what-is-the-creator-economy

What is the creator economy: in-depth overview

Not so long ago, sitting in front of a TV and changing the channel hoping to see something interesting was the norm. Most of the time, it was a desperate and overwhelmingly dull effort.

You might have had the great fortune to find something worth watching or pre-record your favorite shows. Otherwise, if you hadn’t given up altogether, you were bound to sit and stare blankly at a nonsensical show until you fell asleep.

Today that has changed dramatically. Content of all possible kinds surrounds us. There’s an almost unlimited amount of information on any topic that could arouse your interest, be it articles, videos, blog posts, how-to guides, apps, infographics, etc.

Such transformation has been driven primarily by giant corporations operating in various areas of the content industry. Facebook, Google, Netflix, and many other companies have provided the commercial platforms, the laws and regulations, and the content for the public.

No less a significant role in content industry growth is played by small businesses and, surprisingly, one-person teams that have turned their passions and ideas into a service or product.

This remarkable transformation of individuals from consumers to content producers is what keeps the creator economy alive. And that’s what we’ll review in this article. 

Read on to learn what the future of the content industry will look like and how DEIP can help you find your place in the creator economy sector.

Quick history

What is the creator economy? To answer this, we need to go back a bit to understand the meaning of the creator economy and how it will evolve in the context of Web3. 

Until the 1950s, the world economy mainly followed a manufacturing-centric approach. Workers used their physical skills to make ‘things’. In the 1950s however, the transition to a consumer economy gradually began—people earned by providing services to others.

Trade became globalized and a greater variety of commodities entered national markets. The advertising industry grew at a rapid pace. TV constantly promoted the latest and greatest products, encouraging people to spend more on consumer goods.

And now it was time for another significant change: the Internet. The knowledge economy and new technology wiped out tons of traditional jobs while creating new ones. And here we are, on the cusp of the creator economy.

However, let’s not forget that it took a while for people to discover that the Internet had the potential to create an unlimited number of jobs. And even now, we’re probably just scratching the surface, which brings us to the various stages of the Internet’s evolution.

From Web1 to Web2

1991 to 2004 was the first phase of the World Wide Web’s evolution. The Internet consisted mainly of static pages hosted on web servers, operated by ISPs or free web hosting services. 

As IT folks used to say, Web1 was a content delivery network (CDN) or the ‘read-only’ stage. In this phase, the number of creators was relatively limited, and most users were content consumers. This changed around 2004.

Web2 refers to the current state of the Internet, emphasizing user-generated content, ease of use, and interoperability for end users. The most significant change involved the interactivity of the Internet. It was finally time for a two-way relationship.

This meant that users were getting information from websites, but websites were starting to get information from users. Giant centralized corporations like Facebook, Amazon, YouTube, and Google began collecting this information and selling it to various companies. This is how targeted advertising was born! 

One of the challenges of Web2 was the lack of privacy protection and shaky regulations on sharing individuals’ data. And that’s a critical difference between Web2 and the next generation of the World Wide Web.

Nevertheless, it was Web2 that provided an excellent environment and laid the foundation for the creator economy to thrive.

Web3 is the future of the creator economy

Web2 certainly did content creators a great favor by providing an interactive environment and opportunities to share data with other internet users. But it eventually faced a colossal challenge that ushered in the birth of Web3, the decentralized future of the Internet.

Web3 addresses issues surrounding privacy, corporate transparency, and data ownership primarily through blockchain technologies and other tools of decentralization. Up to now, Web3 has mainly been of interest to the cryptocurrency community. But the more it grows, the clearer it becomes that the future of this creative economy is closely tied to Web3.

In the new world of Web3, content creators will be able to generate revenue through new channels and more transparent business models. As smart contracts prevail, there will be no mediator to set the terms of the agreement. Creators will no longer have to worry about payment delays. 

We’re effectively moving from a world where creators generate their income through a third party to one where they rely heavily on the support of their community. Therefore, Web3 allows creators independence and ownership of their content.

Geographical boundaries gradually became obsolete as the Internet prevailed. But now, a new process is underway. The cultural influence of creators is eclipsing that of traditional media. The rise of influencers worldwide is undoubtedly changing our previous view of the creator economy.

As a result, technology has undergone a series of twists and turns. Sometimes it has benefited the general public, other times, small elite groups. But Web3, at its core, promises greater democratization, more transparency, and direct user participation. Experts believe that in Web3, decentralized groups (DAOs) will run every business.

DAOs are slowly replacing centralized decision-making bodies. Those who own the most tokens or shares will decide how the company operates, independent of central governments or CEOs. At least in theory, this is the closest thing to a true, global democracy.

The creator economy explained

As we mentioned earlier, the rise of the creator economy can be connected with the birth of Web3 and the active participation of users in the consumption of content and production processes. They were no longer just consumers but could produce various forms of content, share it on the Internet, and even make money. This is the creator economy in action.

Many fascinating aspects of the creator economy distinguish it from earlier forms. A few years ago, you needed a studio, a team of professionals, and expensive equipment to place an ad on TV.

Today, you just need to sign up to any platform that allows you to share content. And your options aren’t limited: Twitch, Substack, OnlyFans, Lightricks, YouTube, Instagram, CollAction, Spotify, TikTok, and Patreon are just some of the most famous examples.

The second astonishing fact about the creator economy is the diversity and type of content. At one time, you had to acquire knowledge and skills and hone your talents to enter a profession where you could make money. And even today, many people pay their bills by teaching others all sorts of things. 

But two or three decades ago, no one could imagine making a fortune playing video games in the middle of the night, singing along to a pop song, or recording themselves reacting to a video. That was simply impossible before the creator economy emerged.

Criticism aside, we should recognize that this has created an unparalleled opportunity for every person who has access to the Internet to become a creator. Today, people can make money just by being themselves and sharing their knowledge or skills with others, as long as someone out there is keen for what they offer.

Benefits of the creator economy

Let’s summarize the advantages of the creator economy in three short points:

Freedom 

The creator economy has rid itself of many barriers that traditionally prevented people from going their own way. Top-down pressures have been radically minimized and creators have more control over their intellectual or physical property.

Following Passions 

It has long been everyone’s dream to earn from what they love. And that’s what the creator economy delivers. If you love writing, you can easily start working on freelance websites like iWriter or Upwork. Are you a filmmaker? Introduce yourself on YouTube or TikTok.

Accessibility 

According to surveys, more than 6 billion people worldwide use smartphones, of which nearly 4 billion are active on at least one social media platform. When you create content in your room, it can potentially be consumed by people in different regions, languages, and cultures. You have virtually unlimited access to the global market.

Top trends in the creator economy

The creator economy has come a long way so far, yet it seems to be just the beginning. The future of the creator economy, especially with the rise of Web3 and blockchain technologies, appears to be heading towards a self-sustaining economy. 

Below are three key trends likely to dominate the creator economy in the coming years.

A new generation of creators rising

The Business Insider conducted a survey in 2019 that yielded a shocking result. Twenty-nine percent of American children want to be YouTube stars when they grow up. It wouldn’t be surprising if just as many kids in the UK, Spain, or Singapore had the same desire. 

And this isn’t limited to any particular age group. Giant multinational corporations and promising startups are following the trends of TikTok and other platforms to make their businesses more popular and profitable. 

Moreover, the pandemic coincided with the rise of Web3 and accelerated the transition to this new form of economy. For many entrepreneurs, this was an opportunity to start a new business. DEIP has dedicated resources to help novice founders launch their Web3 startups.

NFTs will grow by 1000% in 2022

Non-fungible tokens (NFTs) are unique cryptographic tokens that exist on a blockchain and cannot be replicated. They can represent anything digital (literally anything, drawings, music, real estate, your brain downloaded and turned into an AI, you name it).

By leveraging NFTs, creators can now access new, technologically sophisticated revenue streams and innovatively engage with users and fans. Athletes, artists, celebrities, and even gamers will have more control over their content and be able to monetize it.

Despite the significant growth of NFTs, we are still in the infancy of Web3. F-NFTs or Fractionalized NFTs add to the colorful array of decentralized tech tools. Fractionalized NFTs are NFTs that have been broken down into pieces. Ownership protocols for NFT owners allow them to sell their assets individually.

Explosive growth of social tokens

Social tokens are genuine products of Web3 that directly connect content creators and consumers. They are a kind of cryptocurrency that a brand, a community, or even celebrities can use to monetize themselves. Social tokens are based on the principle of “ownership economy,” meaning that engagement is more important than money, and community is more important than audience.

By using blockchain technology, creators will be able to monetize their content and engage with their community in ways previously unthinkable. Fans will also have secure and easy access to their desired content without having to overcome the outdated barriers and monetization models.

Conclusion

There is a lot of controversy and skepticism about the creator economy. At DEIP, we’re optimistic about the future and firmly believe that the creative industries and creators are set to become the primary drivers of the ever-evolving economy. That’s why we’re the leading platform for the creator economy.

Like you, we’re creators who appreciate value creation. To realize our dreams of a more prosperous, dynamic, and democratic economy, we are developing the core infrastructure for a decentralized creator economy. We have also created lots of high-quality content on various topics such as Web3, fractionalized NFTs, and creator economy. So make sure to check out our website and keep up to date with our projects!

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