Does the phrase “creator economy” make you think of an ideal place where creativity, authenticity and passion are key? Do the true Michelangelos and da Vincis develop their art without struggling for food and exposure throughout their lives for a chance at fame after death? If so, I’m with you.
Although art has been around for as long as humans, we started discussing it as a new form of finance not too long ago. In addition, we now talk about it in the Web3 dimension. To better understand what it is, first of all, let’s go behind the scenes of the creators. How did we get here? Oftentimes, looking back is the best way to find out what is going on today. It won’t make you yawn, I promise.
Profile of the creator Economy
The creative economy revolution has been a long and uneventful coming. Now let’s explore the major economic and social changes that ultimately got us there.
1. From an agricultural to an industrial economy
In the middle of the 18th century, we had the Industrial Revolution which led to the jump from agriculture to manufacturing. This is where the industrial economy began, and it continued until World War II. The main function of the industrial economy was to produce more goods that would be accessible and affordable for a large group of people.
Unlike today, goods were scarce and not easily available back then. In order to achieve its goals, industrialization led to a major economic change, shifting power from agrarians to producers, and the latter became the basis of a new economic reality. Industrialization also brought a culture of persistence, competition and the development of new ideas about manufacturing and automation. This is what creative people were thinking about in those days.
This is not to say that there was no place for creative activities, such as music, writing or painting, in those days. However, they were definitely not number one on the list. Artists just keep going. Manufacturing has not been seen as a separate economic sector that deserves special support.
2. From industrial to consumer economy
After World War II, it was a time when manufacturers began to produce more products than people wanted to buy. Things were no longer scarce. The economy has a new challenge: getting the customer to want to buy what the market always has to offer. Therefore, the industrial economy paradigm began to be replaced by consumerism. Customers (or consumers) became the main part of the new economy, replacing producers.
Some of the key players who attended the event were retailers, distributors and media (TV, radio, newspapers, etc.). The main task of the first two was to ensure that consumers continue to buy, while the mass media strongly promoted the importance of goods, sustainable transport, and ideas around almost everything.
Also, mass media has started a phenomenon like pop culture, which starts with the production and distribution of products intended for the masses. Pop culture was supported by the so-called cultural industries that include design, printing, publishing, multimedia, audio-visual, cinematographic production, etc.
In contrast to the industrial economy, the consumerist mentality led to a variety of production and employment opportunities. However, planning, in general, was limited by one main requirement: It had to sell well to the masses. Here, with many producers, they were union workers. Building and growing your audience and making money from what used to be hard work. As Paul Saffo predicted, you can get noticed if you become a journalist or work in television. Creators who wanted the world to know about them always depended on the wisdom of producers, publishing houses and watchdogs of other kinds. Making those guys like you was important. Fortune was the most reliable option here.
3. From the consumer to the creative economy
In the 1990s, the consumer economy shifted to its digital dimension. Many sectors of the economy began to change with IT solutions. The new financial environment has created the need for a new type of technology – advanced and digital.
After a while, the governments of different countries began to declare that art is “a valuable resource that creates wealth and jobs.” They also introduced the new concept of “creative companies” with the umbrella term for them “creative economy” (not the creator!) and gave themselves the task of providing management and financial support for the latter to try. Some of the first countries to do this were Australia and the United Kingdom.
At the core of the creative economy concept was individual creativity, innovation and the use of intellectual property. Its appearance was very similar to one of the traditional industries mentioned – production, writing, audio, video, etc.
The new challenge here was to bring innovation to many sectors of the economy and meet the demand for new digital products and services.
Although the term “creative economy” may make us think of an artist’s paradise, in fact, as a consumer economy, its purpose was to serve the needs of consumers. It didn’t give creators new ways to turn their creativity into an independent business. Instead, the creative economy was about “creating through work” rather than encouraging creators to succeed on their own.
4. From nature to the wealth of the Creator
Another economic change took place when large IT platforms such as Google, Facebook, YouTube etc. appeared and started competing with social media.
During the global financial crisis in 2008, these platforms became so popular that traditional media were left behind. People began to live on them and use them as primary sources of knowledge, information and networks. This was the digital revolution. And this is where the producer economy started.
The mission of the new economic paradigm was to convert customers through engagement and participation. Unlike the consumer economy, where customers simply buy what is offered, the creator economy allows them to participate, interact and add value. It also opened up tools to promote themselves as “products” and monetize them.
Writers, musicians, artists and other types of creators have a great way to promote themselves and reach their fans. Instead of appeasing the old guards (producers, casting directors, publishers, etc.) to give them access, they can now easily use the power of platforms to share their knowledge and find their fans. The objections were rejected.
In many cases, it is not only professionals who have done this. Anyone with a laptop and internet can now get the chance to try themselves as a developer.
Related: The wealth of creators will grow exponentially, but not under the control of Big Tech
What does the maker economy mean in 2022?
Since there is no technical definition of modern economics, we can freestyle here:
In general, the digital economy (or Web2) is the financial sector of the Internet that is driven by digital platforms, marketplaces and tools that enable users to find and create content, as well as generate income.
The wealth of the creators does not mean that there are no barriers to entry or toss. All you need is to register and follow the terms and conditions of the platforms. Here’s the trick: When you use a platform, its algorithms collect some of your data and track you in some way. This is a participation fee.
Related: Web3 relies on participatory economics, and that’s what’s missing – participation
Platforms provide you with various tools to create, create and distribute products through advertising. The latter is the platform’s main source of income.
Another benefit of the creator economy is that it has opened up different ways of making money for creators. If in previous financial concepts the artist could earn money mainly by selling or licensing their IP rights, they can also do this through advertising, management, brand support, affiliate links, classification and many other digital marketing activities.
Even if your original content was not digital, you can still use the platform to advertise your work, engage and convert your audience, find different ways to work, etc. The sky is the limit here. However, some of your income always goes to the (well, big) platform.
In short, the main goal of the creator’s economy is to promote the creator’s online business by providing them with digital marketing tools and removing any barriers or discrimination.
Spoiler: The barriers are still there. They are just different. We will examine them in detail in the following articles.
Related: Accessibility is the biggest barrier to crypto adoption – Here are the answers
Why do we need to increase the wealth of creators on Web3?
I can probably answer this question by giving a big list of financial problems that have made us think about its upgrade to Web3. However, I believe that the main reason is not in these problems. It is a change in thinking that made us see these problems and realize that there could be a better way without them.
A major contributor to this change in mindset was crypto. It gave us an unbiased view, independence from third party service providers, 100% data ownership and independence. Crypto has created a new way of thinking and makes us look at ordinary things through different lenses.
Originally used in finance, the disruptive role of crypto has spread to many other financial sectors. We now call it the Web3 movement. And the economy of the Web3 developer is a special problem.
Here is the definition of Web3’s financial concept:
- Removing middle platforms between creators and their fans.
- The creator owns 100% of the data, quality and functionality.
- Transparency of business processes and income generation.
- Promoting real art instead of advertising-driven creations.
I will explain this in the following articles – so stay with me. We will also explain in detail the financial problems that are being created and see what kind of solutions Web3 has in store for us.
Related: Decentralization is changing the economy of creators, but what will it bring?
In short, the economy of the creators is part of the natural evolution that we have come to after going through all the development and economic changes described here.
The emerging Web3 paradigm of the creator’s economy aims to help creators create their own “open economy” where they can share with their fans and make money directly without looking to a third party. As some experts believe, if this model succeeds, we will enter a new economic era where producers will no longer be the only products. Instead, they will be a new asset.
This article does not contain financial advice or opinion. Every buying and selling move involves risk, and readers should do their own research before making a decision.
The opinions, views and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Julie Plavnik he has a Ph.D. in law, a former corporate attorney, and now a Web3 expert and prolific blog writer. Julie is excited as a child about the Web3 movement.