Web 3.0 and the creator economy - a seismic shift, or a hype festival for enterprises to ignore?

Jon Reed Profile picture for user jreed July 8, 2022
I've had a chip on my shoulder about Web 3.0 for a while. Now the creator economy hype has reached a fever pitch - and it's time to air it out. Also: when it comes to NFTs and creative talent, should the enterprise care?


Readers know I have severe buzzword allergies - but there are exceptions. There is no buzz phrase I'm rooting for harder than the so-called "creator economy." Yet I harbor deep skepticism this will ever come to pass.

The autonomous, decentralized future that creative economy proponents fantasize believe is inevitable smells like something you could pick up at the cannabis shop (now there's an industry with real potential).

I've been an enterprise dude for a long time, 1995 to be exact. But before then, I was a "creator." My years in music journalism were all about getting shut out of big publications by the types of middlepersons the creative economy supposedly magically eliminates. My extensive forays in self-publishing taught me plenty about the joys of creating on your own terms - and the marketplace adversity that comes right along with it.

I've had a good thing going with diginomica for a long time now; I don't expect that to change. But I know plenty of artists struggling to make rent - people who contend with the naive promises of the creative economy every day. I've seen plenty of success stories, too. *If* you count reaching niche audiences who crave your work as a success (I do).

But if the bar of success is higher, as in "broad material opportunities for artists to keep producing their art and comfortably pay the rent,"  then the creative economy is, so far, an abject failure, a con job propped up by celebrity exceptions who don't prove the rule, now appropriated by crypto-advocates who have their own vested interests, and who give new, unwelcome meaning to "tokenization." Yes, there is creative action going on at economic scale, but it's mostly happening inside corporate marketing departments, not on the blockchain (more on that later).

I'll give the creative economy this much: as a metaphor for economic potential, "the gig economy" has worn thin. The paltry exchange of greater hourly flexibility, in exchange for the 24/7 work/rent hustle, hasn't made life in the gig economy demonstrably better. We needed fresh perfume to sprinkle over the relentless scraping of the freelance life; the creative economy fits the bill.

The creator economy - a revolution, or a feast for big tech aggregators?

Which brings me to a breathless VentureBeat article, The future of the creator economy in a Web3 world, authored by a venture capitalist I suspect has a dog in this fight. I don't want to single this person out further, as I could have picked any number of articles to deconstruct. VentureBeat's editors are to blame for releasing a flurry of hype balloons, not the author. Let's start from the top:

The creator economy is driving innovation across industries, shifting definitions of work and providing revolutionary avenues for income.

A link to support these extravagant claims would have been helpful. I've seen no evidence of "revolutionary avenues for income" amongst the artists I know. As in the gig economy, money from the creative economy - as it exists now - largely siphons up to the aggregators (YouTube, Patreon, Spotify, et al).

On the front-end, different platforms like TikTok, Instagram, and Cameo have billions of users the world over, and have provided content creators with impressive revenue streams.

The "revenue streams" link leads us to a slightly more sober VentureBeat article, which notes some of the happy/fortunate exceptions raking it in, before we get to a subheading which acknowledges: "Monetization provides limited income, and only for certain creatives." So, the supporting "revenue streams" link contradicts its own premise. Continuing on:

Within the past few months, there's been an emergence of industry-specific social platforms, even in traditional sectors. For example, Playhouse launched "TikTok for real estate" where users can browse videos of real estate listings; Hammr enables construction workers to showcase their own construction projects on their app.

Yes, that's a shift for marketers in how to reach audiences (some call this "social selling,") but that's hardly revolutionary. Internet audiences shift all the time. And: we've drifted from the creative economy. Or have we? As artists struggle to achieve that rare monetization-for-financial-success level, they'll be pressed into new options. I give this second article credit for acknowledging the likely direction: brand partnerships.

But now we've lost our autonomy. Is this the creative economy? Nope - brand partnerships are the social marketing economy. As the article itself admits:  "Brand partnerships can provide critical financial support — and undermine authenticity."

Some lucky few might go viral and accumulate enough viewers to generate a living through monetization; however, most will need to balance promotion and authentic content to stay afloat. The risk of audience alienation is perpetual and unavoidable; one poorly-handled post could drive away valuable viewers for good.

The creator economy needs hype fuel - and Web 3.0 provides it

Does that sound like a revolution to you? Sounds like a job, a tough job  - a job with tradeoffs like any other. Sounds like the creator economy is already running out of promotional gas. But wait - what if we could slather the promise of true decentralization on top of all this, empowering individuals to make their own nut, without enduring a massive cut? After all, the giant aggregators are really just a new breed of algorithmic middleperson.

Buzzword alert: whenever the word "decentalization" is used in this context, we're now talking about blockchains, tokens, and crypto payments. Yep, that's Web 3.0 - a fresh coat of marketing paint like no other. So, struggling artists are now sold a reconfigured idea: they should combine their longshot monetization odds with faith in unhackable immutable hackable, and, yes, mutable blockchains, oh, and a crypto economy that is sinking plenty of "decentralized" investors, and is, at this point, hardly decentralized (Crypto Isn't Decentralized and Has Undergone 'Recentralization'). Of course, we can expect NFTs to get a heavy plug in this context, as NFTs seem to present a way for authors to sell authenticated work.

Hmm... I wonder what The future of the creator economy in a Web3 world has to say about that?

The creator economy represents a secular shift. In a creator economy, creators do not require a parent company to act as an employer; they are able to work when they want, produce whatever content they please, and have full autonomy over how they monetize their content. This new ownership structure is symbolic of a greater power shift in the employer-employee dynamic. Within the first two economic phases, power resided almost entirely in the hands of the employer. The creator economy, meanwhile, enables individuals creating content to hold onto the power to own and govern their work.

No evidence is provided. Don't know about you, but I have yet to run into anyone who lives their life in this manner, aside from the indepedently wealthy. One big problem with today's creator economy: the aggregators (usually) own the content.

On current social platforms such as Instagram and TikTok, the company behind the platform owns the content that creators produce.

No problem. Creative economic nirvana is right around the corner:

Web3 will enable creators to not only own their content on existing social platforms, but also own a part of the platform they produce and distribute content on. Content can begin to be creator-owned and platform-agnostic through the use of NFTs, which act as proof of ownership and validate the content's authenticity.

So, NFTs are immutable also. Well, except:

Your assets can be hacked on an NFT in the same way that crypto assets are stolen from digital wallets and exchanges.

And: Hackers Are Already Stealing NFTs. Nevermind that tracking the same NFT across platforms is deeply problematic. Nevermind that the existing social platforms have shown no indication they will relinquish creative ownership or license to the creator, whether it's an NFT, a sketch on a napkin, or both.

Then there is the hypothetical promise of the metaverse - one more lure of vague, yet lucrative opportunities which I'm not going to dignify with a critique here, as the metaverse is not operating at any meaningful scale for artists, outside of the gaming community.

Speaking of gaming, we get to the article's most quantified example:

On Roblox, anyone can create video games and monetize them directly on the platform. In 2020 alone, creators earned $329 million through Roblox alone.

Gaming is a lucrative market. I'd like to think game designers willing to operate within the parameters of a gaming platform could indeed make a viable income that way. A quick search on Roblox, however, surfaced concerning assertions, such as: "The Roblox platform uses children as free labor to develop its content and makes minimal effort to moderate online scammers and predators." Wired ran a piece called On Roblox, Kids Learn It’s Hard to Earn Money Making Games.

I don't know enough about Roblox to confirm these critiques., You can find similar problems with all of these supposedly liberating creative platforms. No matter how you slice it, Roblox is most certainly not decentralized. It's just another aggregator, though it seems to rely on very young people, which raises new questions.

Age aside, doesn't this feel more like a freelancer than a true creator? Doesn't true creative autonomy mean creating for an audience you have earned, based on your own freely-created ideas?

My take - new opportunities for artists? yes. Revolution? no.

Though I wouldn't call it a revolution, the combination of Amazon and electronic/print-on-demand publishing in the late 1990s was a big change. It meant that artists and small entrepreneurs didn't have to wait for agents to validate them or publishers to send that rare acceptance slip. If they were ready to prove themselves, they could find audiences.

However, finding those audiences wasn't an idealistic path to autonomy. You had to keep producing. You had to get creative; living on publishing royalties alone wasn't usually an option. As Amazon got crowded, you had to consider an advertising budget. You had to consider an email list, and get pretty darn good at marketing, not just creating.

But reaching audiences was a start. Then you could look at public speaking, consulting. You could bring other writers on board. Along the way, you picked up publishing skills that made you attractive to employers. In short, you weren't beholden to decision-makers to validate your creative potential. If you were an early adopter on a platform, whether it was Kindle, or maybe now NFTs, you had a better shot at a financial breakthrough (though that NFT early adopter window may have already closed).

When it comes to the overflogged creator economy, I believe the same principles I just described still apply. That's why, when I advise young artists, I never tell them there is no hope on these platforms. Instead, encourage them to think about all the different dimensions of professional success - and not to pin hopes on one platform, one royalty stream, and certainly not on volatile, unproven, and eminently hackable NFT marketplaces.

I talk with artists about the worthy long game of building audiences, and how platforms like Patreon can provide some extra income - not as a substitute for a day job, but as an avenue towards skills expansion, creative expression, and audience development. And, perhaps, someday, a meaningful career.

As for the enterprise:

Talent recruitment - with the rise in content marketing, and the need to earn attention versus the increasing difficulty of buying it, there is a growing need for "creatives" in corporate marketing departments. For those creators who don't mind the indignities of commercial projects, there is work to be had - at scale. For companies looking to hire creatives for their marketing teams, there is talent out there (perhaps that's why companies are so eager to talk up their own version of the "creative economy"?).

Rent looms; creatives need work. Tapping into these folks, either as freelancers on a gig economy platform, or as employees, can be fruitful. I advise relaxing rules around side projects. Folks like this love to have a side project going. Don't pressure them to get off Patreon when you offer them a job - in the end, they'll stay longer when you formally allow those freedoms.

NFTs - the so-called creator economy has sparked corporate interest in NFTs. In this Crypto Critics Corner podcast, none other than Mark Cuban describes the NFT use cases he (and the Mavericks) are pursuing. Along with fellow Enterprise Irregular Dennis Moore, we got into it with Cuban on Twitter:

No surprise, Cuban's business cases seemed to favor the aggregators, whereas I saw more limited benefit for the NFTs owners. Still, I think these experiments are interesting for enterprises to consider, with all the NFT caveats I listed still apply.

If you burn to be an artist, go be one. Just don't forget that there are other ways to pay the bills along the way. To pull it off, however, you'll probably have to step back from the unrealistic goal of full creative autonomy and total control over monetization. In other words, find a way to negotiate with the budget holders and get paid. Nothing's changed about that. Save your "total autonomy" for your side project, and nourish that alongside.

One final flaw with the creator economy success recipe: it usually requires mass-scale audiences for royalty income to change your life. Whereas some of the most satisfying creative output is for a niche audience, which may never expand beyond that niche. I was able to take a niche enterprise podcast audience a long way in my career. When I get the occasional "you can monetize your podcast" email, I have to laugh. Monetizing the podcast was never the point. Reaching that niche audience was the professional difference-maker.

Some of these "creator economy" developments are good for artists. But if I'm missing the revolution, please show me - because I see no signs of it.

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