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As with most game-changing 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 and what they know and do in new and exciting ways.
As a result, Web3 has attracted billions in VC funding for projects and startups spanning its various components, including blockchain, cryptocurrencies, 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 inherently reliable use and storage of decentralized data, knowledge and value.”
If you’re a creator, this definition should be music to your ears. With issues of control, privacy, security, ownership, and trust continuing to plague the current iteration of the Internet, Web3 offers a beacon of hope. Reading between the lines, what IDC is saying is that Web3 will provide a better dynamic between those who create and those who consume. It will enable the seamless, transparent and cost-effective interactions and transactions needed to grow the creator economy.
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The problem with centralized platforms
As it stands, the current ecosystems powered by most creators are completely centralized. And although some creators have made a living off of these platforms, ultimately, the real money is the platforms themselves. Take YouTube for example.
According to Statista, in the first quarter of 2022 alone, YouTube’s ad revenue worldwide reached $6.9 billion, a 14% year-over-year increase. However, despite this success, many YouTube creators can’t quit their day jobs. According to an August 2022 report, 97.5% of YouTubers fail to earn $12,140, the recognized US poverty line.
To be fair, YouTube isn’t the only platform with this dynamic. Despite popular platforms making billions, the vast majority of creators struggle to make a living. Linktree data revealed that of the 200 million people involved in the creator economy, only 12% of those doing 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 per year.
Most creator platforms own the audience, data and revenue. The primary way creators make money is by securing sponsors or attracting huge numbers of fans and followers to ads placed by a platform’s algorithm, which some believe favors some creators over others. Web3 essentially cuts out these middlemen and allows creators to connect directly with their audience and earn most of the revenue for themselves.
In essence, the mantra for current creator ecosystems is that creators create the content and companies make money. At any moment, these ecosystems can change their algorithms and rules and take away the audience (and monetization) a creator has painstakingly built over the years. And if a creator decides they want to take their audience somewhere new, they can’t. They don’t have access to the data they need to connect directly with their audience outside of the platform environment.
Web3 is set to change the current dynamic of the Internet by allowing creators to monetize their work directly, without the intervention of a third party. But you may be wondering, “How, exactly, does this work?”
Making Web3 work for creators
The key to making the most of Web3 as a creator starts with finding the right platform. And of utmost importance is that you maintain 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’s the approach we’ve taken at Kajabi, and according to a recent study, Kajabi customers make an average of $30,000 a year.
Buying NFT Rarible is another good example when it comes to controlling the money you and your team earn. With Rarible, if you have a group of partners, you can add their wallets to the smart contract and share royalties from future sales. This way, the profit equation 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 tradable tokens are an interesting way for creators to monetize their work and themselves with their communities, creating an economy around everything they do. Essentially, fans and investors can buy your creator coin, sell it and use it as currency on the platforms built on this blockchain.
Decentralized social platforms like Mastodon and Diaspora take this a step further. With these platforms, creators retain full ownership of their content and identity and can monetize through their fans rather than advertisers. Fans invest in their favorite creators and each account has a monetary value that can increase or decrease. In addition, what belongs to these platforms goes with the owners from platform to platform.
We are in the early stages of Web3. And in the same way that artists help revitalize neighborhoods, creators will drive Web3 forward. Without creators and their fans as early adopters, Web3 growth will stagnate and the centralized web will become more controlled. That’s why there’s no time like the present to start your Web3 journey.
Sean Kim is president and Chief Product Officer at Kajabi
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