For years the conversation online was around the creator economy.
This was a path that started slow yet could be picking up steam. For years, Web 2.0 platforms simply took whatever was placed on its platform and monetized it. This financial benefits went to the owners of the platform, mostly Wall Street shareholders.
Those actually creating the data received nothing.
It is a system that did start to change a bit. YouTube was the first major platform that I recall sharing the ad revenue with the content creators. Of course, the level to get paid was rather high, something most did not even come close to.
Even those who were monetized the payout was minimal. As we will see, this is par for the course and not likely to change.
This was followed up by Elon Musk and X offering a similar program. Those who reach a certain level of activity on their posts (tweets) are able to get compensated.
All of this is a step in the right direction.
Will Web 3.0 Democratize The Creator Economy?
The short answer is yes.
In fact, it already has. An ecosystem like Hive gives anyone the opportunity to get compensated for whatever is added to the database.
The monetization is mostly through a reward system although other options are being experimented with.
Under this premise, payouts come from the inflation of a coin or token, something that allows for participation from the start. Unlike the Web 2.0 programs, there is not really a minimum level that one needs to hit. For the most part, it only requires surpassing a "dust" level.
This is available to anyone. We are dealing with a permissionless system where, if one has a key, the ability to interact with the database exists.
What Is The Creator Economy?
Before diving deeper, we should investigate what the creator economy is?
While this might seem like something that everyone knows, there are nuances. We see a lot of different players within social media and not all of them are the same.
For example, is a professional athlete part of the creator economy? Certainly, in the broadest sense, an Instagram post or Tweet by someone like this this is content, hence it fits. However, it is obvious this is nothing more than either engagement or a tool to enhance ones "brand".
Perhaps the best definition I saw was by Doug Shapiro:
the creator economy is the ecosystem of content creation activities in which independent creators generate content on a self-directed basis that is monetizable by the creator.
The certainly narrows it down a great deal.
We can see how, under this definition, it is likely that this will only grow. The drive to create is not going to diminish. At the same time, the tools available to the average content creator are getting better.
The Challenge With Getting People Paid
While Web 3.0 will democratize the creator economy in the sense that anyone can participate, not everyone will get paid. In fact, it is going to follow Web 2.0.
Here is where we have to spell out the difference.
Web 2.0 has a major extractor: the platform.
When one is on YouTube, the majority of the advertising revenue is going to Google. The same is true on X, Facebook, Instagram, or Rumble. The entities behind these networks have their hands in the till.
Under the Web 3.0 scenario I described above, the vast majority of the payouts go to the content creators and curators. Essentially, the model is flipped.
What does not change is basic math. The power curve that is prevalent throughout the world is still in play. In fact, it is magnified as we are dealing with networks and their basic characteristics.
There is a fundamental component that tells us not all nodes are equal. Some become hubs. This is true whether we are focusing upon infrastructure or social media participants.
Consider the Internet itself. Honestly, most nodes do not matter. They might have an impact upon some minor websites but, in the grand scheme of things, they affect very few people. Sure, when that node is down, those affected are upset yet it is minimal.
If the meta nodes go down, now we see massive impact. Billions are suddenly impacted. It is safe to say that Meta is a hub when it comes to the Internet.
This is no different within content creation. There are major YouTube channels that make a ton of money. They have huge following and a ton of views. Over time, their ability to draw more followers only increases. Many people will click the follow simply because the channel is popular.
Of course, now we get the feedback loop that is commonly known as network effects. With more followers, each message reaches more people. Those opens up the prospects for even greater engagement, resulting in more activity.
Source
This is the curve distribution for YouTube. Actually, it is a generic chart but it applies to all networks.
On the left is Pat McAfee or MrBeast. The have channels that are well known and get huge followings. Because of this, there are a lot of articles written about them, including "How To" regarding making money online. Again, we see even greater feedback to them.
Going back to the chart, all the way on the right is my YouTube account. There is good reason for this since I haven't uploaded a video that I can recall. Obviously, my account is not monetized and I fail to have a channel that is a money maker.
If, however, I started uploading videos, where do you think I would be? If you said all the way to the right, that is correct. The likelihood of me getting anywhere on the left half of the chart is almost impossible. Sure, there is always the potential of getting lucky, where a massive influencer does happen to see a video and promotes it.
Dominating Smaller Ponds
A few month back I wrote Hive: What Is Scarce When Networks Are Abundant.
The challenge with Web 2.0 is networks are scarce. We have maybe 20 entities that control a vast portion of the Traffic. These are all household names and ones we interact with, whether we like it or not, on a daily basis.
Web 3.0 also flips the script on this. Under this scenario, we see networks no longer being scarce. Instead, they are going to be abundant, especially as data is able to flow without friction throughout an ecosystem.
Getting seen on YouTube, Twitter, or Instagram is very difficult. Even getting into the niches is rather challenging.
Things change when those niches become their own network. The ability to construct an economy around a particular topic, hobby, or genre is revolutionary. We are no longer referring to an industry or sector. Instead, this is an economy with its own form of currency along with, potentially, financial services.
Here is where content creation is radically altered. One is able to dominate the smaller ponds to stand out. Instead of competing with the MrBeast accounts, one's expertise can shine through. The challenge for most on the traditional platforms is their accounts are not hubs. My YouTube channel is a prime example of this.
Within a smaller pool, one becomes that. With the monetization process being developed, we see the ability for content creators to leverage from that of inconsequential node to hub.
This is the process I see unfolding. It is in alignment with decentralization and also following the basics of networking. Those who are able to start aligning their actions with this concept will likely be in a strong position within a few years.
For now, it seems the majority are looking to slug it out with the MrBeast's of the world and try to get attention in the vast ocean of Web 2.0 social media.