• Theo Priestley

The web3 Creator Economy

Remember when your parents or guidance teacher told you that being an artist was not a wise career choice, or that you’d never make any money?

Yeah, that's all about to change.

The numbers surrounding the creator economy are difficult to estimate in full, given the sprawling reach of the term “creator,” which can refer to anyone from streamers, concept artists and people taking 3D scans of objects for Sketchfab. There are approximately 50M creators today, according to SignalFire but I reckon that’s a lot more as the NFT marketplace boom kicks into overdrive. On the creator front, each platform has seen money flow into the space:

  • The top-performing YouTube channels reaped $211M between June 2019 and June 2020, Forbes reports.

  • Famous Instagram influencers like Huda Kattan or Eleonora Pons can net up to 6 figures per post.

  • The top writers on Substack can rake in as much as $1M annually.

  • Since 2011, Gumroad’s creators have earned more than $460M selling their content on the platform.

One problem is that while democratisation allows anyone to create content in whatever form, not everyone can make a living from it. There will always be a top-tier that others aspire to be like - the failed promise of the gig economy has already proven that.

Creator platforms flourish when they provide opportunity for anyone to grow and succeed. Less wealth concentration means less risk that a would-be competitor could poach top creators and threaten the entire business. Li Jin, Atelier Ventures

But the metaverse potentially changes all that reducing the risk for content creators because they’re not only in control of content, they're in control of the metanomics economy behind it too.

User-generated content (UGC) is a fundamental layer of a successful metaverse approach. This is a part of the creator economy that is vital. Epic knew what it was doing when it bought Sketchfab - it already has the tools to build the environments we’ll be immersed in and now it has the community content to populate it. Fragmented NFT marketplaces have nowhere to go just now and show a lack of long term strategic thinking. A creator economy without utility is useless. These LiDAR and photogrammetry scans in Sketchfab are going to be so important going forward as the capture resolution evolves - creator communities will populate the metaverse with their models for world builders. When will smartphone OEMs start thinking more about LiDAR and photogrammetry and prepping for metaverse applications instead of folding screens and gimmicks? I wish Google would rival iPhone with the Pixel in this regard for example. I can see Facebook moving in this direction too soon.

What is important to understand is that this content can be consumed and interacted with in all realities - they should not be bound to one type of metaverse. If I am in a 3D virtual environment via a web browser, others using AR, VR, or even a desktop client should be able to interact with the object at the same time, collaboratively. Which window you use to peer into the metaverse is inconsequential.

Will Burns, an advisor to SuperWorld made a great point about UGC and how creators will build upon work already done by others too.

This is why I segment the prosumer economy into three tiers based on involvement and expertise. 1. Kit-bashing creator: Buys or imports the content from others to use in creating their environment via market. Minimal technical knowledge required. 2. Asset Creator: Creates the raw assets or creates the combination items to sell to #1. More technical but scope limited 3. Devs: cracking open Unity/Unreal to create the experience in part or whole to compile as amalgamation. High technical skills, cross discipline

UGC is also the approach that has made Roblox such a success too. There are millions of players building millions of worlds on the platform and populating it with millions of user-generated objects. Roblox was a pioneer when it came to direct creator payments: In 2013, it launched a Developer Exchange program, which not only allowed outside developers to create games and digital accessories but also to split their profits 50/50 with the company.

The amount of money Roblox spends on UGC developer payouts has grown every year, last year, the company paid $250 million to developers; more than 1,250 creators made at least $10,000 through virtual sales in their Roblox games.

Playerstate is taking a leaf out of the Roblox business model and launching a platform for communities of gamers to produce user-generated content for their favourite video games. The company said it is different because its users can discover creative projects that inspire them and get involved, or they can create their own projects and rally the people they need to bring their projects to life.

The metaverse also represents the opportunity to completely rethink what social networks have become of late. Where big platforms are behemoths driven by algorithms we’ll see smaller networks form around fandom. Creators will own their audiences, not the platforms, allowing them to monetise their slice of the economy with NFTs. Content will no longer be flat - it’ll be immersive and interactive.

In The Sandbox, creators can monetize assets and gaming experiences on the blockchain. On Immutable X, players can buy, sell, or trade digital items on Ethereum in-game worlds like Gods Unchained. And in Axie Infinity by SkyMais players can earn income — hence the phrase “play to earn” — through NFTs by breeding and trading digital pets called Axies.

I think it may not be enough to simply do more photos, text, and video Instead, new platforms will emerge that let people author 3D content more easily — and maybe put it into a game. Or interactive content. Or NFTs. And of course audio. All of these new forms of media will probably look like toys at first, but they may catch on in a big way. Andrew Chen

The creator economy also took a huge step forward this week with the SuperRare announcement. Welcome to SuperRare 2.0. Not a humble update, but a seismic shift driven by three major product advancements: SuperRare Spaces: Independently curated storefronts on SuperRare. For the first time, curation (and commissions) will be opened to new voices chosen by the SuperRare community, and beyond the SuperRare Labs core team. SuperRare DAO: A decentralized organization governed by $RARE holders and the SuperRare Governance Council tasked with overseeing SuperRare Spaces, the community treasury, and the platform’s future. The SuperRare Governance Council is a group of nominated community members that implement decisions based on the votes of $RARE token holders. Sovereign Smart Contracts: Independent artists on SuperRare can now deploy custom smart contracts and import artworks minted elsewhere. And finally, we’re excited to announce the release of the instrument through which Spaces and the DAO will be governed: the $RARE curation token. Now we’re seeing the beginnings of the next phase of UGC - I see SuperRare’s move being replicated by other NFT market platforms like OpenSea as they hand more control over to artists and creators. But it doesn’t stop there because metaverse economies in the hands of creators have the ability to affect the real world around them with positive results.

There are reports of players around the world combating economic decline through these online economies.

In the Philippines, which was hit hard by the pandemic, GDP contracted 9.6% in 2020, the largest annual decline ever recorded since data collection began in 1946. The population of Catanabuan turned to play Axie Infinity to earn money. The ability to farm and trade Axies gave citizens the means to earn money through the game, allowing them to afford to live and eat. Axie farming’s long-term viability is yet to be seen post-pandemic, but in a struggling economy, any form of potential income can be a game-changer, especially when that income can be earned from the safety of home.

One final point - the creator economy can tap into the fans they generate in new ways. In a sense, the metaverse will be filled with very niche and unique worlds built purely to engage with fandoms.

For example, a new BTS-Backed social network for fandoms called Fave has recently launched out of beta and wants to change how artists and creators reach their fan base. Fave is creating a safe space for fans to do things like share videos, compete in prize-unlocking contests, and go into business with their beloved stars via an “Etsy for user-generated merch” marketplace. Another key aspect to what Fave is doing revolves around giving artists and creators more powerful, detailed data about their fans. Why are they a big fan? How new are they? And how much influence do they have?

Remember what I said before about Generation M?

  • Virtual goods, brands and experiences are more valuable to them than their physical equivalents.

  • They’ll base their career choices around what paths are available to them to be part of the metaverse - whether that’s building it or building a business in it.

  • They will drive and own the new creator economy.

As much as various technology trends are converging to build the metaverse, so too are the societal trends coming around to fully empower creators and artists again.

If you’re an artist and you’re reading this, what a time to be alive.

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