The creator economy, defined as an economic model around independent content creators, with a market size of over $100 billion, has been the backbone of existing social platforms, creating numerous opportunities for creators themselves, as well as employees and partner brands.
As we said in the previous article, the creator economy is crucial to the operation of the Metaverse, it is closely related to other components such as avatars/avatars, virtual economies and games, and it is necessary for product development of both startups and established companies. Influence.
In this article, we’ll focus on how the Metaverse can drive the creator economy, and how the Metaverse’s version of the creator economy differs from the creator economy we’re familiar with in mainstream social media.
Source of creator income for current social media platforms: Doug Sharpio
Key Elements of the Metaverse’s Creator Economy
For creators, Web 2.0 platforms such as social media provide them with channels for content monetization and community interaction. For brands, creators can help them target specific groups with a depth and frequency that traditional channels can’t match. In the Metaverse version, the creator-platform-audience relationship is more democratic and variable, and participants will gain more autonomy, especially in the “community-oriented” Metaverse project. In Metaverse applications, the audience has more space to interact with the creator’s work, and with the introduction of more tools, the audience can become the creator themselves. For example, “The Sandbox”, one of the most funded Metaverse games, provides a variety of tools to help developers build games, 3D assets and sell NFTs, and creators get 95% of the sales.
An interesting difference compared to current social media is that audiences have more opportunities to interact with creators and even become partners in pursuit of team goals such as playing games together and promoting social tokens/digital assets.
How Creators Benefit From Metaverse Apps
broader content categories
Compared to existing platforms, the main difference brought by Metaverse applications is that creators can build their own content in a virtual space, whether it is virtual land or virtual buildings, which creates a new demand for 3D artists. As we discussed in our last article on Metaverse culture, virtual assets such as avatars/avatars and digital clothing are expected to spawn new categories of creators. Among them, we expect more demand for infrastructure and content related to music and games, and some existing platforms are already showing such trends.
We also expect that people will spend more time in the Metaverse as the hardware user experience improves, which will further facilitate the development of non-entertainment applications such as business and education. For example, Mesh for Teams, Microsoft’s corporate Metaverse, is committed to moving most of its online meetings to a 3D environment.
Reduce reliance on brand sales
Creators are highly dependent on brands for income, mainly due to the following reasons: brand negotiation terms are more flexible, leading celebrities have an advantage (luxury brands that cooperate with celebrities have rich budgets), and most platforms have strict profit sharing restrictions (creators need to touch a certain number of audience, in order to reach the basic revenue sharing standard). But with new forms of activity and virtual participation, Metaverse applications are expected to change this highly dependent situation. For example, creators can build their own Metaverse economies and have more opportunities to sell virtual items to fans.
Provide creators with a higher return-to-investment ratio
According to the latest survey from digital identity management service provider Linktree in April this year, only 12% of full-time creators earn more than $50,000 a year, and 46% earn less than $1,000 a year. Instagram’s newest “badges,” for example, allow creators’ live-streaming viewers to buy and use additional features, but only if the creator has at least 10,000 followers and Apple’s App Store takes a 30 percent cut. On YouTube, creators with 20,000 monthly views earn about $500 a month after the platform charges 45% of the ad revenue.
The Metaverse version of the creator economy can bring more ways for creators to make money, including taking advantage of richer digital assets and decentralized Metaverse applications, and getting rewards through considerable token sharing and NFT sales.
Implications: Web 3.0’s Decentralized Metaverse Will Unlock More Opportunities for Creators
One of the reasons centralized social media platforms can charge such high fees is that they have huge audiences in the global market. Although the platform share is as high as 30%-50%, creators have no better choice, and the platform lacks competition and motivation to reduce prices. Web3 is poised to change this, as most early-stage startups that issue tokens keep 20%-50% of their token offerings earmarked for ecosystem growth funds, with a large percentage going to content creators and early-stage communities member.
Creators holding these tokens are like shareholders of emerging platforms, and they are more motivated to promote related services and create content . For example, Web3 platforms such as Rally allow creators to design their own social token economy for free, so that creators’ fans can not only support their creativity, but also become shareholders by holding tokens and share the benefits of social tokens ( or share the risk). In a Metaverse environment, this mechanism is also expected to be further deepened, as digital asset rewards can extend from tokens to virtual land, NFT artwork, and more. Open Metaverses like Decentraland have their own land economy, where creators can buy land, build virtual venues, and then rent or sell it to others.
In a decentralized Metaverse, the relationship between creators will also be different. The attention economy of mainstream social platforms is often a zero-sum game. Every creator is more or less a contender for the audience’s attention. On a decentralized Metaverse platform, creators are ultimately shareholders of the new platform.Therefore, we expect to see more cross-border collaborations to further expand the content diversity of the decentralized Metaverse.
While it’s too early for these decentralized Metaverse applications, including games, social spaces, and Metaverse platforms, to talk about competition with centralized platforms, in the long run, as more options and benefits emerge, they are expected to Incentivize creators to migrate to other platforms. After all, every new wave of technology spawns a new category of consumer applications.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/the-creator-economy-of-the-metaverse-dwarfing-your-favorite-social-media/
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