Rethinking the content ecosystem: a smarter way to create value

Mick Tsai
Mick Tsai
Aug 26 · 6 min read

The role of Contentos in reshaping the future of content

Photo by Life Of Pix from Pexels

There are four major roles in any content ecosystem.

1. Content producer

Any entity who produces content can be categorized under this role, it can be a professional production house or an individual content creator. Any content producer leverages its content to create the “influence power” among their audience.

2. Content consumer

Also known as the audience or the people who enjoy a form of content. By default, everyone is a content consumer in a content ecosystem. When a consumer watches a video, one is focusing their “attention” to this content. Attention is a limited and precious resource to anyone there are only 24 hours in a day, and around 8 of those hours are spent sleeping. Sometimes, a content consumer may contribute more to the content, such as giving feedback (Like, Share, Comment) or providing direct support to a content or its creator (donation or subscription). In this case, the relationship between a content and its consumers become bi-directional, which also means a deeper engagement occurred between the content producer and consumer.

3. Content platform

A product or a service which facilitates the interaction between the content producer and the content consumer. This product facilitates content production and sharing and typically requires storage to host the content and its engagement data. This platform also showcases content to consumers who would then be providing feedback to the platform. In short, the content platform is the middleman to ensure the process of exchanging a creator’s “influence power” for a consumer’s attention, can run smoothly.

In any content ecosystem, a closed-loop content value is created when “influence power” and “attention” are in constant exchange. A good content platform attracts content producers onboard to create content. Then these contents attract more consumers who would then contribute their attention and engagement to the platform. It then gives a better competitive edge to the content platform which will attract more content producers to join the ecosystem and produce content…

It looks perfect, doesn’t it? But did you notice the problem?

Before introducing the fourth role, let’s first talk about business value. If a content ecosystem only has three roles (as mentioned above), how is business value created? How can revenue be generated to cover expenses from the platform’s storage and daily operations? Without any external value or “fiat money” input to a content ecosystem, this ecosystem will collapse, sooner or later. In today’s practices, to have a revenue stream in any content platform, it usually means the revenue shared either from any peer-to-peer (P2P) transactions in the ecosystem or from advertisers who wants to perform customer acquisition through the ecosystem.

The first model, the “revenue sharing from P2P transactions” can be seen in https://www.patreon.com/ (subscription) or LiveMe virtual gifting (donation). The major issue of this model is the platform always has the right to adjust the revenue sharing model, a good reference can be found here: (https://www.theverge.com/2019/5/1/18524511/patreon-pricing-tier-change-rollout-may-7-new-creators)

The second model, the “revenue from advertisers” is the most common revenue model to support any content platform. It’s also a very common monetization model (ie, sponsored content) for content creators, but only a select few creators have support from an agency to work with the advertisers directly. For most medium or small content creators, its relatively easy to rely on a content platform to takes care of advertisement deals and share the revenue with the platform.

Now we can see the fourth role, the advertiser, who is willing to “link” the external value (fiat money) to the content ecosystem in exchange for potential customers. This eventually creates a self-sustained content ecosystem.

It seems a perfect world, but a new problem emerges — value distribution. Any content platform is operated by a company, and a company requires growth to make more profit. This is especially true for any publicly listed company since investors want to see more growth in each quarter compared with the last one. The requirement for constant growth eventually gives a platform motivation to adjust the way to distribute value.

For instance, in a P2P model, changing the transaction fee is the quickest way to increase the revenue (https://blog.patreon.com/updating-patreons-fee-structure). In the advertisement model, platforms can also either change the revenue-share percentage or change the qualifications for the revenue sharing program (https://variety.com/2018/digital/news/youtube-changes-partner-program-google-preferred-advertisers-1202665815/). Platform can even leverage the viewership distribution via algorithms which will allow content that create more revenue, or the so-called “brand-safe content,” more exposure to new audiences. The fundamental problem is the platform’s interest is not aligned with the content creators, the audience, and the advertisers. The platform’s interest is aligned with the company’s growth goal and to maximize profits for its investors. When conflict happens, the platform can certainly choose to protect their company and investors’ rights even if it means sacrificing creators, the audience, and advertisers. The value-sharing problem is just like the pie-sharing problem — if a platform wants to get a bigger piece, someone else must get smaller slices.

People may say: “Just make the pie bigger and bigger so we can make sure everyone is happy.” But the reality is, constantly maintaining high growth rate for every quarter is almost impossible for any platform. A bigger ecosystem requires more storage/network consumption and higher operations costs, which requires more external value input from either P2P transactions or advertisers. It also means a bigger user base so that more transactions can happen or more potential customers for advertisers. Eventually, when the speed of new users joining the ecosystem is slower than the speed of the growth requirement from a company, the content platform needs to figure out another way to create more profit and meet investors’ growth expectations.

How can we solve this problem?

Let’s rethink the relationship among these four roles. In the traditional business world, only the content platform is related to the company, and the company has investors, management team, and employees. When the platform grows, share prices go up which benefits everyone in the company. However, without content producers, audiences, and advertisers, a content platform has no value. It’s not possible to issue shares or stocks to anyone outside the company based on today’s financial regulations, so there is no instrument which would allow a content ecosystem to connect all four roles while making sure everyone benefits from the growth of the whole content ecosystem. That’s why we think a token currency in the content ecosystem could be a possible solution. This paves the way to a new type of ownership which represents contribution to a content ecosystem and the right to participate in the governance in the system.

That’s what we plan to do in cos.tv and the Contentos blockchain.

cos.tv is a content platform which will have its own fiat revenue from both the P2P model and the advertisement model. In the meantime, content producers can earn fiat revenue from cos.tv while also being rewarded with COS (or more precisely, VEST) from content creation via content-mining. When consuming content, the audience can receive POP from cos.tv as the audience is also encouraged to engage with the content by contributing feedback such as P2P transactions, UpVote (Like), Comment, or Shares so the audience can be fairly rewarded with COS (VEST) with these positive contribution to the ecosystem. Advertisers can not just enjoy a transparent data source to track each sponsored content’s performance, but “staking” COS is also possible in exchange for ad promotion opportunities on cos.tv. In future cos.tv product updates, the advertiser will also receive the COS reward from cos.tv when issuing ads when spending fiat money in cos.tv. This helps advertisers not just by having the “fuel” to run the Contentos smart contract and make the business deals with the content producers, but to also become a part of the ecosystem in a more involved way.

COS tokens will become an instrument to connect all four roles in the Contentos content ecosystem. Meanwhile, with the future fiat revenue from cos.tv, a potential revenue share model can be created or even a new buyback-and-burn program. It’s the future that the Contentos team envisions to recreate a healthier, self-sustained content ecosystem that benefits all major participants.

Contentos

Contentos is a universal decentralized content ecosystem recently invested by Binance Labs, the blockchain incubator of world’s largest exchange. It aims to create a decentralized content ecosystem, where assets can be freely produced, authenticated, and distributed.

Mick Tsai

Written by

Mick Tsai

Co-Founder of Contentos.io

Contentos

Contentos

Contentos is a universal decentralized content ecosystem recently invested by Binance Labs, the blockchain incubator of world’s largest exchange. It aims to create a decentralized content ecosystem, where assets can be freely produced, authenticated, and distributed.

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