After influencers took center stage in the creator economy throughout the last decade, we are now seeing a new breed emerging: creators. They encompass much more than just another self-centered influencer, and the role is much more inclusive. Let’s take a look at what it means to be a creator and what is needed for them to thrive in the new economy.
Social media as a driver
Creators have become the backbone of social media. Without their content, social media users will walk away and search for other places to find engaging information and content. As a result, social media channels are starting to offer financial rewards to creators to keep them on their channels.
But a creator can be many things: somebody who writes content, works with videos (like on TikTok or YouTube), or makes music or art. Although there is no real consensus on what or who a creator is, as long as you manage to produce any form of online content, you qualify. Anything beyond that is still out in the open.
What is not out in the open but is also part of this trend are intangible assets. In innovative enterprises, they are already considered the most valued assets in the world. What makes them particularly interesting is their long-term potential, which goes far beyond the current market state. Besides holding a high inartistic value, investors are offered opportunities to speculate on their potential price growth.
The rise of the creator economy
The Covid-19 pandemic saw a massive increase in user growth and content consumption, especially on the big player social media platforms. The giants of social media woke up and realized the potential that was happening right under their noses. First, the influencers created a large following, later the creators. Platforms like Vine and Instagram played an important role. Social media started to grow, and creations began to explode.
According to GlobeNewswire, in 2021 the creator market, combined with influencers, is worth a whopping $13.8 billion. With a daily increase in the creator market, with hundreds of new start-ups, we are looking at a market worth $104.2 billion.
Problems that creators are facing
All this sounds great, except for one issue. The creators are incapable of monetizing their content. This means an increase in the number of intermediaries taking their cut in any potential profit-making openings, especially given that monetization options for creators were hard to find or non-existent.
There are 50 million creators out there: over 47 million amateurs and over 2 million professionals. The big social platforms were forced to act and start to offer incentives for monetization.
As a result, Facebook will pay out over a billion dollars in 2022 to users across its various platforms.
There are various alternatives out there to the Internet giants that are trying to make things a little fairer for the creators. For example, Substack and its paid newsletter subscriptions, or Patreon providing artists with a way to earn income online through subscriptions.
However, these platforms are intermediaries that still take a rather large slice of the value.
Role of intangible assets
Intangible assets can be referred to as knowledge assets or intellectual capital. Different companies, associations, and even teams started to use non-fungible tokens (NFTs) as a part of their marketing strategy. For example, The Great British Olympic team has released an official NFT collection and sold via its website.
For the lesser-known creator, it is crucial to maximize the value from their intangible assets. One of the ways this can be done is by using an NFT. These are digital containers that prove ownership and are entirely unique.
An NFT is an excellent tool for a creator. With the digital scarcity of an NFT, there is at last proof of ownership for files or pieces of content or data. Intellectual property can now be digitally traced, and the creator can keep making revenue when an NFT is re-sold. An NFT becomes a digital asset that both the user and the creator can profit from. This new era forms equality for the creators and the users.
NFTs have become a rising star for the creator economy. A good measure of their popularity is the Google search trend for the word NFT over the last 12 months.
NFT: new-found technology
NFTs are looking to shape the creator economy. This is because when you store intellectual property in an NFT, it allows you to track ownership. The blockchain will keep track of all NFT movements, or every time an NFT changes ownership. As a bonus, an NFT can be programmed so that every time an NFT is sold, the original content creator receives a percentage of each sale.
This allows the creator to not only follow how and when this digital asset changes ownership, but also receives a commission from each sale. This is in contrast to traditional sales of art or intellectual property. It is only when the asset sells for the first time, the artist receives financial compensation. Another advantage that an NFT offers, is the possibility of fractionalizing an NFT. This will make an expensive, single NFT, affordable for various interested parties.
Sending back the commission is an automated process. Hence, NFTs can be sold anywhere.
NFTs are so new that we don’t yet know all the use cases for them. We do know that they are infinitely programmable. This makes them very exciting digital assets. With the intangibles mentioned before, the potential for creators seems limitless.
Blockchain technology allows for tokenization into NFT, along with decentralized governance of intangible assets. The decentralized aspect is vital because it will drastically reduce the influence of centralized platforms and the value they can assume.
There are different NFT marketplaces; one sample is the Paras NFT marketplace. However, with their curated approach, they centralized the appraisal of assets. This goes against the idea of decentralized governance and at the cost of transparency.
There are also specific protocols that are being designed to tokenize intangible assets into NFTs. DEIP is one of these protocols, enabling the discovery, evaluation, licensing, and exchange of intangible assets. Technology like this will allow for greater liquidity to flow into intellectual creations and bring more participants in the creator economy.
The creator economy in the future
At this moment, the creator economy is still developing. However, investors and corporations are paying attention to how things will pan out in the future. The investments in this space are proof, and the chase for creators is on.
While platforms like Patreon, OnlyFans, or Substack are finding more equitable ways of financing their platforms, it will be interesting to see how the big tech platforms, like Facebook or YouTube, will now react to keep the creators. In contrast, the creators may be much more platform-agnostic and become independent brands, creating less dependence on a specific platform.
Monetization seems to be the main keyword, and platforms will have to roll out more options to keep the creators and their associated fan base onboard.
Blockchain, digital assets, and NFTs are all coming together; it will be an exciting to see how things pan out in the coming years.