How is crypto leveraged in the creator economy?
Interview with Deepak Dutt and Akshay Patel (Part 2)
In our previous discussion with Deepak Dutt and Akshay Patel, we have got some great feedback and people asking for more of the interview. Because of that, they have joined us for the second part to discuss more in-depth about crypto and the creator economy. We have gathered a blog for our last conversation regarding the introduction of what is the creator economy, how is crypto emerge and how they are interrelated with one another to create possibilities in the creator economy for the coming years. To check out the blog:
In this second interview with Deepak Dutt, the CEO and Founder of Zighra, and Akshay Patel, a crypto specialist and EECS + Business student at the University of Berkeley. We learn about the trajectory of the creator economy, how crypto is leverage, and what is the crucial things for creators to start a sustainable brand. If you are interested to start a brand and get yourself equipped for what’s coming in the creator space, continue reading this blog!
Interview with Deepak Dutt and Akshay Patel
What is the creator economy?
Creator economy includes independent content creators, curators, and also community builders, such as social media influencers, bloggers, and videographers. This also expands to the software and financing tools that are designed to help these creators to grow and monetize.
What is the creator’s economy previously look like?
A few years ago, podcasting, doing YouTube channels and blogging were the main aspects of the creator economy. A lot of the creators are able to truly build sustainable revenue off of platforms such as YouTube and Spotify. But they are the ones that got to market first and already had a large following. It is getting harder for the new creators to break onto these platforms and sustain revenue. Platforms like YouTube are retaining 50% of the ad revenue, while only 1.6% of the top music creators are able to generate profit from Spotify. Creators are not really retaining much value and revenue from their content creation.
What is the trajectory for the creator economy?
Over the past decade, we've seen an increase in various social media apps like Vine or Tik Tok. This grows the creator economy not only to those who do this as a full-time job but also to attract many smaller creators to start to monetize their hobbies and passions. We have been seeing most of these platforms retaining a lot of value and revenue from the creators. But we also see gradually, there are more tools emerging in the creator economy to support creators to capture more of their value and ownership. For example, technologies like crypto and associated technologies coming into play, which we are seeing in the next stage of the creator economy. With the pandemics being a great inflection point, it is definitely putting the creator economy on steroids. We are hoping to see creators retain most of their value, and start making sustainable living.
How do you think about democratization opportunities for creators in the creator economy?
Technology is advancing and different tools are becoming available, including high-end cameras available on smartphones. Anyone with a smartphone, laptop or iPad can quickly become a creator. We have seen almost 15 million creators have joined the overall ecosystem. Some people are full-time working and creating a life around it, while there are part-time people, and occasions. This branches to the upcoming middle class of the creator economy.
What is the gap between the top creators and middle-class creators? And how to close this gap?
In order to build a strong middle class and close the gap between the top and the middle, we need to understand the barriers. First, reduce the major barrier of these big social media platforms acting as middlemen, taking a part or full ownership of creators’ intellectual property (IP) and revenue that they generate. Then, we need to understand how to let more middle-class creators actually generate sustainable revenue. A fundamental shift and thought need to happen in creators. They need to learn that the crucial of sustainable living is creating the community first, not selling. Creators might be able to sell multiple different things to sustain their living and have those streams of income together to label them as part of the middle class. But only through a community perspective, they can then create a sustainable living for themselves. To support community formation, in recent years, there are many tools becoming available, including crypto and associate platforms like Spur. They have played a crucial role in enabling this community formation for the creator economy through bringing different communities together, as creators, producers and consumers, to support each other. A good movement for creators to build upon to create their sustainable living.
How can crypto be used for community formation?
Crypto has created decentralized autonomous organizations and fungible tokens to solve a lot of fundamental problems in community formation, including the interactions restriction and limitation of superfans that are seen in many platforms now. Through crypto, creators or YouTubers can add a new dynamic concept known as decentralized autonomous organizations. It means that creators can essentially build a small economy with their consumers like a shared digital bank account for communities, acting like official co-ops or companies to build sustainable models and interactions for themselves. For example, with the use of fungible tokens, creators have the flexibilities to create a creator coin for their superfans or fans to buy. When fans obtain a certain amount of coins, creators can lead them into a VIP event or a more private interaction. This personalized interaction with their fans provides a sustainable base for supporters to feel appreciated and motivated, eventually continue to support the creator’s creation. From a financial perspective using crypto, when the creator grows in value, these coins will grow in value as well. The community and superfans that supported the creators in their early days will grow along with the creators. This is where the ecosystem of mutual support is formed. Crypto is truly adding that new dynamic for creators to be able to interact and communicate with their communities in ways besides the restriction in channels and platforms provided right now.
If community formation is this important, how to support creators to bridge the gap between creating their community and also making a living?
Creators can feel burnout and complicated to start their own sustainable brand sometimes. The absolute critical key for creators to be successful is a support system. Create a platform with the right kind of tools so it can be extremely simple from a crypto and financial perspective. They should be able to click on certain things quickly and understand them easily. A guide for new creators to follow through on creating their own community is also something really crucial. People who are starting out don’t usually have many fans. They might feel the pressure so they go to the marketplace to retain value there, but they don’t realize that this decision is actually helping the marketing and advertisement of the platforms, instead of for themselves. So to support creators to bridge the gap in a creator-led economy with complicated technology and crypto, it is important to make it super simple and comfortable for the creators from their initial journey to the community creating.
At Spur, we are committed to supporting creators to build a sustainable brand and community. With this intuition, we are giving a business shower to every creator that launches their brand. We welcome them with the right community of 20 to 25 initialized monetizable customers. Starting a business is a very lonely affair but we want to make it a bit more fun to have your business shower with a supportive community and students who are eager to learn.
How can crypto be used for creator ownership and to protect intellectual property?
Crypto has created NFT’s, non-fungible tokens to enable creators to digitally store and showcase their value. Instead of Intellectual property (IP) getting stolen, crypto is programmed in a very digital fashion where the creators can have the ownership of their asset and people can trace it back to all the supporters who have supported the creators along the way. It’s about everybody winning together as they support the creator. This creates an ecosystem in which people are now motivated to contribute and retain the value of the asset. Crypto is a way to decentralize the previous centralized platform and create profound change that puts the creator economy on the right rails.
Do you think creators should see ownership as equally important as making sales?
Yes, ownership and monetization aspects go hand in hand in terms of creators that actually distribute on platforms, such as YouTube. For example, there is a 45/55 split for all content creators. Google keeps 45 percent of all YouTube advertising on the creator’s videos, and creators get the remaining 55 percent. Not mentioning that monetizing on YouTube has been effective for only approximately 10% of the overall creators who already have an extremely large fan base. It’s a large chunk of revenue that is missing when monetizing on platforms like Youtube. And if the creator created content that doesn’t match with the YouTube guidelines, it gets immediately demonetized and so creators won’t get any of the profit from any of the content the creators created. However, when creators have their own personal branding and ownership with their content through crypto, they are able to rebuy all the benefits without any middleman taking a large section of revenue from it.
Is crypto secure?
Because crypto blockchain captured every single node, and transaction, there is a lot of transparency across. Everyone can see the transactions because there's more of a peer-to-peer network. There's a lot of security and fraud detection built into the overall network itself. That's why Bitcoin takes off in a big way and a lot of people are putting their weight behind Bitcoin. We are seeing more new blockchains coming out that solve some of the issues around gas fees and the amount of energy it takes for mining these new nodes and such. But as crypto gets more and more efficient, we see a lot of benefits from crypto, instead of a 15% wire cost that goes across traditional networks, crypto was able to bring it down 2.1%, a tremendous amount of savings. From a payments perspective, a very little amount of the rails goes on serving the nodes, and more values are used to retain within the network.
How crypto can be used to bypass some of the problems that we are currently having with all the payment gateways, such as Paypal or Stripe?
As we have mentioned earlier, the major problem is definitely the service charge. A large chunk of revenues that have been brought in by the courses and the pledges of superfans to the creators has been taken by Stripe and these other gateways. This causes less value retained by the creator. But another issue is that a lot of these payment gateways are not accessible for fans from different countries, such as those who are trying to support someone abroad. Crypto can actually solve payment issues from any country.
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