challenges facing content creators, whom leaders now recognize as a new generation of entrepreneurs.
The hearing, held in the Rayburn House Office Building on September 17, featured testimony from four key witnesses:
- Kayla Morán, an attorney specializing in the creator economy;
- Christina Brennan, President of Renegade Talent Mgmt (a division of CelebExperts);
- Nicholas (“Nick”) Luciano, Founder & CEO of Tratter House; and
- Jesse Appell, Founder & Owner of Jesse’s Tea House.
The term content creators was predominantly used to refer to the broad range of creators and influencers through the lens of being small business owners that operate within the creator economy.
The central message was that content creators are “more than just entertainers,” explained Congressman Roger Williams (R-TX), Chairman of the Committee, during opening remarks. “They are small business owners, entrepreneurs, and job creators.”
Small Business in Focus
Founded at the end of 1941 by the U.S. House of Representatives, the House Select Committee on Small Business is a congressional body responsible for addressing the needs of small businesses and entrepreneurs. The Committee landed legislative jurisdiction and oversight functions of small businesses beginning in 1975, which gives it a degree of authority to hold the U.S. Small Business Administration (SBA), an independent agency of the federal government, accountable.
During the hearing, witnesses and committee members stressed the importance of extending the SBA‘s resources and mission to the rapidly expanding creator economy. Morán highlighted the SBA‘s traditional mission during her opening statement, which she explained is “providing aid and protecting the interests of entrepreneurs”, typically serving businesses like restaurants and mechanic shops. She recommended that the SBA extend this mission to creative entrepreneurs, providing access to dedicated experts, including lawyers, accountants, and wealth management services.
By providing these resources, the SBA could help support this new sector by addressing the unique needs of content creators, particularly concerning complex tax codes, issues of worker classification, and accessing capital when using nontraditional income streams. Supporting creators through the SBA is viewed not just as adapting to the digital age, but as “an investment in the next generation of American entrepreneurship,” as noted in a memorandum published ahead of the hearing.
I’d add that the SBA website offers a helpful starting point for all small business owners (or soon-to-be owners), including those within the creator economy. An assignment for graduate students in my business law course that I teach at Emerson College involves exploring the Business Guide, published by the SBA. You can also explore state-level business guides from your own Secretary of State, if based in the U.S.
The Scale of Digital Influence
In her opening remarks, Brennan emphasized that the creator economy is not just a collection of “birthday photos, vacation selfies, or the occasional ‘no excuses’ gym post,” but an entire ecosystem of commerce, a marketplace, and a workplace.
The social media industry has grown into a multi-hundred-billion-dollar sector in the U.S. The industry’s economic significance is immense, with the following statistics cited during the hearing:
- The global creator economy is projected to grow to almost half a trillion dollars by 2027.
- The global sector is currently valued at over $250 billion and is projected to drive $2 trillion in social commerce by 2026.
- More than 1.5 million Americans now earn a full-time living as creators.
Content creators, or “creatorpreneurs” as Luciano prefers to be called, generate what the Committee referred to as a “spiderweb effect” that fuels jobs for editors, designers, accountants, manufacturers, and various other small businesses.
“The creators who endure, who build trust and serve their audiences and innovate in business are the next generation of entrepreneurs,” said Nick Luciano.
Similar to the first ever White House Creator Economy Conference in 2024, the hearing presented an opportunity for professionals from across the creator economy to weigh in on key areas of growing concern for creators. The hearing primarily focused on recognizing content creators as entrepreneurs and small business owners while addressing critical barriers they face, including volatile policy issues (like tariffs and the TikTok ban), intellectual property protection against AI and content theft, and the urgent need for standardized payment terms and dedicated federal resources for business owners operating in the creator economy.
TikTok and Tariffs: The Unsolved Challenges for Creators
Two major political and policy issues dominated the discussion, highlighting the extreme uncertainty creators face: the potential TikTok ban and escalating trade tariffs.
The most immediate challenge discussed was the volatility surrounding the video platform TikTok. Ranking Member Nydia Velázquez (D-NY) noted that President Trump’s sudden reversal and repeated short-term delays of the ban’s enforcement have left the industry in a so-called “TikTok limbo.”
“America is now home to a novel content creation industry worth billions of dollars,” said Ranking Member Velázquez. “America’s content creators deserve a federal government that is willing and able to support their endeavors. That requires responsive agencies and strong, stable public policy conducive to a prosperous business environment.”
Appell, who shared that he paid for his own ticket to testify, noted that just hours before the statement was due, news broke of a potential TikTok deal. However, he cautioned that “a deal is not a law and deals can be undone,” urging Congress to codify any agreement. If TikTok were banned, Appell stated he would lose 600,000 followers and face “sales losses that are likely in the hundreds of thousands.
“It hurts not knowing,” Morán explained about the constant changes in policy around TikTok, “Can I post content today?”
Ranking Member Velázquez noted that the short time frames create uncertainty and add “immeasurable pressure to [creator] business models.” However, the fate of TikTok wasn’t the only external pressure discussed during the hearing.
The impact of recent trade wars and tariffs was presented as a significant financial barrier, particularly for creators who sell physical products.
Appell, who sources tea from China and Taiwan, estimates that his business, Jesse’s Tea House, has “lost approximately $250,000 in sales as direct result of the most recent trade war.” He detailed how his May subscription box sat in port and had to be skipped altogether, and how he couldn’t secure a restock shipment between January and August. Appell argued that small businesses should be exempted from these tariffs as they lack the resources to withstand such added costs and uncertainties.
Barries within Legal and Business Affairs
The witnesses highlighted several areas where current law and policy fail to protect digital entrepreneurs, primarily focusing on financial terms, intellectual property, and the need for specialized support.
A critical operational challenge identified was cash flow. Morán and Brennan both stressed that payment terms for influencer partnerships are often net 60 or net 90, meaning creators wait up to three months for payment. In a written testimony, Brennan stated plainly that for many creators, waiting that long is “not just difficult, it’s unsustainable.”
Morán noted this trend creates an imbalance in bargaining power, as marketing agencies use one-sided payment terms and restrict the creator’s ability to negotiate rights while offloading production and distribution responsibilities. She urged for establishment of standardized payment timelines (e.g., net 30) and enforceable penalties for late payments. When large brands or agencies withhold payments for months, the practice effectively turns small- or medium-sized creator businesses into financing institutions but without any benefits (such as interest or credit protection) traditionally enjoyed by lenders.
The proliferation of generative AI technology poses threats, making it increasingly difficult to know what content is real or fake or stolen. “The content theft and dubbing over words is extremely dangerous,” explained Brennan. She then shared a chilling example involving a medical professional she represents: “At one point his content was taken and they dubbed over a completely different [supplement] ad.” That particular example involved an offshore company, which added an additional layer of complexity, and featured a potentially dangerous product that wasn’t evaluated or tested through proper channels.
Appell added that algorithmic content curation leads to the rise of AI slop, which “gums up” the user experience. He explained that although his content and business are focused on tea, other content categories face stolen or synthetic recreations of original content without attribution. Appell estimated that nine out of ten stand-up comedy videos online are stolen.
This issue was recently explored by Makena Binker Cosen in her law review article, A New Era in the Creator Economy: Addressing Copyright Issues Between Content Creators on YouTube, published in the Columbia Journal of Law & the Arts.
“The reality is that infringers are taking creators’ views, watch time, and user engagement,” wrote Binker Cosen, “interfering with their advertising revenue and, more importantly, with their ability to bargain with brands for more competitive sponsorship deals—the main source of most creators’ income.”
The ability to commercialize one’s name, image, voice, and likeness, a collection of protectable and licensable rights known as the right of publicity, is currently governed, as Morán explained, by a “patchwork of inconsistent state laws.” Morán argued that federal statutory guidance is needed to create unity and protect creators across the national and global digital landscape, similar to existing intellectual property laws.
She also noted that traditional IP protection mechanisms are ineffective: the Digital Millennium Copyright Act (DMCA) takedown action, often the only recourse, is “cost prohibitive at volume.” Compounding this, bigger companies sometimes exploit DMCA tools built into platforms to restrict and shut down smaller competitors, a practice traditionally viewed as unfair trade.
It’s worth noting that creators are often guilty of weaponizing the DMCA and other copyright enforcement mechanisms. Back in 2023, I wrote about a lawsuit by video game company Activision against TikTok creator Anthony Fantano, an effort to stop Fantano‘s alleged shakedown for payment over the use of a sound clip to promote the video game Crash Bandicoot. Creators are also known for having public disputes that spill into copyright claims (as I wrote about in 2024), with an entire subreddit dedicated to YouTube drama. As far back as 2017, one of the original, and first, court decisions to hold reaction videos as a fair use stemmed from a feud between two YouTube channels.
The terms “Business and legal affairs” is commonly used to describe the legal, licensing, and business development teams within traditional entertainment industry companies. As a similar business and legal affairs area of the creator economy matures, it will be interesting to witness the growing pains and opportunities that arise.
Policy Recommendations and the Resource Gap
A major policy takeaway from the hearing was the urgent need for education and dedicated resources, particularly from the federal government, to address the resource gap facing new digital entrepreneurs.
A number of the witnesses recommended that the SBA extend its mission to the creator economy, providing access to dedicated experts, including lawyers, accountants, and wealth management services. Morán specifically noted that many starting creators lack the knowledge to navigate contracts or tax obligations, such as paying quarterly estimated taxes. Luciano detailed his difficulty in classifying his business properly (e.g., moving to an S Corp) and the need to seek out accountants who specialize in working with creators.
Morán addressed the lack of national oversight that enables “forum shopping and exploitation of child creators where no regulation exists.” She advocated for federalizing Coogan laws (which she noted currently live at the state level in jurisdictions such as California, Utah, and Illinois), which would require trust accounts for child performers to prevent parents from taking their income, citing highly publicized examples of exploitation.
A portion of the hearing touched on the increasing prevalence of generative AI tools, both from the context of productivity enhancements and content generation and creation support. As noted above, the discussions touched on the capabilities of such tools to enable bad actors, such as content farms that are reposting and recreating stolen content.
“[AI] can be such a helpful and important tool for content creators,” agreed Rep. Hillary Scholten (D-MI) during a discussion with Morán, “but, there’s a lot of parameters and rules of the road people need to understand.”
Dr. Brooke Erin Duffy, an Associate Professor in the Department of Communication at Cornell University, provided written testimony highlighting the significant risks and structural inequalities facing creators within the digital economy. Drawing on her research, which includes insights from over 100 interviews, Duffy asserted that while the creator economy holds “tremendous potential for independent workers and small business owners”, influencers and creators remain vulnerable without regulatory oversight and solutions to issues ranging from platform censorship and content suppression to burnout and overwork.
“Recent years have revealed the critical role of influencers and creators in social, cultural, and civic life,” Duffy testified. “But as laborers and small business owners, they require regulatory protection—and oversight.”
It wouldn’t be a hearing about the creator economy without the conversation veering into Section 230 of the Communications Decency Act. Rep. Jimmy Patronis (R-FL) asked the witnesses: “I’m not going to try to lead with my questions I’m asking, but let’s talk Section 230. How important is its existence to each of you?”
Unfortunately, none of the witnesses were aware enough of the regulation to be able to touch on the topic and it instead ventured into a discussion of biometric data capturing and how such data may or may not be used various purposes.
In the days following the hearing, Engine, an advocacy group representing the interests of technology startups and entrepreneurs, submitted a letter for the record. The organization noted the importance of Section 230 to creators and that without Section 230 protections, creators faced the potential for platforms “to either over-remove or under-moderate user content, leaving users—including creators—with the
uncertainty that their content could be unfairly removed or the unpleasant experience of an unmoderated online space where spam, harassment, and more can run rampant.”
What’s Ahead
A missed opportunity for witnesses during the hearing, and arguably the largest elephant in the room, was the topic of age verification laws currently being rolled out in numerous states. Instead, several witnesses and committee members focused on challenges related to the safety and protection of minors and children online, citing topics like AI-driven content moderation and content safety standards.
Age gating technologies will undoubtably have an impact on the nearly $11 billion in ad revenue that platforms receive from U.S. users under the age of 18, which impacts creators and the revenue share they receive from content consumption. It could easily be an adpocolypse 2.0.
An emerging trend in the creator economy that I’m keeping an eye is the entry of unions and trade associations into the mix. We’re seeing organizations from traditional media, such as SAG-AFTRA, trying to figure out a role to play. Newly established organizations, such as the American Influencer Council (which has ties to a few of the witnesses) and the Creators Guild of America, have origins more directly linked to the creator economy.
Overall, I’m enthusiastic about the level of conversation that took place during the hearing. Each of the witnesses brought forward fantastic insights and shared experiences that certainly resonate across the creator economy. I look forward to more of these events being held. Creators and those representing them should be given the chance to share their experiences, have their voices heard, and, ideally, impact the future of regulations and policymaking efforts.