How NFTs are Changing The Creator Economy
When it comes to creating something, human imagination and expression are essential. These two principles combine to produce works of art that inspire and grant civilization precious gifts. It’s a process that makes humanity richer in terms of intangible value and advancement.
Rampant piracy has plagued the art market for centuries. However, piracy faced a worthy opponent in the form of the creator economy – a combination of people inhabiting the digital space who produce content of every kind. By monetizing this content via various channels, communities pay to access creative, unique, and engaging media.
Blockchain solutions have also come up with a powerful weapon. These innovations give creators the platforms and instruments that they need to protect both their contents’ rights and their incomes.
In with the Creators
The creator economy received a significant boost in 2020 from the pandemic. Statistics show that millions of people under lockdown opted for spontaneously created digital content. Mainstream television, film, and other industries faced a massive backlog due to disrupted communications worldwide, affecting their supply.
The popularity of online artists on TikTok and other platforms surged, with over 50 million people worldwide considering themselves to be creators in 2021. This number also includes 2 million professionals. YouTube has allowed 25% of professionals to rake in revenues, followed by around 30% on Twitch. The remainder is distributed across numerous other platforms catering to acting, writing, music, illustration, podcasts, and other media types.
“Creator Earnings, Benchmark Report 2021”, published by influencermarketing.com, found around 43% of all creators earn approximately $50,000 annually. These figures are backed by the $800 million yearly growth of the creator economy in 2020.
The entire creator economy is estimated to be $104 billion, with 77% of all creator revenues coming from brand sponsorship sources. However, creator income levels correlate highly with the size of their audiences. A creator can take as much as four years to build an audience that will generate an income of around $20,000 a year.
The NFT Factor
The Non-Fungible Token market has experienced an unprecedented surge since the beginning of 2021. In total, it rose to over $400 million in traded volume on Ethereum by March, up from under $41 million in 2018. The rise in popularity is partly due to recent NFT popularity in the press, considering that trading volumes have decreased lately. But that does not diminish the value NFTs offer creators globally and the lucky holders of the unique assets tethered to the tokens.
With Beeple selling “Everydays: The First 5,000 Days” for over $69 million and Twitter’s founder receiving over $3 million for an NFT tweet, the possibilities for artists with NFTs are broad.
Major auction houses like Christie’s are launching their own NFT marketplaces, while luxury brands like Gucci are eying the possibility of releasing unique branded items with NFTs. Creators are also taking the same opportunities with the multitude of NFT platforms emerging on the market.
The significant advantages NFTs offer are embedded right in their code. These ensure the immutability of ownership rights and their complete transparency. As such, creators can be confident that their content’s ownership and authenticity rights are secure. The owners will also have peace of mind, knowing that they possess a truly unique work of art.
The Bridge Between NFTs and the Creator Economy
Though there are numerous platforms for expressing creativity, NFTs are currently proving to be an instrument of choice for both novice and established artists. The format is relevant in the modern world and maintains the pace of an ever-evolving creative landscape. NFTs are open to all art forms, even including physical pieces.
The token standard also competes with social video platforms. NFTs are advantageous with the scope of assets associated with the token, extending well beyond short video clips. While anyone can view an Instagram video, there is no concrete concept of authenticity and ownership present in their code. One-of-a-kind formats like NFTs tend to, however, surge in value as we can prove ownership.
Be it a meme, a priceless work of art, a music album, or even a car, NFTs cement ownership rights. This aspect eliminates the biggest challenge creators have ever faced – forgery. The blockchain acts as the guarantor, allowing creators to focus on what they do best – creativity, expression of identity, emotions, and producing works for audiences to admire. The technology also combats the loss of income siphoned by piracy that demoralizes creators and robs them of their rightfully earned revenues.
Though NFTs have entered the mainstream since this 2021, thanks to the frenzy of interest surrounding them, it is unlikely that they will be just a fad. The creator economy is rapidly catching up with traditional entertainment media, as mobile viewership surpassed 50% of all global traffic in Q3 of 2020, reaching 54% by Q1 of 2021. (*data sources quoted from statista.com)
NFTs play a role in the growth of mobile audiences, as next-gen mobile systems implement NFT mechanics. We now live in a world of collectible card games, gachas, and other applications that attract younger audiences that value the status that comes with possessing a unique item. Creators and the collectors are in a win-win situation that market dynamics clearly illustrate.
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