The Web’s New Business Model
For Monetizing Content
Crypto allows us to reimagine the internet as an open financial system going beyond advertising-only or subscription-based models. There will come a point where content creators will be rewarded by letting them accept payments in the currency of their choosing without creating additional friction. If we utilize it fully, we could do away with costly middlemen and create a more transparent financial system free from rent-seeking behavior.
The idea that the business model for the internet is just selling ads is short-sighted. More than ever now is a golden era to invest in and consume media. Nicole Quinn of Lightspeed VC wrote:
“There isn’t just one way to generate revenue for a media business. Advertising revenue alone may not be the way forward but there are multiple other ways in which media founders are able to grow and monetize their customer bases.” — Nicole Quinn, Lightspeed VC
The hierarchy and political structures of traditional technology companies and markets don’t exist in the blockchain and cryptocurrency ecosystem. The current business structure of the internet today, 3.0, will have to bend towards how the individual wants to work and not the other way around. The new wave of publishers won’t be big monoliths or tied to gatekeepers who control distribution. They’ll be individuals, influencers, entrepreneurs and freelancers.
Through the programmable nature of crypto and micro-transactions, a wealth of new revenue sources for businesses will be created. In particular, media business — broadcasting, publishing, and the internet. Below are two use cases of how crypto is already enabling new monetization and business models for media:
In just seven months Y’alls, a Lightning-powered blog saw 20,000 Bitcoin micropayments. Publishing an article costs around 6 cents. It costs roughly one cent to read a Y’alls article, half a cent to leave a comment on a post, and 10 cents to react to a post with an emoji. During this time period, contributors posted 170 articles with readers paying for 675 emoji reactions and 194 comments. Writers claimed their bite-sized crypto rewards at least 432 times during the same period, collecting the fees from readers for their articles.
Readers can tap into Y’all’s Lightning node-and-channels system without a traditional subscription, like most paywalled outlets. Unexpected positives also came with the use of micropayments. “One nice thing about micropayments is that it brings back anonymity to the web,” Y’alls Founder, Alex Bosworth, told CoinDesk. “I’m really a fan of the idea that your identity doesn’t have to be tied to a username and password.” Additionally, reduced friction will lead to higher rates of conversion.
Another example is Unlock. Unlock self-identifies itself as “the Web’s new business model.” Unlock is a protocol which enables creators to monetize their content with a few lines of code in a fully decentralized way.
The willingness to pay has probably always been there but there hasn’t been the simple mechanism to enable micropayments. Unlock’s belief is that the reason most people don’t pay for things is not so much because of their price. It’s because of how complicated it is to actually pay for things like creating accounts, entering credit cards and being secure. “We hope to eventually unlock a virtuous circle where reduced friction leads to higher conversion rates,” stated by Julien Genestoux from the Unlock team.
This mechanism will most likely favor entrepreneurs and creative types like writers, musicians, and artists who have been reliant on rent-seeking business models. With increasing adoption and people experiencing the utility of cryptocurrency this will be possible.
Technologies, used in a crypto-native way, will enable entrepreneurs and freelancers to operate more independently without having to work for traditional hierarchal business structures. As we transition into the next wave of the internet, winners of the past will have a hard time adjusting to crypto. However, I believe creative entrepreneurs, such as writers, might be best positioned to capitalize on the shifts that will occur in the crypto-powered business models of internet 3.0.