Web3 & the Advent of the Decentralised Creator Economy
Today we are talking about a super important topic that is relevant to all ages: The Web3 Creator Economy & The Ownership of content!
We have seen content creation as well as content consumption rapidly change over the years and there is no stopping it at all. So much so that today we have started seeing people take notice of the emergence of a new kind of economy, the Creator Economy.
In the deep dive below, we will explore every aspect about a decentralised content creation ecosystem, problems within the current content creation sphere, loss of creator revenue, censorships and why a decentralised platform is the NEED OF THE HOUR ⏱ & some more…
Understanding What is a Creator Economy
When we start any topic with the word economy associated with it, we immediately have to associate it with a monetary ecosystem. Similarly, a creator economy is exactly that — Monetisation of content put out by a creator.
Audience Monetisation within the realms of a Creator Economy
The creator economy is growing by Leaps & Bounds and every year new creators are being onboarded on various platforms to drive the game of content creation in full speed.
Even if I was Writing ✍🏻 (Content) this very article on a site like Medium (Platform), and if I was under the Medium Partner Program (which I am not), that monetisation aspect would become a part of the larger creators economy.
So any content that you produce on a platform which could be used to generate a revenue in return for your hardwork & creativity, is what becomes the building block 🧱 of a Creators Economy.
This all changes with the advent of the Web3 Creator Economy!
The above was a theoretical explanation and my take on how to successfully define the Creator Economy. Let’s take things a step further and understand the whole rush behind this ecosystem, and why every platform worth its salt is trying to get a piece of the creator economy pie 🥧:
Making a Career out of Content Creation
We 90’s kids definitely grew up answering the question “What will you become when you grow up?” with absolute inspiring career choices like Astronaut 🧑🚀 , Doctor 🧑⚕️ , Engineer 👷♀️ , Cricketer 🏏, Footballer ⚽️ and so on — This is because neither was broadband internet easily accessible and the notion of making videos only belonged to a large Film or Television studio. So we settled with our career choices!
Cut to present time and suddenly the digital nomad aspires to become the Next Big Thing on the internet.
It could be through YouTube, Instagram, Tik-Tok, Twitter, Medium…does not matter, as long as the goal to monetise their content is met and so is the fulfilment of their digital popularity going off-the-charts. Simple Needs!
While it may feel surreal to aspire to have the below numbers of some of the largest Individual creators on YouTube, the reality check that every creator needs is through numbers 📊
The matter of fact is that close to 1% out of the entire creator pool on YouTube earn a sustainable living through the content they produce on the platform—minimum wage. Yes, I’ll give you a moment to let that sink in.
The entire content creation space being dominated by the Top 1% does not sit right with me at all. It is my personal opinion, but I have come across YouTube channels with less than a 1000-subs churn out higher quality and data-driven content when compared to a mass-distributed content creator with over 1,000,000.
That’s the hard truth that we have to deal with in the absence of a decentralised content platform.
1.2 Platforms are printing MONEY 🖨💵
The vast inflow of traffic to the various platforms has also given rise to platforms making BIG MONEY by retaining the attention of the audience. The prime example of this is YouTube and its Ad-revenue for creators. The Monopoly of a platform visible here 🧐
Creators flock to start producing content and upload it on YouTube because of its “Generous” partner program. The term generous is in quotes because YouTube takes a massive 45% of the total ad revenue generated through a creators video and the rest 55% is paid to the creator.
Talking about another creator favourite platform is Instagram (owned by Meta). There is no partner program on Instagram per se and whatever is available on the internet is just plain confusing.
At least YouTube has a dedicated analytics page that shows the potential Ad-revenue for a certain time-period as well as the earnings per individual videos, but I am yet to come across something similar on Instagram.
The ultimate dominance enjoyed by YouTube is not because YouTube is the BEST platform to showcase talent.
The dominance solely exists because there is no competition operating in the same sphere and because of enjoying a monopoly business, YouTube can afford to dictate its terms & conditions to the creators on the platform. Something very troubling that comes in with this power is also their right to Censorship.
Very recently in 2021, YouTube randomly started to shutdown channels that produced content around crypto…no warnings, no community guideline violation, no copyright strikes—Straight on channel termination.
Even today multiple channels on YouTube are facing a shadow ban on their content…even the creators themselves have appealed to the platform on numerous occasions, but the platform prefers to blame it on their “Algorithm” #SUS
Decimation of Creators ⚔️
As we have discussed above, the Centralised Creator Economy is plagued with issues left,right and centre — from ZERO revenue share model to an insane platform tax, from the demonetisation of a Creator to the extreme step of Banning creators from the platform, Centralised platforms have decimated the very livelihood of creators across the globe. Let us take this step by step:
The non-existence of Centralized entities in the decentralized space is what changes the game when we speak about the Web3 Creator Economy.
2.1 “All money & content BELONGS to the platform, NOT the creator”
Twitter: Many times while browsing through tweets and visiting some profiles on Twitter, I have come across posts with “Promoted” mentioned at the bottom. What does that mean? Well, it means:
- that the creator of that post is running an Ad on Twitter
- the creator is paying Twitter an Ad fee for the promotion
- Every interaction with that tweet has a particular sum of money deducted from the creators Ad revenue balance which is pledged as a pool before the Ad campaign could go live
Sounds cool? But wait…if Twitter is charging for the promoted post and keeping 100% of the revenue to itself, how does it make sense?
The most surprising thing about this whole scenario is that not even a single dime goes to the content creator or the owner of the profile, it all belongs to the platform.
Meta: Taking it a notch higher, Meta plans to charge creators a fee as high as 47.5% for the sale of good in its Metaverse. Surprisingly, Meta was very critical of Apple charging a 30% fee-cut from the developer for all subscriptions made through the App Store.
YouTube: Remember how I used the term “generous” for YouTube earlier in the article in terms of Ad-revenue sharing model with the creator. Now I will display their actual generosity when it comes to respecting a creator and their content:
First let us get an idea about the minimum criteria to meet for a creator to be a part of the YouTube Partner Program (YPP) and be eligible to earn revenue through Ads:
- 4000+ public watch hours in previous 12 months
- Minimum 1000 subscribers
I will now take the opportunity to explain everything that I have written above by taking my own personal YouTube channel as an example:
I have around 398 subscribes on YouTube. Which automatically makes me ineligible to be a part of the YouTube Partner Program. No monies for me
Now, one of my videos with the highest view count across my channel. It has garnered more than 25K views.
So that’s sad right? I have a video on my channel, produced & edited by me, performed amazingly well in terms of Views, but sadly, no revenue was generated by it!
This is where things get interesting…
There is an Ad playing before the video begins …
So basically, a video that has been produced by me, using production gear that costed me around Rs 2.75 lakhs ($3,550), absolutely original in content, does NOT earn me even a single penny, but YouTube runs continuous Ads on it and earns 100% of the revenue generated through it!
All this loss of revenue for an individual creator like me—just because I have not met their Partner Program threshold. I won’t term it as absolute, but it’s ridiculous to say the least.
I am just a drop 💧in the ocean amongst the hundreds thousands of creators who are struggling to produce content and make it to the top 1% on this Centralised & Monopolised platform—the above event goes to show how a platform is making bank 🏦 through the work of honest creators.
Even Adam Mosseri , Head of Instagram believes that the dawn of the Web3 Creator Economy will shift the entire power of content to the creators and take the current power away from the platform.
Decentralisation: The SUPERHERO 🦸 of Web3
The core factual differences between Web2 & Web3. Pro-Consumers vs Pro-Conglomerates.
Blockchain has enabled the core Web3 Creator Economy by tapping into missing pieces of the jigsaw puzzle that exists in the current Web2 realm.
Understanding the basics here: How Web2 is Consumer-centric & how Web3 is Producer/Creator centric.
The rightful goal of Web3 is to allow every creator to monetise their content while creating a community. The entire process should be a two-way street.
A Creator Economy Startup to Watch out for
Launched in August 2023, Friend.tech is the newest social app for web3 which lets users interact and engage in a financial ecosystem. The platform markets itself as “the marketplace for your friends” and requires users to buy keys (previously known as shares) of other people to chat with them, and lets them earn trading fees each time their keys are bought and sold.
Each user has their Twitter (now X) accounts linked to the app and has access to chat groups using their keys.
You see, Decentralised Social Networks are not really a new concept in the crypto space, there are plenty to come across with just a simple Google search. Since the 2021 bull-run, we have been hearing the buzzword Web3 this and Web3 that, but what about Implementation, Execution and Deliverance? An absolute zero.
Web3 should now aim to empower creators, help creators monetise their content, give creators the absolute ownership of their content, give creators full control on content distribution and so much more.
I believe in the use case of Web3 Social-Media graphs and how it can level up the game for any creator out there.
As I believe and shared this insight in many articles before, we are at the transitory stage of Web2—> Web3 and it will take some time before we can adapt to the ever changing dynamics of the ecosystem, but one thing is for sure, soon rather than later, we will be witnessing a paradigm shift, not only in the way we consume content, but in the way creators start producing and distributing their content.
I have already shared my experience with YouTube in the early parts of this deep-dive and how important it is for us to break away from serving just the Top 1%-3% of creators and onboard more and more Producers before we take off to the moon .