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As with most groundbreaking innovations, there is a mixture of excitement, speculation and confusion about the role Web3 technologies will play in the evolution of our digital lives. For Web3 evangelists, 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 of VC funding for projects and startups that span its various components, including blockchain, cryptocurrency, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), AI, and the semantic web. And for the creators, the size and scope of investments in these new developments is exciting news.
What is Web3, anyway?
Before jumping to what it means to 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 supports the natively trusted use and storage of decentralized data, knowledge and value.”
If you are a creator, that 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 offer a better dynamic between creators and consumers. It will enable the seamless, transparent, and cost-effective interactions and transactions needed to grow the creator economy.
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The problem of centralized platforms
At present, the current ecosystems that most creators are feeding are fully centralized. And while some creators have made their living from these platforms, in the end, it is the platforms themselves that make real money. Take YouTube for example.
According to Statista, in the first quarter of 2022 alone, YouTube’s worldwide advertising revenue reached $ 6.9 billion, an increase of 14% year-over-year. Yet despite this success, many of YouTube’s creators can’t quit their daily jobs. According to a report from August 2022, 97.5% of YouTubers fail to earn $ 12,140, the poverty line recognized in the United States.
To be honest, YouTube isn’t the only platform with this dynamic. Despite making billions of popular platforms, the vast majority of creators struggled to make a living. Linktree data revealed that of the 200 million people who participate in the creator economy, only 12% of those who do it full-time earn more than $ 50,000 annually. 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 can 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 eliminates these middlemen and allows creators to connect directly with their audience and earn the bulk of the revenue for themselves.
In essence, the mantra for today’s creator ecosystems is that creators create content and companies make money. At any moment, these ecosystems can change their algorithms and rules and win over the audience (and monetization) that a creator has meticulously built over the years. And if a creator decides he wants to take his audience to a new place, he can’t. They don’t have access to the data they need to connect directly with their audience outside the platform environment.
Web3 is set to change the current dynamics of the Internet by allowing creators to monetize their work directly, without the interference of third parties. But you may be wondering, “How, exactly, does it work?”
Putting Web3 to work for creators
The key to leveraging Web3 as a creator begins with finding the right platform. And of the utmost importance is that you remain in full control of your content and the revenue you earn. It is also important that the platform you choose provides the tools and services you need to run your business. This is the approach we have taken at Kajabi, and according to a recent study, Kajabi clients earn an average of $ 30,000 per year.
The NFT Rarible market is another good example when it comes to controlling the money you and your team make. With Rarible, if you have a team of collaborators, you can add their portfolios to the smart contract and share the royalties of future sales. In this way, the earnings 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 fungible 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 your creator coin, sell it, and use it as a currency in platforms built on that blockchain.
Decentralized social platforms like Mastodon and Diaspora go one step further. With these platforms, creators retain full ownership of their content and identity and can monetize via their fans, not advertisers. Fans invest in their favorite creators, and each account has a monetary value that can go up or down. Also, what is owned on these platforms goes with the holders from one platform to another.
We are in the early stages of Web3. And in the same way that artists contribute to neighborhood revitalization, creators will drive Web3 forward. Without the creators and their fans as early adopters, Web3’s growth will stagnate and the centralized Web will only become more controlling. That’s why there is no time like the present to start the journey to the Web3.
Sean Kim is Kajabi’s President and Chief Product Officer
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