Web 3.0 - disintermediated creator economy?
Kevin Kelly, 1000 True Fans
https://kk.org/thetechnium/1000-true-fans/
Chris Dixon on Web 3
https://cdixon.org/2021/02/27/NFTs-and-a-thousand-true-fans
Cdixon’s thread on Twitter
1/ Topic: Going from Web 2 to Web 3 - “Your take rate is my opportunity”
2/ Jeff Bezos famously said “your margin is my opportunity” referring to the way Amazon took market share by lowering prices and eating into competitor margins.
3/ What Amazon did in commerce is what the internet did more generally. Lowering prices and redistributing value back to users has been the internet’s core economic dynamic since the 90s. Chris Dixon
4/ Craigslist did this with classifieds, Google and Facebook did this with media, TripAdvisor and Airbnb did this with travel, and so on.
5/ Today this trend continues as Web 3 startups begin to eat into the margins of Web 2 incumbents. The higher the take rate, the more vulnerable the incumbent.
6/ The video games industry does about $120B/year in sales, a significant portion of which is virtual goods. Most video games have 100% take rates.
7/ Web 3 (aka crypto) games reduce the take rate dramatically. For example, Axie Infinity has generated over $1B in gross sales in the past year, most of which has gone back to users.
@Jihoz_Axie · Aug 3 Traditional games are digital economies with 100% tax rates. Axie Infinity is a digital economy with a 4.25% tax rate.
8/ In most video games, some people pay to get ahead and other people work to get ahead. The difference in Web 3 is that the economy is peer to peer: players fund other players, not just the game developers.
9/ Today there are over 8 million musicians on streaming services, yet less than 15,000 musicians (less that 0.2%) make more than $50K/year. That’s because the vast majority of the revenue is kept by the streaming services and music labels.
10/ With NFTs, musicians keep over 90% of sales. By cutting out layers of intermediaries, musicians can credibly support themselves with just a thousand true fans: NFTs and A Thousand True Fans cdixon.org
11/ Social media platforms like Twitter, Instagram, and TikTok have take rates of 100% — they don’t share any revenue at all with creators! That’s been great for them but bad for users.
12/ In contrast, Web 3 social platforms like Rally, Mirror, and BitClout have effective take rates well below 10%. Most of the value is sent back to users and creators.
13/ Web 2 platforms depend entirely on creators for content, yet give only scraps back. This is not sustainable. Web 2’s take rate is Web 3’s opportunity.
Decentralized vs traditional platforms
Adam MacBeth @adamac · Aug 11 Replying to @cdixon Love the framing but in a decentralized utopia what profits are left for the platform?
Tyler Spagnolo @tyspagnolo
A couple of things I think might happen:
- web2 platforms will be forced to become faux creators to counter the loss in rev and “earn” their attention. I could see tiktok hiring content creators or spinning off something like quibi
Tyler Spagnolo @tyspagnolo
- the margins incumbent tech companies will just decrease and that’s ok bc incumbent tech companies currently have crazy high margins. Amazon saw margin as opportunity and new decentralized platforms will see the same