Believe it or not, Content is a digital currency.
While discussions often focus on tokenizing ‘real-world’ assets, referencing traditional financial elements, content — precisely accounted for in terms of user retention and data — is an already liquid and tradable digital asset.
This form of currency is fundamental in constructing decentralized creator economies and is crucial for the widespread adoption of one of blockchain technology’s main features: micropayments.
Streaming services have become a cornerstone of entertainment consumption. However, despite their popularity, the economic models of these platforms often place creators at a disadvantage. The current subscription and advertisement-based revenue models pose limitations for creators, especially those with smaller audiences. Micropayments, a concept long discussed but less implemented, could spearhead a shift in this ecosystem, offering a more equitable and direct way of compensating creators. This article explores how integrating micropayments into streaming services can transform the creator economy.
The Current State of Streaming Services
Streaming services have democratized content consumption by offering users a plethora of choices through subscription-based or ad-based revenue models.
Both models have drawbacks: Ad-based models can be intrusive and detract from the user experience, while subscription models often favor popular content, leaving niche creators at a disadvantage.
The economic model of major streaming services like Spotify is frequently criticized for its low payouts to artists. Reports indicate that Spotify pays between $0.003 and $0.005 per stream, meaning an artist would need about 250 streams to earn a dollar. This model heavily favors popular artists and leaves smaller, independent artists struggling to earn substantial revenue.
Micropayments: Why Traditional Payment Methods Don’t Work for the Creator Economy
Micropayments — small financial transactions often less than a dollar — can revolutionize the way creators are supported on streaming platforms. This model enables users to pay small amounts for the content they consume, directly supporting the creators. The implementation of blockchain technology, like Coreum, can facilitate these transactions, ensuring transparency and minimal transaction fees.
Benefits of Micropayments in Streaming
- Direct Creator Support: Unlike indirect revenue models, micropayments ensure that money goes directly to the creators. This more equitable line of support can significantly boost earnings, especially for creators with smaller but dedicated fanbases.
- Encouraging Quality and Diversity: When viewers pay directly for the content they watch or listen to, there’s a natural inclination towards quality. Creators are incentivized to produce content that resonates with their audience, leading to a richer and more diverse content ecosystem.
- Enhanced Viewer Experience: Micropayments can reduce reliance on advertisements, leading to a more enjoyable viewing experience. Furthermore, they empower viewers to support the content they love, fostering a closer connection between creators and their audience.
Some projects, like Videomaster, have already started to reap the rewards of a blockchain driven micopayment protocol.
“While pioneering a streaming platform that empowers users with innovative payment options, we have had the privilege to collaborate with Coreum in building something truly special. By integrating micropayments and NFTs as passes to watch videos into Videomaster, we are redefining the creator economy and enhancing the streaming experience for both creators and viewers. This partnership marks a significant step towards a more equitable and sustainable model for content consumption, one where creators are directly supported and rewarded for their work.” — Andrew Kaskaniotis, CEO of VideoMaster
Challenges and Considerations
While the benefits are clear, transitioning to a micropayment model presents challenges. User habituation to free or subscription-based content is a significant barrier. Additionally, integrating micropayment systems into existing platforms requires technological investment and a rethinking of revenue models.
The integration of micropayments into streaming services represents a transformative opportunity for the creator economy. By enabling direct, small-scale transactions, this model can create a more sustainable and equitable ecosystem for content creators. As digital content consumption continues to grow, it’s crucial for platforms to consider innovative economic models like micropayments that can better support the creators at the heart of these services.
It’s akin to Netflix allowing payments of $1 to watch a specific episode, or opting to pay for a particular article from The New York Times rather than subscribing to the entire publication. This flexibility breaks open the rigidity of traditional flat fee models, offering a la carte options that could revolutionize content consumption.
About Coreum
Coreum, the world’s first Superledger. A 3rd-generation, layer-1 blockchain architected for enterprises of any size, from startups to large corporations. Providing a remarkable transactional speed of up to 7,000 TPS and ISO20022 compliance ensures expedient and economical transactions across a swift and secure PoS network.
Learn more & follow along.
Website: coreum.com
Twitter: @CoreumOfficial
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Written by Favio Velarde & Zack Rice
