Web3: The Future of the Creator Economy
The creator economy, which is defined by the 50 million creatives who have turned their passions into careers, includes all types of content creators, including influencers, artists, journalists, gamers, and anybody else who creates material and connects with their audiences. This direct creator-to-fan network is being fueled by relatively new platforms such as Patreon, Twitch, Substack, and Discord, which are circumventing traditional gatekeepers while opening the doors to new sorts of content creation and revenue.
But those above-mentioned platforms are simply the beginning. In the coming years, Web3 technologies (such as virtual and augmented reality, machine learning, artificial intelligence, blockchains, smart contracts and cryptocurrencies) will fundamentally alter the way in which creatives generate content, claim ownership of it, and are compensated for it. More than that, they have the potential to fundamentally alter our understanding of the internet.
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Table of Contents
Let’s start with the most fundamental aspect of this discussion: the generation of new content.
The metaverse will make extended reality (XR) experiences more accessible and prominent. XR is a combination of virtual, augmented, and mixed reality; digital worlds will soon evolve beyond simple games and marketing campaigns to include entire worlds with personal avatars, digital goods, and complete experiences. XR is a combination of virtual, augmented, and mixed reality; digital worlds will soon evolve beyond simple games and marketing campaigns to include complete experiences.
We are already witnessing a significant increase in demand for digital goods as a result of the NFT boom. Nike acquired RTFKT, a business that produces “virtual sneakers” and NFTs, in December 2021 for an undisclosed sum. Expect to see more acquisitions in the coming decade, as businesses look to forward-thinking startups and creatives to be pioneers in the virtual and physical worlds. This brave new world includes digital retail malls, hangouts, vacation experiences, parties, and entertainment, to name a few elements.
This means that not only will there be more opportunities for content creation, but the creative process itself will also undergo significant transformation. Artificial intelligence and machine learning will assist creators in finding photos, videos, text, and audio more rapidly; they may also allow interactive NFT developers to augment and customise interactive NFTs based on the owner’s usage patterns, as previously mentioned. Users may benefit from more secure and intuitive content management systems than those currently available on the market, as well as from real-time rendering and transcoding on a distributed network, which would allow them to work more quickly and efficiently overall.
All of these innovations are moving in the same direction: making it easier to create content, providing smarter tools, and providing more ways to publish work.
Contracts, royalties and ownership
Art ownership will be redefined as a result of “smart contracts.” Every interaction between content creators and their clients will be automatically stored in a blockchain at my company, which develops solutions for creative professionals. The blockchain can be configured with “if/then” clauses that release funds automatically upon client approval. It is normal for creative professionals to submit bills with due dates that are 30, 60, or even 90 days in the future — and even then, late payment is common. Blockchain technology will eliminate the need for this waiting period, guaranteeing that creatives are always compensated for their work on time.
Because of this, the ownership of content will be clearly identified, making piracy more difficult and less frequent. Because of the demise of platforms located on the “old web,” web-based settings and smart contracts will become more commonplace. Because content licensing will be captured on blockchain networks, piracy will be reduced as a result. Because the content itself will have its ownership incorporated into its coding, distribution networks — such as Instagram, where images are frequently uploaded and aggregated without authorization — will be unable to claim ignorance. As a matter of fact, the CEO of Instagram stated in December 2021 that his platform is “certainly actively studying NFTs and how we might make them more accessible to a wider audience.”
Royalties can also be included in smart contracts for creatives that demand royalty payments, such as musicians, in order to receive their work. These can be used to automatically release payments to whoever is set to receive a cut — the composer, performer, producer, editor, distributor, or anyone else who receives even a small fraction of a percent — and ensure that payments are made on a timely basis.
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New revenue streams
However, one of the most enticing aspects of the Web3 is that content creators will be able to generate revenue through new channels and more transparent business models.
Artists used to rely on middlemen — dealers, stores, curators, and broadcasters — to display and sell their work in the days before the internet was invented. All of them demanded a large sum of money, leaving little money for the artists themselves.
Amazon, Apple, and any other popular marketplace that takes advantage of its popularity to take a large percentage of sales have served as the digital equivalents of those middlemen. Double-digit percentages are common in financial transactions. OpenSea, the largest non-financial-transactions marketplace, charges a low 2.5 percent transaction fee. The artist receives the entirety of the proceeds from the initial sale. Furthermore, because every transaction involving a piece of art is logged on the blockchain, it creates complete transparency regarding the piece’s worth and provenance, which is essential in the art market.
Additionally, artists will always be able to track the value of their work after every transaction — and monetize it if they choose to do so. For example, unlike in the olden days, when an artist might sell a work for $10,000 that later sold for $1 million to a dealer, NFTs will ensure that the artist always receives credit and can set up a royalty of up to 10 percent for all transactions made during the lifetime of a work of art. NFT creators who recognize the importance of virality encourage their NFT content to be shared and watched by a large number of people because, in the art world, value is a byproduct of celebrity.
In addition, cryptocurrencies open the door to a worldwide network of potential paying fans. Millennials are accumulating millions of dollars in crypto, sparking a new wealth boom despite having only a few options for spending their newfound wealth. This has contributed to the growth of the NFT mania, but the long-term consequences are unlikely to be reversed. The crypto-economy will continue to exist in perpetuity.
Putting power in the hands of creators
Throughout history, technology has been about democracy. Software and hardware designed for the general public is rapidly catching up to professional-grade tools. Edit bays, recording studios, and printing presses are now competing against software that is freely available on affordable laptops. As a result of this tendency, the old gatekeepers have been compelled to change their business models or shut down completely.
Web3 is the logical progression of this way of thinking. Creators are attempting to exert greater influence over their jobs than ever before. YouTube will not monetise their work, and their work will not be copied and pasted onto Instagram. Platforms will no longer be able to promote your content purely for the purpose of keeping people scrolling down the page. The general public is becoming increasingly dissatisfied with the social-media giants, and not just because of the divisive nature of social discourse. They want to regain control over their personal information. The same holds true for content developers.
Blockchain technology is putting more power in the hands of content creators than they have ever had before. This might herald the beginning of a golden age of content creation, in which artists are handsomely compensated, fans are closely connected, and creativity is accorded the recognition it deserves.