Content is King: How Web 3.0 Can Impact the Creator Economy
By Lucas Prestamo
2021 was supposed to be the year that everything returned to “normal,” where people could gather without masks, meet in-person rather than virtually, and recapture the way of life people were accustomed to. In 2021, the rise of several new digital trends and technologies challenged the norms and values of followers who rely on the sport and entertainment industry to get them through their daily lives. Accelerated by the pandemic, ideas like cryptocurrency, NFTs, and blockchain infiltrated conversations within the media and pushed many sports properties to test their presence in new spaces. One of the compelling reasons for this apparent paradigm shift is that these developments transfer the power and ownership of content directly to the original creator. This phenomenon, what many refer to as a “creator economy,” changed the way athletes market themselves while giving them more leverage in the constant dialogue between brands, agencies, or anyone else seeking their assets. This rising independent economy disrupted the traditional means by which consumers interact with content. As the creator economy evolves, thought leaders and visionaries view Web 3.0, the next phase of the internet predicted to replace the current version of the internet, as the backbone for future growth. So, what is Web 3.0 and how can it impact the future of the creator economy?
To understand the impact of Web 3.0 on the creator economy and the sports and entertainment industry, it is prudent to first explore how the creator economy arose and why it will continue to grow. At its core, the creator economy is exactly what it sounds like – an economy built by content creators. People traditionally sought jobs that paid certain wages based on the value they brought in the form of skills and knowledge. Rather than letting the work define their worth, people began trusting the assets and the personal brand brought to life in whatever they produced. The content is formed, uploaded to creator-friendly platforms like TikTok or YouTube, and can be monetized depending on how the authors want their audience to interact with their creation. Connecting to other social media platforms like Instagram and Twitter helps share content to a global audience that follows one’s accounts, even getting a notification on their smart device when something new is published. While creators have been around long before the social media platforms that many are accustomed to today, demand for content was handcuffed and the technology was not conducive to the common practices accepted now by the public. The early stages of the internet focused on accessing information from one device – a digital encyclopedia among some other basic capabilities. As the internet became more complex and widely utilized, Facebook and YouTube were born and the foundation for content creators materialized within a version of the internet known as Web 2.0. The second stage of the development of the web transformed static information into dynamic content that is shared or distributed via several of the social media platforms mentioned before. Add the rise of influencers and gamers into the mix and most of the creator economy is established and continues to generate attention. By December 1st, 2021, “creator-focused startups have received approximately $2 billion in investment funding — more than three times the amount it garnered during the entirety of 2020” (Avoyan, Forbes). The decentralized ecosystem has marketers rethinking their strategies and even considering “handing over the creative direction” to the new crop of individual marketers.
When someone orders something from Amazon, the company is in complete control of processing the order and overseeing all the steps as the purchase arrives at one’s location in an estimated period. Throughout this centralized process, the user has little to no control over any of the details related to the order. This example highlights a key idea driving the creator economy and why it garnered attention throughout 2021. It can be summed up with one word: decentralization. The content that gets produced, edited, and distributed is entirely up to the creator – excluding any contracts with a third party – to control. While social media is currently the most effective distribution method for creators when it comes to connecting directly with their followers, it may not be the right solution in the future. Although anyone can post on social media, users relinquish some control as they are subject to the guidelines those platforms have. Additionally, platforms like TikTok and Instagram attempt to “upsell influencer partnerships” by having their seat at the table “because they’re already doing business with the advertisers directly” (McCoy, Digiday). While such platforms are making efforts to “build creator-friendly ecosystems” that produce symbiotic relationships between the user and the platform, the risk remains that social media giants are “positioning themselves to take a cut of creator earnings” (McCoy, Digiday). In the context of decentralization, the creator economy still primarily operates within a centralized, digital ecosystem that outside companies determine is ultimately best for their interest and their bottom line.
The push for decentralization seen within the creator economy is mirrored in professional sports as well. Athletes Unlimited is a professional sports league founded by Jon Patricof in March of 2020 that aims to disrupt the traditional means by which sports properties operate. Utilizing a “player-centric model” across multiple leagues, Athletes Unlimited empowers the athletes like Athelo Group’s Alex Aust to act as individual owners who partake in decision making that directly affects the league’s future while benefiting from revenue sharing. Groups within Athletes Unlimited like the Player Executive Committees can “make collective decisions on every aspect of our leagues, from recruiting to rules to business decisions” (Patricof, Sportico). While these developments might not be considered significant from a general business standpoint, they are not common with the blueprint of professional sports organizations. The organization is the closest model to how decentralization can work within the sports industry, as athletes have the power within the decision-making, the governance of their sport, and how they will interact with fans and the community. The unique blend of the creator economy and professional sport league operations that Athletes Unlimited has built could provide more solutions to the problems that plague other sports struggling to stay in the game as they compete for attention with the core four of North American sports.
The framework for decentralization within sports that Athletes Unlimited advocates presents some similarities for the development of Web 3.0. Building off the first two stages of the internet, many believe that Web 3.0 will be the culmination of new smart technology, digital trends, and the movement towards giving more power to the users. This redistribution of power comes with the acceptance of blockchain technology, the backbone for what is possible within Web 3.0. The user-centric digital experience mirrors what Athletes Unlimited championed over its two years lifespan with its player empowerment structure. This self-governance approach the league committed to operates similarly to how decentralized autonomous organizations (DAOs), a new way of organizing ownership, could lead to “a realignment of ownership and control between leagues, owners, players and fans” (Patricof, Sportico). Looking closer, the athletes have control over the content that is produced by the league much in the way an NFT produced by someone is their property and is authenticated by the connected systems proving its legitimacy. While Athletes Unlimited is one case study for how the effects of Web 3.0 concepts and ideas can be seen at the league level, the impact of the transformation of the internet can be seen in other corners of the sports industry as well. Games like Zed Run and Rumble Kong League present another lens to look at how sports and the third stage of the internet can create engaging opportunities for sports fans and consumers globally.
The creator economy exploded in recent years due to the seemingly infinite amount of content being produced that can be found on the digital channels in Web 2.0. Social media channels provide opportunities to both fans and creators alike to communicate and engage in ways that were not possible before. “Content is King,” the unwritten rule followed by nearly everyone from creators to followers to brands and gatekeepers, proves to be crucial for success and longevity within the creator economy. However, where content lives and who has the ultimate authority on how it is formed, distributed, and monetized will be an interesting development as Web 3.0 continues to take shape and disrupt the norms so many are accustomed to. “Content is much more democratized” (Chou, #sponsored) because of the digital channels available now, but examples from the sports industry so far have shown the potential of Web 3.0 and how the framework can give more power to creators in the future as the economy grows. Others have recognized how similar the circumstances are to previous digital transformations – specifically, the birth of the internet and social media – and are taking steps to address the ambiguity that currently haunts Web 3.0. Next League, technology pioneer David Nugent’s new sport-focused firm already helping leagues like NASCAR, is working towards not just applying the new “technology to sport and media,” but providing guidance and “shepherding the industry with experience and thoughtful perspective – and creating positive social impact where they can” (Lemire, SportTechie). While there is still uncertainty about how exactly the “Third Age of Sport” (Wiltshire, SportBusiness) through Web 3.0 will arrive, it is a safe bet that creators, brands, and sports properties will continue looking for the signs of its presence in 2022 and beyond.