I think either of those would potentially open up more of the long tail but I do think there is a long tail that is viable purely with the initial payout that is not viable any other way right now. This post would even be an example, were this some other interesting cryptocurrency project I was thinking about I probably wouldn't make the effort to clarify it in my head and write it out without the incentive Steem provides.

I would also argue that even given only an initial payout which may not be ideal, the alterative options for unposted content right now are generally zero chance of any payout.

Having said that it would make a lot of sense for both 1 and/or 2 to happen. If we took an existing social media site as an example, like Facebook, the site could even be ad supported, then the revenue from those ads used to buy Steem that were then distributed as Steem power based either on the number of views or some other measure.