Unlocking Value in the Creator Economy with Web3
The creator economy, built of independent social media sensations, influencers, content streamers, and more, evidently has not yet reached its full potential as Goldman Sachs recently projected an industry valuation of half a trillion dollars by 2027. With the explosive growth of platforms like Twitch, TikTok, and YouTube, and partnership contracts reaching the $100 million dollar mark for top creators, it’s hard to argue that our pension for this kind of content will slow. At the same time, the model for this new discipline is still largely subscription-based, a setup that has been around since it drove the early days of cable television. While consumers can now subscribe to a much more personalized experience on a creator-by-creator basis, engagement is still largely passive. As a newer form of entertainment, one that consistently seeks out innovation, creators are poised for a revolution in engagement tactics powered by blockchain technology and the unique capability Web3 offers them as well as brands and consumers.
The Existing Status Quo for Fan Engagement
Social media gurus may argue which metric best defines success when it comes to content performance across digital platforms. Some platforms, and their creators, encourage fans to just tune in and watch content while others drive towards subscriptions, yet the underlying indicator of success across all disciplines of the creator economy is fan engagement. By transitioning from non-interactive devices like TVs, to more engaging channels such as phones and computers, the number of engagement points becomes potentially unlimited with platforms like YouTube offering the viewers to like, subscribe, comment, and repost content they enjoy on other social media platforms. To show support on other platforms such as Twitch, fans are asked to re-subscribe each month, giving creators the opportunity to show their appreciation to fans by calling out those who have been continually subscribed the longest. What must be kept top of mind when thinking about all of these different platforms and metrics is that in the internet age there is constant change, and those who evolve first are always going to have an advantage. With programs powered by the blockchain starting to make Web3 more mainstream in the digital ecosystem, the current mindset around fan engagement may quickly change. While engagement will remain the key token to unlocking success, how it’s approached will likely look different in the near future.
Changing Mindsets Around Resources Fans Can Allocate to Entertainers
The creator economy is built around three key players, creators, fans, and advertisers or brand sponsors with the majority of creator funds coming in from fan subscriptions, brand deals, and revenue-sharing agreements with the platforms their content is hosted on. While engagement has always been a key to keeping this economy afloat, asking fans for fiscal support has always limited the potential for their ability to contribute. The engage-to-earn model not only allows creators to continue their creative endeavors but also provides fans and advertisers more for their engagement within the community. Take Youtube for example. If the platform switched to an engage-to-earn model, providing fans an amount of in-app currency for each point of engagement via like, comment, and subscription, there would be a driving reason beyond enjoyment for fans to go back through their favorite creators’ content catalog, as well as checking out new creators which may be offering additional promos for their new videos. For advertisers, this additional engagement data would provide insights into which types of videos are driving the most engagement, and where they need to be partnering with creators in order to optimize delivery of campaigns to their target audiences.
Unlike in-person attendance numbers for things such as Woodstock in the past, the digital age offers the ability for practically unlimited engagement with vast content libraries being available to consumers at the click of a button. It’s understandable that given the proposed valuation of the creator economy attention is still placed mostly on the paid avenues for engagement, but as more channels for engagement open, there is potential to reward not only creators and advertisers but also vastly increase the value fans are given for the time and effort that they provide to content creators.
The End State for a Creator Economy Driven by Engagement
With the advent of Web3, platforms built on engage-to-earn models can take this to the next level by turning engagement into currency which offers fans the chance for a similar unlimited cap of earnings potential. As they view content created by their favorite artists and create their own content around it like a reaction video, they’re rewarded with currency that can be used to unlock digital or physical rewards offered by the same artists their content is centered around. This reward mechanism drives further engagement as users become excited to engage with content not only for the emotional joy it may provide but also for the real-world rewards that they are provided. Traditional avenues for rewarding top fans are still possible such as shoutouts on social media platforms and callouts to “I’m your biggest fan” signs at concerts, but for those operating mostly in the digital space, the ability to receive rewards for engagement on a content platform may be just as memorable.
A Slow Shift Toward the 3rd Iteration of the Web
Blockchain isn’t a new method for content delivery, but rather a new avenue to unlocking additional value around the existing content. While traditional monetary subscriptions have been the bread and butter of fan engagement, blockchain is unlocking new opportunities for resources and revenue to be measured in a different way. By focusing on optimizing the value of time spent engaging with content, rather than the money fans deliver to creators through traditional merchandising channels or direct donations, an entirely new branch of the creator economy is being created.