AtoZ Markets: This article was published in AtoZ Markets on August 18, 2021 atozmarkets.com
In recent years social networks have thrived by offering convenience and a range of powerful tools and services for their members. However, most of these platforms present fundamental problems for content creators who are the primary engines for social networking activities.
Today, creators seek better outcomes on social networks, in terms of revenue, control, and freedom. There is a movement toward a new paradigm called the Passion Economy. Which seeks to get more creator-centric outcomes from existing social networks, and offers new types of platforms that promise more benefits to creators. However, like all high potential yet emerging industries, the Passion Economy offers lots of promise and many challenges.
Today’s post will highlight key challenges facing the fast-growing $38 billion Passion Economy. And how decentralized or blockchain-based technologies can meet these challenges. Specifically, we take a look at how one decentralized company, TrustVibes, is using its groundbreaking new social app to empower creators to generate more income, build vibrant fan communities, and gain control over their futures.
4 Major Challenges Facing the Passion Economy
1. Creators do not get a fair share of the revenue from their creations
Creators complaining about not getting their fair share of the revenue from their creations is their biggest complaint. Previous offline distribution companies are notorious for hiding revenue from creators, often leading to expensive lawsuits. When creators win, it is often revealed that these companies have hidden the majority of the revenue creators were due. As online distributors have permeated, unfortunately, these issues have worsened. Because these platforms are completely self-contained, controlling every aspect of the exploitation, distribution, and accounting process, creators really have no idea what was generated from their creative works and what is owed to them.
For example, on Patreon, the most successful new creator platform, only 5% of creators can earn a minimum wage. On music streaming leader Spotify, artists need millions of streams per month to achieve decent annual earnings.
A lack of income from their creations compels marginally successful creators to supplement their earnings through brand sponsorships, which often causes them to compromise their creativity and focus. Creators should not have to choose between quality and trying to make a living with their art.
2. Inadequate technology tools limit creators’ success
Some platforms have their own embedded content creation tools such as TikTok video effects and Instagram photo filters, but these fulfill only the basic needs of the passion economy creator. As a result, to maximize their reach and revenue, creators have to use multiple social and transactional platforms or build the tools they need themselves, which can be costly and difficult to create.
In the 21st century creators want to be owners, with the power to manage their careers like businesses, have full control of their content, and have full access to the multiple revenue streams that their creative activities generate.
Part of what is fueling the Passion Economy is the promise that creators shift away from platforms managing their fan and revenue activities, and they take control.
3.Lack of Intellectual Property ownership causes loss of revenue
Whether it is a song, a video, a picture, or even a tweet, creators craft various forms of protectable intellectual property. But how do they protect their personal creations? When they join a social media platform, they give legal permission for the platform to utilize anything they post. This “rights theft” results in the loss of monetization opportunities for creators.
4. Technical Barriers and Fear
Technological advancement has enabled unlimited possibilities, but understanding how to fully exploit the new tech tools often requires a master’s degree. The vast majority of creators are not tech-savvy, and for the small number that are, few have the time to learn how to operate many of the most useful tools.
On top of this, creators have been misled and taken advantage of so frequently, that many are reluctant to put their trust in new tools, particularly when these new tools are coming from the same old sources that have made so many promises in the past, only to let them down over and over again.
Simple yet powerful tools from trustworthy sources are in short supply, yet sorely needed to ensure that creators thrive in the Passion Economy.
Decentralized Technologies – The solution for the Passion Economy’s 4 greatest challenges
Decentralized or blockchain-based technologies provide robust solutions to the 4 greatest challenges for creators thriving in the Passion Economy. Here is a brief explanation of how decentralized environments can solve these problems.
Today’s decentralized networks store 100% of creator content and all of the usage, and revenue information associated with it, and it cannot be altered or manipulated. And best of all, it is completely accessible by creators, without the need for permission by the platform. As a result, accuracy in accounting is assured to creators. In addition, revenues are paid to the creator utilizing smart contracts and eliminating the need for any intermediaries. This means that revenues or royalties are automatically moved into the creator’s account as they are generated. The platform again does not have the ability to alter, manipulate, or hide any revenue generated. With these factors underpinning their efforts, creators can easily monetize their creations, without any centralized third-party platform intervening and acting as an adversarial actor or middleman.
Ownership and Control of Intellectual Property
Almost all social media platforms do not provide ownership of I.P. to creators. This means likes, dislikes, endorsements, interactions, stories, videos, and other things created and distributed on the platform are not necessarily owned or controlled by those who create it. We all know that this content is valuable because platforms like Facebook make billions from licensing this data each year. On a decentralized platform, creators own and control all of the content they create. They are also able to use decentralized blockchain-based platforms to create new types of I.P. that offer improved benefits to creators. One great example is Non-Fungible Tokens (NFTs).
Non Fungible Tokens (NFTs) – Blockchain-based I.P.
An NFT is a unique cryptographic non-fungible asset that is created on the blockchain. As such, it has exclusive properties, and cannot be altered once created. The use of NFT as a digital certificate of authenticity placed on the blockchain provides creators the right of ownership and the right to exclude others from claiming ownership. NFTs are a Passion Economy product that provides creators with the elements they desire to build and control their creator businesses.
Layers of Trust
Decentralized systems work as a unique intertwining of social, technical, and record-keeping design and engineering. They utilize blockchains as a foundation that for the first time creates a tamper-proof and fortified system of trust. Blockchains rely upon three interacting “trust layers”:
- A Social Layer: The layer at which social actors interact with one another and determine how much information they each need to be able to trust and take action.
- A Records Layer: This layer supplies the information that social actors have decided they need to obtain from the blockchain system to give them the confidence to act;
- A Technical Layer: This layer is the technical means by which social actors interact and create, store and obtain information about those interactions as tamper-resistant and non-repudiable proof of facts.
Collectively, these three layers provide the foundation for a successful relationship, trust.
The Future of Decentralized Social Networks
The use of decentralized or blockchain-based networks has been gaining traction over the past several years. For example, the Steemit network found popularity in the Crypto boom of 2018 as a blockchain-based blogging and social website. It gave users the tools to publish their blogs and monetize their writing. Steemit broke ground but ultimately its business model has proven inadequate in providing the complete sets of needs for creators. As a result, it has struggled to gain a wide audience. It did, however, prove that blockchain-based platforms can offer new and powerful tools and benefits to creators, opening the door for next-generation blockchain-based platforms.
2020 ushered in a new set of blockchain-based platforms that built on the efforts of companies like Steemit but modified their tools, services, and business models to specifically meet the needs of creators operating in the Passion Economy. Perhaps the best-positioned platform in the social marketplace today is TrustVibes. That has a transformative social model that counters the deficiencies associated with centralized social networks such as Facebook, Instagram, Linked In, Twitter, and more. TrustVibes offers a semi-decentralized environment where creators can share their creations and life moments with a click of a button in the form of NFTs, have complete control of their fan communities and monetize their social content.
TrustVibes is a censorship-resistant platform where users utilize its social approach called TrustCircles to interact, create strong bonds, reward each other, and gain the chance to achieve financial freedom. The platform implements tools and strategies focused on eliminating all of the downsides of social networking including trolls, negative gossip, bullying, bad actors, and unwanted ads. The platform uses the $TRUST token as its currency. The TrustVibes Social app is rolling out its BETA on the 16th of August 2021.
In 2021, traditional social networks built on outdated business models and technology continue to struggle to provide real value to creators in the Passion Economy.
Meanwhile, the rising popularity of blockchain technology has resulted in decentralized platforms gaining traction among creators. Companies like TrustVibes are now leading the charge, with an approach that protects and empowers creators. For creators looking for a new and powerful way to manage and grow their creative businesses, TrustVibes might make their future bright.