The Creator Economy enabled content creators, influencers, freelancers, and streamers to monetize their passions, unique skillsets, and social capital to build personal brands that function as businesses. This transition has enabled individuals to monetize their human and social capital – natural skillsets and social media prowess – most often using an advertising or subscription-based model.
Without question, the Creator Economy has improved the lives of millions of individuals and generated billions of dollars in value around how these creators monetize and manage their audience. In the Creator Economy, creators develop and distribute content, and in exchange they receive revenue from advertising (i.e. YouTube or Spotify ads) or in some cases, sell direct subscriptions (i.e. OnlyFans, Patreon, Substack). The only flow of value the audience receives is content.
As a creator or influencer grows their network, much of the value resides in the strength of the communities they develop. After all, content creators, podcasters, YouTubers, and other influencers become incredibly wealthy and successful, in part because of their loyal fanbases that make advertising possible.
One can make the argument that fans are receiving something valuable in return, free content. But, this misses the point on two key issues. The first issue is that a creator has to make their content free until they hit a certain flywheel where they get paid enough to quit their day-job. In the beginning of the Creator Economy timeline, early fans that initiate the flywheel provide greater value to the creator’s new community than later arriving fans.
Second, while consumers sacrifice attention in exchange for free content or services, all attention is not equal. The attention of individuals willing to pay or help build a community is meaningfully more valuable than bystander consumers. Currently, both types of fans are treated equally. Additionally, as a community grows, earlier fans lose value since the increased number of fans dilutes their connection to the creator.
Rise of the Community Economy: An Economy for Fan and FollowersEssentially, the earliest and most active subscribers, listeners, or viewers aren’t compensated for their attention and passionate support. How many times have you found a talented creator early in their career and thought, “How can I invest in them” before they inevitably moonshot into stardom?
Social tokens present a mechanism to align incentives and are one potential answer to the shared success of creators and community. This is the transformation of the Creator Economy into the Community Economy.
In the Community Economy, creators make money from token issuance, which can act similar to tiered subscriptions where individuals must hold a certain amount of tokens to receive a service or content. Additionally, creators can still monetize through ads although at a decreased rate since creators will distribute less content for free.
Early fans that purchase the tokens are incentivized to help the creator, share their content, and expand the creator’s audience. In turn, this brings in new fans and new token holders. Earlier token holders benefit from increased token price and a means to value their relationship with the creator.
The Community Economy – enabled by cryptonetworks and social tokens – incentivizes enthusiasts and early followers to use their underutilized skills and assets to support a community or individual. The transition to the Community Economy will continue to evolve as the best incentive mechanisms are implemented. While not all creators will accept input from the community, many will realize the value created by their most loyal followers. As the saying goes – if you want to go fast, go alone, if you want to go far, go together.