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Unfair Share? Creator Economy Needs a Revenue Revolution

Last Updated June 7, 2024 7:40 AM
Last Updated June 7, 2024 7:40 AM
By Samuel Huber
Verified by Ana Alexandre
Key Takeaways
  • The current creator economy is plagued by opaque revenue distribution.
  • Many creators struggle to earn a living amid intense competition and algorithmic uncertainties.
  • By leveraging token-based incentives, creators can reward their most loyal supporters, encouraging engagement and enhancing their fan base.

The rise of the creator economy has democratized content creation, empowering individuals to share their passions, build communities, and even forge careers online. Platforms like YouTube, Instagram, and Twitch have become launchpads for a new generation of creators, enriching the digital landscape with diverse voices and perspectives.

Research from Adobe estimates  that there were 300 million creators in 2023, creating a global market size of $250 billion .

This burgeoning industry, which did not exist before 2005, and the rise of social media platforms, is now one of the fastest-growing economies. It is poised to double in size to $480 billion by 2027, equivalent to the 30th biggest country in the world, ranking just above the economy of Nigeria.

However, beneath this vibrant surface lies a system riddled with challenges that threaten its long-term sustainability.

A struggle for fairness

One of the most significant hurdles creators face today is the unfair revenue-sharing model prevalent across many platforms. Despite creators being the driving force of these platforms, a large portion of advertising revenue generated by content goes directly to the platform itself, leaving creators with a significantly smaller share.

This imbalance disincentivizes creators from investing the time and effort required to produce high-quality content, as the financial rewards simply don’t justify the effort. Moreover, revenue distribution is severely imbalanced across platforms—from Patreon to Roblox or Spotify—where the top 1% of creators capture close to 90% of the traffic and the revenue.

Brand deals represent almost 70% of the revenue, disproportionately favoring top creators, while smaller creators lack tools to monetize their core audience of “true fans.”

Adding another layer of complexity are the ever-evolving platform policies that govern content creation and monetization. These intricate policies can change abruptly, leaving creators vulnerable to unexpected shifts in their earnings potential. The constant need to adhere to these shifting rules creates a sense of uncertainty and makes long-term planning a challenge.

The current system forces creators to constantly juggle the creation of engaging content with the time-consuming task of managing multiple monetization channels.

This often results in creators spending more time managing subscriptions and sponsorships than actually creating the content their audiences crave. This divided focus can stifle creativity and ultimately lead to a decline in content quality, a negative domino effect for both creators and viewers.

Another major pain point is the lack of transparency in revenue distribution. Platforms often provide limited insight into how ad revenue is generated and distributed, making it difficult for creators to understand their true earning potential.

Without transparency, creators struggle to negotiate fair compensation with brands for sponsorships, leaving them at a disadvantage when it comes to securing a sustainable income.

A way to a more loyal and dedicated fan base

Despite these challenges facing the current creator economy, blockchain-based platforms offer a glimpse of a more equitable future. By prioritizing transparency, decentralizing funding, and empowering creators with ownership, these platforms have the potential to revolutionize how creators connect with audiences and earn a living.

Here’s how blockchain can revolutionize the creator economy:

  • Transparency and trust. Blockchain platforms can enable transparent revenue distribution models, providing creators with an immutable record of how revenue is generated and distributed. This fosters trust within the ecosystem and empowers creators to negotiate fair compensation with brands and platforms.
  • Decentralized funding models. DAOs allow communities to directly support creators they value, bypassing the limitations of traditional platform-based revenue models. Creators can secure funding for projects directly from their audience, fostering a stronger connection and a more sustainable income stream.
  • Ownership and control. Blockchain technology can empower creators with true ownership of their content. This allows them to explore innovative monetization options beyond traditional advertising, such as tokenized content or exclusive access for token holders.

Content creation for Web3

Web3 opens doors to entirely new content formats. Here are some ways creators can leverage Web3’s unique features:

  • Interactive experiences. Create content that allows fans to participate. Imagine choose-your-own-adventure stories on blockchain or music that evolve based on community input.
  • Token-gated content. Creators can build communities around their work, offering exclusive content and experiences to token holders. This fosters deeper fan engagement and allows creators to directly reward their most loyal supporters.
  • Leverage NFTs. Establish verifiable ownership of their work, be it a blog post, a song, or a digital artwork. This empowers them to control distribution and pricing, and even dictate secondary sales.

With Web3-powered creator economy and content creation, creators will be able to attract stakers to support them, raise capital for their projects, and directly monetize their superfans.

As a result, audiences will be treated to a diverse array of content that is more authentic, more relatable, and more engaging. At the same time, creators can thrive within a transparent and supportive ecosystem.

Disclaimer: The views, thoughts, and opinions expressed in the article belong solely to the author, and not necessarily to CCN, its management, employees, or affiliates. This content is for informational purposes only and should not be considered professional advice.