- Creator Monetization
Lesson #06: Are NFTs The Future Of Creator Monetization?
Why Creators Are Turning To This New Tech
As you've been learning over the last few days, NFTs are blockchain-based records that represent pieces of digital media. They contain foolproof provenance of the media's history and origin. For example, one popular feature is code in the form of smart contracts that enable the original creator to receive royalties from secondary sales.
There are three important reasons why NFTs offer fundamentally better economics for creators:
1) They remove middlemen to improve take rates;
2) They make users owners, thereby minimizing user acquisition costs; and
3) They distribute data into the hands of individual creators.
In this email, we'll explore each of these reasons in more detail and explain why we believe that NFTs are the future of creator monetization.
1) Removes Middlemen
One of the biggest advantages of NFTs is that they remove middlemen from the equation. With traditional monetization models, creators have to go through intermediaries such as record labels, publishers, or streaming platforms in order to reach their audience. These intermediaries take a big cut of the revenue, often leaving creators with very little money left over.
With NFTs, creators can bypass these intermediaries completely and sell their work directly to fans. This not only allows creators to keep more of the revenue for themselves, but it also gives them more control over how their work is distributed and presented.
2) Enables Digital Ownership
Another advantage of NFTs is that they make users owners instead of just customers. When someone buys an NFT, they become its owner and can do whatever they want with it. This is unlike traditional forms of monetization such as subscriptions or advertising, where users don't actually own anything and can be cut off from the content at any time at the whim of the original content owner.
The fact that users become owners when they buy an NFT has two important implications. First, it reduces customer acquisition costs because users are now buying ownership. Second, it creates a community of passionate fans who are invested in the success of the creator because their own wealth is tied up in it as well.
3) Distributes data
Finally, NFTs visualize data makes it widely distributable. By being able to transparently see who is buying what, creators can vet and identify who their biggest fans and supporters are. Finding and leveraging brand ambassadors can help creators unlock another level of fan loyalty and organic marketing that previously was harder to enable.
NFTs represent a potentially huge shift in how creators monetize their work. By removing middlemen and making users owners, NFTs offer better economics for creators than traditional models such as subscriptions or advertising. And because they're still in their early days, there's a lot of potential upside for those who get involved now. NFTs are an amazing tool for creators and artists looking for new ways to monetize their work.