THE GREAT RESHUFFLE: FAIR PAY IN WEB 3 FOR UGC

The internet is fuelled by user-generated content. From YouTube, Instagram, TikTok clips to Roblox games to this very post…The open internet has transformed into a wild west of creativity. The platforms that rule the land—where people go to be entertained, informed, and inspired—are riding hard on the fertile creative landscape.

As user-generated content continues to go through the roof, how will creators make money off of it? Will they have full ownership over their content? Can they move it around?

These are questions that only Web3 can answer.

INCREASE IN THE DIGITAL FOOTPRINT

According to the? “Digital Content Creation Market - Global Market Share, Trends, Analysis and Forecasts, 2022-2032 ” report, the digital content market size in 2019 was approximately $11B, and this value was expected to grow at a compounded rate of 12% by 2030. With how things are going, I have a guess it will be more though.

We can see that digital content creation is experiencing a renaissance because of the declining cost of digital content creation, the increasing number of people with internet access, and the proliferation of smartphones and tablets. The pandemic was also a huge catalyst to this market boom which drove people to consume more content but also to create it. The confinement forced or enabled people to reconfigure their work strategy and find new and entertaining ways to get revenue. This thing increased the digital footprint staggeringly.

ROBLOX & TIKTOK AS USE CASES

If you don’t live under a rock, you’ve surely heard by now about Roblox and TikTok. These two giants are the epitome of UGC in their industries and are well aware of its financial potential. They don’t have to lift a finger in terms of content, they just need to provide accessibility to the proper tools, for the content keeps on coming. And so does the money. But, despite the implications around “content being generated by the user,” users historically have been poorly compensated for their labor. But trends are shifting.

Imagine a world where you can create and play an almost unfathomable array of games. That would be pretty awesome, right? Well, that’s Roblox. Every day, 43 million people make their way to play these experiences, mostly kids. It’s safe to say that some of the most popular games have received billions of visits and earned their developers millions annually.

According to a new report by People Make Games, this model may take advantage of young game developers. This video “How Roblox Is Exploiting Young Game Developers ” takes a deep dive into the promise of “making it” on Roblox and alleges that the platform actually sets kid developers up for failure. Even though developers earn a percentage of their work, the bigger chunk goes into Roblox's pockets. All in all, it is very challenging to make money on Roblox, only a few really make it and Roblox profits from people trying.?

Outside the gaming sector, TikTok is a platform that has traditionally not been the most lucrative for creators, yet the company is stepping up its game.

Now, through the TikTok Creator Fund, the platform gives creators who fulfil the requirements , the chance to share in the ad revenue from sponsored posts they create. So now you can get paid on the platform to make your content. We can laugh all we want but those kids shaking their butts in those viral videos are most likely getting more coin than us, and that was before being able to monetise their content on-platform.

This relatively new initiative entitles those creators to 50% of the revenue from campaigns, which is a massive boon for an industry that has forced creators to negotiate relationships off-platform to monetise their reach. That’s not all. Another way to make money on Tiktok is by taking donations from your followers/viewers. It works similarly to Twitch, where your fans donate cash to appreciate your live stream. You can turn on Live Gifting while live streaming on TikTok, get awarded in real-time, and cash out your rewards through PayPal. They went the crypto way, for TikTok has several in-app coins that viewers have to purchase before gifting them to their favourite influencers. This is a huge incentive to engage users to be connected at all times, and their presence alone generates revenue. I need to get on this app.

We’ve seen that the model works. It’s a self-reinforcing cycle. Users love creating, and they doubly love getting paid to create. But who are the ultimate owners of this infinitely expanding universe?

OWN YOUR SHIT AND GAIN CONTROL

The problem with most user-generated content platforms is that they own the content users create. A user has no rights of transfer, no rights of sale, and no recourse should the platforms suddenly change their minds dramatically about the compensation splits. Facebook has been criticised for censoring certain types of content or even banning people for stuff they don’t agree with. This is an alarming situation because it restricts the freedom of speech and expression for many individuals who use these services regularly.

I think user-generated content is one of the most important features in Web3. The reason why I say this is because it allows for a much greater degree of freedom for users. In other words, you have more control over your own creations and don't have to rely on some third party to do it for you. This will make it easier for people to express themselves on social media platforms and other websites that allow users to create content and share it with other people.

Web3 has the potential to change the narrative by distributing provable ownership to creators as opposed to the Web2 status quo. You’d want to be able to take your “shit” and go off the platform if you have some disagreements with the platform itself or you could sell data about your personal browsing habits and get paid. You, NOT Facebook. This allows for greater privacy and control over your information but also opens up opportunities for users to earn money by selling their personal data to advertisers.

Digital ownership will open new incentive methodologies and markets for creators. In the Roblox example, this could mean creators would be able to buy & sell rights to each other’s maps, and for Youtube, Instagram or TikTok, this similarly could mean creators would be able to trade photos, clips, songs, and filters that they’ve created.?

Let’s talk about gaming abit. According to this article on Ancient8 , Web3 blockchain games will unlock the full potential of UGC. This are just a few scenarios (more in their blogpost) they’ve come up with and I think they’re fantastic:

True ownership: Developers might view UGC as a way to gain free or low-cost creative labor. There needs to be a fair and transparent environment for players and creators to connect and collaborate on projects. Blockchain technology allows creators to truly own and control their content in the form of NFTs. Users can also retain ownership and control of their data and can choose how to use or share it.

Virtual world interoperability: As NFTs are stored on blockchain infrastructure, once implemented at scale with deep integration, tokenized items like avatar skins in games, weapons, accessories, characters, or real estate, will allow for seamless transfer of objects between different virtual worlds. This will generate more revenue for original NFT content via royalty fees and reduces the risks of original game bankruptcy that would lead to the death of user content in Web2.

Tradability: Any creator can produce (or mint) an NFT of videos, photos, in-game characters, items or any other kind of artwork. These can be traded as assets on an open market which makes monetization significantly easier. NFT markets such as OpenSea, Rarible, and Nifty are opening new distribution channels for creatives and allow them to have complete control of their work by establishing clear copyright rules, transparency of ownership, secure transactions and enforced royalties.

UGC ON STEROIDS IN WEB3

Tokens, the incentive tools in Web3, enable digital ownership by creating a new asset class that represents an individual's right to perform or consume something in the future. This will make everything smoother, eliminating third parties that may not have our best interest.

Web3 is just the technological infrastructure of the Metaverse, and seeing how much can the new web enable, we can hypothesise that this emerging 3d world, may give rise to new products and services, new job profiles, and new business models. The preferences are shifting and according to this study on the Economics of Web3 and the Metaverse we’re heading to a “Great Reshuffle”. Humans are not only interested in the Metaverse’s products and services but also in its way-of-living and -working. And as per preferences for organising, many Gen Z individuals view corporate hierarchy with contempt and tend to get involved in new organisational forms with flatter hierarchies in the Metaverse, such as DAOs.

As mentioned in a previous article, people, respectively Gen Z, are looking for fulfilment and meaning, rather than work that’s financially rewarding. This leads to hybrid modes of work that will shape the future of work in the Metaverse. Remote work options in the virtual world will lead to an integration of global labor markets and lower barriers to jobs in high-wage countries. The Metaverse will also produce new business models and job profiles, such as smart contract lawyers and digital fashion designers. A famous example is RTFKT , a bespoke digital shoemaker that reports several million USD in revenue from selling customised digital footwear to avatars. Burberry and Louis Vuitton have followed with digital fashion products, among many others, to equip avatars for the Metaverse. This blows my mind.

But this is all speculative, who knows what the future holds and what the next generation of builders will do with the power to transfer, trade, and verify assets without centralised counter-parties?

In conclusion, it’s not hard to imagine a world as the one imagined above. Web2-based influencers are the prototype for a new class of people that make their living online, so it’s not a stretch to believe that work could be entirely virtual and non-fungible. In Web3 this user-generated content will boom, thanks to true ownership of “physical” digital assets. Users will want to market themselves because they’re their own product, they are incentivised to be better and that thing drives creativity off the charts. This is fantastic because that’s how true innovation emerges, by disrupting or incrementing existing models. And the competition will be, alongside a shit ton of creations.

The end result will be “liquidity” markets, both in terms of user acquisition and actual cash liquidity, driving innovation at the industry level and value growth at the individual level.

Builders have now the power to really produce cultural shifts by creating ecosystems where people can generate valuable content that they can actually own. We just need to provide the tools to make that happen and witness the magic unfold.