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As with most groundbreaking innovations, there is a mix of excitement, speculation and confusion about the role Web3 technologies will play in the evolution of our digital lives. For Web3 evangelists, the technology promises to help people regain control of their data and monetize who they are, what they know and do in new and exciting ways.
As result, web3 has raised billions in VC funding for projects and startups spanning its various components, including blockchain, cryptocurrency, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), AI, and the semantic web. And for creators, the size and scope of investment in these new developments is exciting news.
What is Web3 anyway?
Before we get into what it means for creators, it’s good to have a working definition of web3. IDC defines it as “a collection of open technologies and protocols, including blockchain, that support the natively trusted use and storage of decentralized data, knowledge, and value.”
If you’re a maker, that definition should be music to your ears. With issues of control, privacy, security, ownership and trust that continue to plague the current iteration of the Internet, Web3 offers a beacon of hope. Reading between the lines, what IDC says is that: web3 will create a better dynamic between those who create and those who consume. It will enable the seamless, transparent and cost-efficient interactions and transactions needed to grow the creative economy.
The problem with centralized platforms
As it stands, the current ecosystems that power most creators are completely centralized. And while some creators have made good living thanks to these platforms, in the end it’s the platforms themselves that make the real money. Take YouTube for example.
According to StatesmanIn the first quarter of 2022 alone, YouTube’s global ad revenue reached $6.9 billion, up 14% year-over-year. But despite this success, many YouTube creators are unable to quit their day-to-day jobs. according to an Report August 202297.5% of YouTubers fail to make $12,140, the recognized US poverty line.
To be honest, YouTube is not the only platform with this dynamic. Despite popular platforms making billions, a vast majority of creators struggle to make a living wage. Linktree data showed that of the 200 million people who participate in the creative economy, only 12% of those who do it full-time earn more than $50,000 a year. The company also found that 46% of full-time creators earn less than $1,000 annually.
Most video platforms own the audience, data, and revenue. The main way for creators to monetize is by recruiting sponsors or attracting huge numbers of fans and followers to ads placed by a platform’s algorithm, which some feel favors certain creators over others. Web3 essentially eliminates these middlemen and allows creators to connect directly with their audience and earn most of the revenue for themselves.
Essentially, the mantra for today’s creator ecosystems is that creators create the content and businesses make money. At any time, these ecosystems can change their algorithms and rules, taking over the audience (and monetization) that a creator has painstakingly built up over the years. And if a creator decides they want to take their audience to a new place, they can’t. They do not have access to the data necessary to engage directly with their audience outside of the platform’s environment.
Web3 will change the current internet dynamics by allowing creators to monetize their work directly, without the involvement of a third party. But you may be wondering, “How exactly does that work?”
Putting Web3 to work for creators
The key to harnessing web3 as a maker starts with finding the right platform. And of utmost importance is maintaining full control over your content and the revenue you earn. It’s also important that the platform you choose provides the tools and services you need to run your business. That is the approach we have taken at Kajabi, and according to a recent researchKajabi customers earn an average of $30,000 per year.
NFT Marketplace rare is another great example when it comes to managing the money you and your team earn. With Rarible, if you have a team of employees, you can add their wallets to the smart contract and share the royalties of future sales. That way, the profit comparison is completely transparent and no one is left out.
Another model to consider comes from a company called rally, which allows creators to launch their own creator coins. These replaceable tokens are an interesting way for creators to monetize their work and themselves with their communities by creating an economy around everything they do. Essentially, fans and investors can buy, sell and use your creator coin as currency on the platforms built on that blockchain.
Decentralized social platforms such as: mastodon and To spread take this one step further. With these platforms, creators retain full ownership of their content and identity, and can monetize through their fans, not advertisers. Fans invest in their favorite creators and each account has a monetary value that can go up or down. Moreover, what is owned by these platforms with holders goes from platform to platform.
We are at the beginning of Web3. And in the same way that artists contribute to the revitalization of neighborhoods, creators will drive Web3 forward. Without creators and their fans as early adopters, Web3’s growth will stagnate and the centralized web will only become more controlling. Therefore, there is no time like the present to embark on the Web3 journey.
Sean Kim is president and chief product officer at Kajabi
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