Thread by @ljin18

Dropping the last essay of 2021 💥

The Web3 Renaissance

This is the story of how the web2 internet broke the business model of media, and how web3 holds promise to tilt the scales in favor of creators.
every.mirror.xyz/y_WLA-Tk3VF5uP…

Written in collaboration with @kplikethebird and @every, this essay is available as a collectible NFT on Mirror!

Strong "The medium is the message" moment
every.mirror.xyz/y_WLA-Tk3VF5uP…

25 years ago, Bill Gates wrote an essay, "Content is King," that predicted a flourishing of user-generated content on the internet, but challenges in monetizing it.

His prediction has been spot on in both regards.

Most creators aren’t making a living today.

The top 1% of all streamers earn more than half of all revenue on Twitch.

1% of podcasters earn the majority of podcast ad revenue.

This isn't an inevitability of nature—it's a result of business models & platform design in web2.

The pre-internet era favored publishers: gatekeepers like movie studios and newspapers that created and distributed content.

That shifted with the internet. The business model of the web2 era—advertising—favored platforms that amassed audience attention and control user data.

The ad-based revenue model has had enormous implications for how platforms are designed:

- Views are funneled to content & creators that are already popular, creating a power law in success.

- Networks lock users into their services to amass corpuses of proprietary data.

There are enormous implications of the web2 internet on content creators as well:

- Creators are compelled to seek the biggest audiences & create content that attracts advertisers

- Creators are driven to create content that's viral and attention-grabbing vs. niche and in-depth

The biggest impact of the web2 internet may be the creators who don’t exist and the creations that were never made because they have no viable business model.

Web3 is all about tilting the scales of power and ownership back toward creators & users.

That happens in 4 ways:

1) By introducing digital scarcity and restoring power to creators

2) By making supporting creators an act of investment, not just altruism (patronage+)

3) By introducing new programmable economic models that spread wealth across the creator landscape

4) By creating pathways for creators to own the platforms themselves

1) Digital scarcity

Scarcity gets a bad rap, but it is about more than just lack of consumer choice: it’s about producer power.

NFTs enable creators to impose digital scarcity and uniqueness, leading to more effective monetization of superfans.

https://twitter.com/ljin18/status/1471139238070652932

Music NFTs show the power of digital ownership in action:

On @catalogworks and @soundxyz_, fans are purchasing NFT songs for thousands of dollars to feel closer to the artist, with creators earning what previously would have required tens of millions of plays.

Excitingly, the introduction of scarcity through NFTs doesn’t mean that access to the underlying media is limited (as it would with paywalls or subscriptions).

The actual media underpinning NFTs can remain public goods, available to be consumed by anyone at no cost.

2) Patronage+

Supporting creators becomes an investment, not just an act of altruism. The possibility of profit amplifies fans' incentive to support a creator, and also attracts speculators—both of which have an incentive to help the creator grow.

https://twitter.com/jessewldn/status/1355165547441303554

Example of patronage+:

@mariogabriele crowdfunded 20 ETH for analysts to create a deep-dive about @coinbase. Crowdfunders received proportional stakes in the work, which was minted as NFTs.

The NFT sales totaled 28.6 ETH, a return of 43% to crowdfunders in just a few weeks.

3) New programmatic economic models

Creation is often a collaborative act, but web2 systems don't reward or track this, with value often accruing to users who went viral.

This has led to strikes among creators who feel that their contributions go unrecognized and uncredited.

The promise of tokenization means that it’s possible to build in royalties such that the entire chain of attribution is able to profit from a collaborative work.

See @viamirror or @withFND's splits functionality for early examples

4) DAOs and community ownership

A root cause of inequality in the creator world is the outsized control that platforms exert through ownership of the means of production & distribution.

The most direct way to challenge that control is to change who owns the platforms.

In a DAO, governance is decided by the members, and there are no external shareholders pressuring for profit extraction.

In a creator DAO, the owners are the participants: those who make the content, distribute it, and consume & value it (eg @ElektraDAO @obscuradao @seedclubhq)

Beyond DAOs, the inherent interoperability of web3 makes platform lock-in likely to be a much less pernicious problem than it is in web2.

The atomic unit of web3 is the account, which users own and control with their key pair and can be used across any app or protocol.

Ownership is the most fundamental component for a healthier creator economy:

https://twitter.com/ljin18/status/1408103654863814657

Down the line, when everyone can receive upside and value in accordance with their contributions to a community, the lines between creator and fan blur, turning the creator economy ➡️ community economy.

https://twitter.com/ljin18/status/1454096630559428611

We're still in the early innings, but I believe web3 has the potential to unlock incredible opportunities for everyone who contributes and creates on the internet: a true Golden Age of content that we’ve all been looking forward to.

Tons more examples and details in the post, which you can collect as an NFT:

every.mirror.xyz/y_WLA-Tk3VF5uP…

Related reading:

My essay from last December about the missing creator middle class, and ten strategies to help build it.
hbr.org/2020/12/the-cr…