Web3 Is the Future of the Creator Economy
Discussions of Web3 typically focus on user privacy, corporate transparency and data ownership. But it will also revolutionize another industry: the creator economy.
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Defined by the 50 million creatives turning their passions into professions, the creator economy comprises content creators of all kinds: influencers, artists, journalists, gamers and anyone else making content and connecting with fans. Relatively new platforms such as Patreon, Twitch, Substack and Discord are fueling this direct creator-to-fan network, bypassing traditional gatekeepers while swinging open the doors to new kinds of content creation and monetization.
But those above-mentioned platforms are only the beginning. Web3 technologies — including virtual and augmented reality, machine learning, artificial intelligence, blockchains, smart contracts and cryptocurrencies — are going to completely change the way creatives create content, claim ownership and get paid for their work. More than that, they're going to change the way we understand the internet.
Let's begin with the most fundamental part of this discussion: content creation.
The metaverse will make extended reality (XR) experiences more accessible and prominent. XR combines virtual, augmented and mixed reality; digital worlds will soon evolve beyond simple games and marketing campaigns into entire worlds with personal avatars, digital goods and complete experiences.
We're already seeing a massive demand for digital goods via the NFT boom. In December 2021, Nike bought RTFKT, a company that makes "virtual sneakers" and NFTs. Expect more acquisitions this decade, as brands turn to future-looking startups and creatives to be pioneers in the metaverse. Digital shopping malls, hangouts, travel experiences, parties and entertainment are all part of this brave new world.
Not only will there be new avenues for content creation, but the creative process itself will also profoundly change. Artificial intelligence and machine learning will help creators find images, videos, text and audio more quickly; they could also allow NFT creators to augment and personalize interactive NFTs based on the owner's usage patterns. Creators could benefit from content-management systems that are more secure and intuitive than what's currently on the market, and also leverage real-time rendering and transcoding on a distributed network to speed up their workflows.
All these developments trend in one direction: easier content creation, smarter tools and new opportunities to publish work.
Contracts, royalties and ownership
"Smart contracts" will redefine art ownership. At my company, which builds tools for creative professionals, every interaction between content creators and their clients will be logged automatically in a blockchain, which can be set up with "if/then" clauses that release payments automatically upon client approval. Creatives regularly send invoices with due dates set 30, 60 or even 90 days in the future — and even then, late payment is common. Blockchain technology will make that waiting period obsolete, ensuring creatives always get paid for their work on time.
This will make ownership of content clearly defined, which will, in turn, make piracy harder and less frequent. As platforms hosted on the "old web" disappear, Web3 environments and smart contracts will become standard. This will reduce piracy, as content licensing will be captured on blockchain networks. Distribution channels — like Instagram, where photographs are commonly reposted and aggregated without permission — will be unable to claim ignorance because the content itself will have its ownership embedded within its code. In fact, Instagram's CEO said in December 2021 that his platform is "definitely actively exploring NFTs and how we can make them more accessible to a wider audience."
For creatives who require royalty payments, such as musicians, royalties can also be included in smart contracts. These can initiate payments released to whoever is set to receive a cut — the composer, performer, producer, editor, distributor, anyone who receives even a small fraction of a percent — and guarantees payment automatically.
New revenue streams
Most enticingly, in the world of Web3, content creators will be able to drive revenue through new channels and more transparent business models.
In the pre-internet days, artists would rely on middlemen — dealers, stores, curators, broadcasters — to display and sell their works. All took a hefty fee, leaving relatively little for the artists themselves.
The digital versions of those middlemen have been Amazon, Apple or any other popular marketplace that leverages its popularity to take large cuts of sales. Double-digit percentages are common. OpenSea, the largest NFT marketplace, boasts a low transaction fee of 2.5%. The rest of the initial sale goes entirely to the artist. What's more, since every transaction involving a piece of art is logged on the blockchain, it creates absolute transparency regarding a piece's worth and provenance.
On top of this, artists will always be able to track the value of their work after every transaction — and monetize it. Unlike in the old days, when an artist might sell a work for $10,000 that ends up netting some dealer $1 million down the road, NFTs will guarantee the artist always gets credit and can set up a royalty of up to 10% for all transactions made in a work's lifetime. Creators that understand the value of virality encourage their NFTs to be shared and viewed as many times as possible because in the art world, value is a byproduct of fame.
Finally, cryptocurrencies open up a global network of potential paying fans. Millennials are accumulating millions of dollars in crypto, creating a new wealth boom with relatively limited ways to spend that money. This has, in part, fueled the NFT craze, but the lingering effects are unlikely to disappear. The crypto economy exists for good.
Putting power in the hands of creators
Technology has always been about democratization. Consumer software and hardware rapidly catches up to professional-grade tools — edit bays, recording studios and printing presses now compete against software freely available on affordable laptops. This trend has forced the old gatekeepers to adapt their business models or shut down entirely.
Web3 is the natural evolution of this mindset. Creators are looking to control their careers like never before. Their work will not be monetized by YouTube or copied and pasted on Instagram. Platforms will not be able to promote your content solely to keep users scrolling. The public is increasingly fed up with the social-media giants, and not just because of the divisive social discourse. They want to retake control of their privacy. Content creators are no different.Blockchain technology is putting power in the hands of content creators like never before. This could herald a golden age of content creation, where artists are paid well, fans are intimately connected and creativity gets the respect it deserves.