The Content Creator Economy. Part II

ontent consumption and interaction are about to change. But before diving into that, let’s set the stage.

Today, we have two types of content platforms. On the one hand, there are professional platforms, which focus on high-quality creation, production, and distribution. Their creators and producers are compensated for their work. Examples include Netflix, AppleTV, HBO, Disney+, Spotify, and others. This also extends to newspapers, websites/apps, and other publications operating under a similar model. These platforms are the heirs or evolutions of cable TV, print newspapers, and a production model that, while evolving, remains fairly established.

On the other hand, we have what I’d call free or hybrid platforms, where content is generated partly by new professionals or semi-professionals but mostly by non-professionals or users (commonly referred to as User Generated Content). There’s no minimum quality standard, they’re free for users, and there’s no direct compensation from the platform to creators, whether professional or not. This category includes Facebook, Instagram, TikTok, Twitter, Twitch, and Clubhouse. YouTube is an exceptional case, operating under a hybrid model, which is a major factor in its success.

For these platforms, the economic model is sponsorship, where advertisers subside users' access to content through ads. Users don’t pay with money but with their attention. This model is highly lucrative for platforms because they “charge” for access to content that costs them nothing to produce. It’s acceptable for consumers—but what about creators?

The Reality for Creators

We spend time on platforms like Facebook, Instagram, TikTok, YouTube, and Twitter because of others' content. Sure, sometimes our friends share their vacations or culinary adventures. But often, it’s semi-professionals or professionals whose content interests us and feels relevant. Some platforms, like YouTube, combine both systems, allowing creators to benefit from ad and subscription revenue. Like Spotify, creators need massive views or plays to make money. Only a select few make substantial money.

The reality is that most creators earn very few to no income from their content. Platforms have built massive business models by “buying” third-party content for free and selling it to viewers through ads.

A New Model: Incentivized Platforms

The result is a third kind of platform, which I call incentivized platforms. The leading examples of this new model are OnlyFans to some extent, and Patreon. These platforms allow creators of all kinds to monetize both their content and their intangible assets (such as access to the creator, exclusivity, etc.). More of these platforms are emerging, such as Cameo and FanHouse. It’s true that 90% of OnlyFans’ revenue comes from the top 10% of content creators, and the vast majority are adult performers. But on the internet, adult content is like the canary in a coal mine—it often foreshadows changes a few years later.

With Patreon, the type of creator is different (as is the model), but it also follows the Pareto Principle—a small percentage of creators generate the majority of revenue.

What’s Next? Blockchain, NFTs, and Tokenization

It’s becoming increasingly clear that change is underway. For instance, Twitter has introduced a tipping service (similar to what Clubhouse is testing) and premium accounts, where users must pay to access or follow certain tweets/accounts with over 10k followers. Rumor has it that Facebook is considering something similar.

Added to this shift are blockchain, NFTs, and tokenization. Blockchain, and specifically NFTs, enable the secure and immediate tokenization, sale, exchange, and distribution of real and virtual assets. In the long term, this will have a significant impact on economic and legal transactions. In the short term, it will affect easily transferable and intangible assets, which benefit from tokenization and security—such as art and digital content.

Society often overestimates technology's short-term impact (and then grows disillusioned) while underestimating its long-term effects (which catch us by surprise). I believe this will happen with blockchain in general and NFTs in particular. NFTs (and tokens) allow something that was previously more difficult: conditional and/or exclusive access to content. An NFT can simultaneously act as an ownership title, an asset, and a key.

The Future of Content Platforms

As content platforms evolve toward hybrid systems for compensating professional and non-professional creators, combined with the tokenization of intangible assets, we can foresee the rise of platforms where access to content is not only monetized but also conditional. For instance, access might depend on holding a minimum number of tokens or owning a specific NFT.

Similarly, through tokenization, we can compensate (and thus incentivize) content creation but also consumption or interaction—essentially “paying” users for their attention. This is like many games offering rewards for watching an ad. There have been few initiatives in this area so far. However, the first blockchain-based social network, called Minds, began experimenting with these ideas a few years ago. While the project struggled to attract creators and content, the dynamics it established could serve as a strong indicator of what’s to come.

What’s Next?

Now that we’re seeing what will happen in the content ecosystem, it’s time to consider how:

• How will these solutions be implemented?
• What will users be willing to pay or do?
• What will attract—or fail to attract—creators?

Good questions for another article.

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