Web3 and the Future of the Creator Economy

Web3 and the Future of the Creator Economy
Nicholas Green, Unsplash
28 August 2022

For many creators, the road to a full-time career is a battle of attrition. Resources can be tight, deadlines are often self imposed and the ability to self start and get on with the task at hand is often easier said than done.

Take the current web2 music landscape for example. For all its conveniences and networking promises, it’s still largely unrewarding for independent creators and leaves too much room for hope. Musicians, like all creators, are often the last to see any tangible reward for their efforts. Royalty payments are mostly crumbs that can take months to process, streaming revenue is at record lows and cutting through the noise; building an audience and getting in front of fans is an uphill battle.

Or look at social media platforms like Instagram or TikTok. No matter how viral a photo or video becomes, the ones behind that content see slim or zero returns, while the platforms themselves continue to build out their monopolies on the back of consumer data. That said, web3 is still at a nascent stage and the scale of web2 cannot be entirely ignored. The best example is that all web3 platforms still maintain a presence on social media platforms like Twitter and Instagram while simultaneously trying to replace them.

2.0 vs. 3.0

Currently, the size and scale of web2 juggernauts in the creator economy is staggering. According to one study, across the three main web3 metaverse platforms (Sandbox, Opensea, and Decentraland), the average Monthly Active Users (MAU) is 263,000 users per platform. Across six web2 platforms (Meta, Spotify, Twitter, eBay, Minecraft, and Roblox) the average MAU is 492 million users. It would make sense to continue slowly building one’s community in a stable environment.

For many creators who aren’t inclined to wait, the obvious step forward is web3. As the infrastructure is built out and more creators are becoming fluent, they’re seeing the massive benefits. Sales of digital music collectibles – direct value flow, are now possible in more meaningful ways than before; while digital merch and metaverse events are becoming more sophisticated. Web3 social media platforms are taking the tried and tested mechanics (likes, shares and comments) and tokenizing them, turning them into tangible rewards that pay the creators behind the posts. Creators that are willing to educate themselves and take part are starting to unlock so much potential.

The current model of music streaming is a slow, tedious process that gives back to creators just a fraction of what they put in. Going through a distributor to Spotify is a costly, unrewarding process. With ten streams paying approximately US$0.004, creators need to see hundreds of thousands of streams on a regular basis before any sizable return is made. Not only that, the time to process that revenue can range anywhere from a couple of weeks to several months. For small, independent creators, these numbers won’t equate to any longevity, certainly not a career. It just isn’t feasible.

Web3 technology has a lot of promise. Creators can price, package and market their work in whatever way they wish; selling directly to their fanbase; eliminating the need for those, who are taking out a huge chunk of the profits. And this isn’t some far off pipe dream; the infrastructure already exists, and more creators are flocking to this model every day.

OpenSea is just one marketplace that has seen incredible growth in the past twelve months, with an impressive music catalog growing daily. MODA DAO, which held its launch party at the recent NFT.NYC, is showing just how simple it is for artists to sustain themselves with web3. In less than a few minutes, fans can purchase digital music collectibles through their phone and have it in their web3 wallet straight away. For the listener and the broader music community, the impact is clear: music, instantly. For creators, the long term picture might not be so clear, as pioneers continue to navigate the full applications and capabilities of this new technology. One thing that isn’t up for debate however, is the potential revenue for creators.

When it comes to social media content creators and their communities, the Friends With Benefits DAO (FWB) is just one platform harnessing web3 technology in order to reward those creators. Through FWB, users are incentivized to collaborate and share knowledge in like-minded communities in return for $FWB, the DAO’s native token. Having their own token enables them to incentivize community participation and generate value collectively. Every member who participates holds $FWB, ensuring a mutual commitment to the projects and to everyone involved. When everyone contributes to the success of the group’s initiatives, everyone stands to benefit.

2.0 + 3.0

Put plainly, web3 removes the friction that has plagued the incumbent system for decades. The pain points and forks in the road are all eliminated with Web3 technology. Just as too many cooks spoil the broth, too many players spoil the returns. The founders of these web3 platforms are all too familiar with the pains creators go through in order to see a return on their work, and as such have lowered the bar (and the price) for entry substantially.

This in turn is letting creators do what they do best, without having to worry if everyone is being paid on time, researching the right platforms and partners, or bending over backwards for an algorithm that couldn’t care less about their success. These platforms are giving creators direct access to their audience and, in turn, their earnings. In the same way that the dot-com era did away with brick and mortar stores, web3 is trimming the fat of the creator industry.

Web2 platforms, once the fast-moving game changers, are now consigned to be dinosaurs. But until the day they die out or evolve, these are still massive beasts who currently rule the world. The smart money is to explore the possibilities of the decentralized future while hedging one’s bets with the current mainstays.

Jimi Frew

Jimi Frew
With 12+ years working as an independent music producer, DJ, and entrepreneur, Jimi Frew knows the music industry inside out. His club records have dropped worldwide, getting spins from Tiesto, Martin Garrix, David Guetta, Hardwell, Dada Life, R3hab, Morgan Page & Moguai amongst others. He now focuses on using the latest technologies to bring the music industry out of the dark ages. Launching emanate.live and Music 3 infrastructure Moda Dao, which both push a new narrative of possibilities for creator empowerment in the web/music 3.0 space.

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