“To be a successful creator you don't need millions. You don't need millions of dollars or millions of customers. To make a living as a craftsman, photographer, musician, designer, author, animator, app builder, entrepreneur, or inventor, you just need a thousand true fans.”

This is a phrase of a popular article from 2008 where the author talks about the internet as a new platform where creators will be able to support themselves and live off of what they create.

A true fan is defined as a fan who will buy anything you produce. These die-hard fans will drive 200 miles to see you perform; they will buy the hardcover, paperback and audible versions of your books and they will buy every swag of your new fashion brand.

For this vision to be real creators should be able to take the whole cut of what they commercialize. But reality is different. Because of how the current content distribution networks operate, creators can take at most 50% of what they generate (e.g. YouTube). There are other fairer models emerging like substack or medium who charge 10%, but they represent a very small percentage and also don’t allow you to use other monetization tactics, you are still a prisoner. The powerhouses of content have no incentives to start re-distributing value with their creators.

With web3 we are seeing a revival of this vision allowing creators to achieve sustainability easier and even creating their own micro-economies. We are witnessing the creation of new business models and these are so far the relevant trends related to the creator economy:

NFT Sales

The first way in which the new economy will allow creators to earn more is by increasing their margins using web3 open protocols with lower cut rates. For example, by taking a 99% percent cut a creator can make 100.000/year in many ways:

• Selling a $5,000 product to 20 people = 100,000 USD / Year

• Selling a $2,000 product to 50 people = 100,000 USD / Year

• Selling a $100 product to 1000 people = 100,000 USD / Year

• Selling a $50 product to 2000 people = 100,000 USD / Year

Product differentiation

Under the traditional model, creators charge the same from all consumers disregarding their wealth and preferences. With NFT’s and tokens, creators can aim to monetize all levels of their audience by leveraging those who are most willing to pay (the real 1,000 fans) and also profiting from smaller or bigger offerings.

Cheap marketing

Tokens like Bitcoin or Ether reached trillion dollar valuations only by word of mouth. This is because people having ownership spread it like a virus, providing free advertising for the current token or protocol. The same thing apply to fans, by being owners, they become advocates of the creator, attracting new followers.

Financialization

Thanks to smart contracts creators con now embed into their NFT products some form of royalty or shared success. They can offer fans the chance to share economic rewards, for example selling a song in an NFT mint that includes a percentage of royalties to be distributed among NFT owners. This innovation is still very early but theoretically it should be possible to monetize instantly the revenue from the streams of a song and re distribute that into the fans wallets.

Conclusion

Reaching 1,000 paying fans is no easy task. It implies, for example, having at least 50,000 fans and being able to monetize 5%. But even so, it is much less ambitious than the millions and millions of streams you need to live off of Spotify. Thanks to NFTs, creators will invent new ways to monetize themselves, give ownership to their followers, add them to their team of marketing “volunteers” and along the way generate income to support themselves and even redistribute that to their followers.

“To be a successful creator you don't need millions. You don't need millions of dollars or millions of customers. To make a living as a craftsman, photographer, musician, designer, author, animator, app builder, entrepreneur, or inventor, you just need a thousand true fans.”

This is a phrase of a popular article from 2008 where the author talks about the internet as a new platform where creators will be able to support themselves and live off of what they create.

A true fan is defined as a fan who will buy anything you produce. These die-hard fans will drive 200 miles to see you perform; they will buy the hardcover, paperback and audible versions of your books and they will buy every swag of your new fashion brand.

For this vision to be real creators should be able to take the whole cut of what they commercialize. But reality is different. Because of how the current content distribution networks operate, creators can take at most 50% of what they generate (e.g. YouTube). There are other fairer models emerging like substack or medium who charge 10%, but they represent a very small percentage and also don’t allow you to use other monetization tactics, you are still a prisoner. The powerhouses of content have no incentives to start re-distributing value with their creators.

With web3 we are seeing a revival of this vision allowing creators to achieve sustainability easier and even creating their own micro-economies. We are witnessing the creation of new business models and these are so far the relevant trends related to the creator economy:

NFT Sales

The first way in which the new economy will allow creators to earn more is by increasing their margins using web3 open protocols with lower cut rates. For example, by taking a 99% percent cut a creator can make 100.000/year in many ways:

• Selling a $5,000 product to 20 people = 100,000 USD / Year

• Selling a $2,000 product to 50 people = 100,000 USD / Year

• Selling a $100 product to 1000 people = 100,000 USD / Year

• Selling a $50 product to 2000 people = 100,000 USD / Year

Product differentiation

Under the traditional model, creators charge the same from all consumers disregarding their wealth and preferences. With NFT’s and tokens, creators can aim to monetize all levels of their audience by leveraging those who are most willing to pay (the real 1,000 fans) and also profiting from smaller or bigger offerings.

Cheap marketing

Tokens like Bitcoin or Ether reached trillion dollar valuations only by word of mouth. This is because people having ownership spread it like a virus, providing free advertising for the current token or protocol. The same thing apply to fans, by being owners, they become advocates of the creator, attracting new followers.

Financialization

Thanks to smart contracts creators con now embed into their NFT products some form of royalty or shared success. They can offer fans the chance to share economic rewards, for example selling a song in an NFT mint that includes a percentage of royalties to be distributed among NFT owners. This innovation is still very early but theoretically it should be possible to monetize instantly the revenue from the streams of a song and re distribute that into the fans wallets.

Conclusion

Reaching 1,000 paying fans is no easy task. It implies, for example, having at least 50,000 fans and being able to monetize 5%. But even so, it is much less ambitious than the millions and millions of streams you need to live off of Spotify. Thanks to NFTs, creators will invent new ways to monetize themselves, give ownership to their followers, add them to their team of marketing “volunteers” and along the way generate income to support themselves and even redistribute that to their followers.