A post-advertising Internet

Alternatives for ad-supported business models are gaining ground and are aligning with trends around decentralization [Part 4/5]

Contents:

  1. Introduction
  2. Contextual Media
  3. Community Parity
  4. Post-advertising Business Models
  5. Reputation

Decentralization and Independence

In the 1997 book The Sovereign Individual the authors describe a macro-trend that seems to align with the trajectory technology has taken over the last few years. The book presciently argued that the social influence and economic power enjoyed by institutions and the wealthy few would inevitably become distributed along individual agency. This re-ordering, the authors argue, where people could gain more control over their lives by becoming ‘sovereign’ entities, will not come about by some form of grand re-distribution strategy but rather far more efficiently: through the decentralized nature of technological progress.

I maintain a zealot-like belief that for artists to become self-sustaining, the economics of how content is paid for on the web needs to be upended. Ad-supported business models have become more of a barrier than bridge, and are intrinsically centralized systems.

Ad-supported platforms still dominate the content landscape, though anti-ad sentiment is sounding less shrill. Many startups have actually gained hard-won legitimacy during this time while offering some compelling ideas. Some of these ideas are worth exploring since many tend to empower the creator over centralized platforms. This single trend is worth leaning into — especially if we’re intent on making the internet better for the creative class.

Alternate Models

Advancements around micro-payments powered by fascinating new technologies like blockchain allow for intriguing prospects for creative content makers. Ethereum and Blockstack have all hinted at a possibility where individual creators could re-assert control over content ownership, distribution and economic value.

If evolution means the gradual change from one state to the next, I expect that advertising as a means of getting paid for content will overlap. For us over Maven we’ll be using many of the following alternatives in tandem, beginning with one-off donations but moving into paid subscriptions and tokens.

1. The Affiliate Model

eg: Amazon Partners/YouTubers (various)

This is fairly straightforward and is probably one of the most established models. An example as follows: a video creator (an affiliate) sends viewers to a merchant website via links after video-reviewing a product. If the viewer of that video completes a transaction after clicking through, the affiliate creator receives a commission on the sale. Affiliates are encouraged to employ this strategy in “high-margin areas” such as accessories (make-up) and other technology products (games, gadgets).

In my experience with Maven this works particularly well with our book reviewers. Amazon has an affiliate program and book lovers are encouraged to use affiliate links where possible. It also has the added benefit of being hyper-relevant to any given viewer, since they would be already showing intent by watching review content.

2. Platform Token Systems

eg: Steemit.io, Yours.Network

While the idea of issuing local token currencies is nothing new (think Disney dollars) the adoption among established content platforms is almost nil. As the relatively easier to adopt ad-model has pervaded, there has been little interest in trying to figure out how small transactions could be synthesized on the internet. This is another effect of a pervasive ad-model: the stagnation of technical innovation around payments. The idea of token systems however, have stuck around, waiting around for its second wind.

I think that second wind may be about arrive with advances in peer-to-peer cryptocurrencies. Smart contracts allow for the issuing of tokens backed by distributed blockchains. Token based projects have employed smart contracts for social networking sites such as Steemit and Yours. Here local currencies, such as ‘steem’ in Steemit’s case, are issued to users in order to create a virtual, platform centric economy.

3. Micropayments

eg: Blendle, Brave Browser, Imzy, Flattr, Maven

Similar to the token model in that creative content would be exchanged for payment, platforms are now able to incorporate micropayments as a central part of their eco-system. Journalism startup Blendle for example allows users to top-up modest sums of money into an in-app wallet that they can then distribute granularly across individual articles (0.30p to o.90p). Imzy, a new community network allows for tipping posts.

There has also been an increase in services fuelled by ad-blocking adoption. New internet browser Brave allows users to donate to their most frequented or favourite websites. Flattr and AdBlocker have just teamed up to do something similar across any browser via an extension.

The move toward micropayments for content makers represents more than a technological trend or opportunity. Frustrated by ad-dominated landscape, the push for direct monetisation also represents a push for independence and self-empowerment.

This video explains how:

4. Community Patronage

e.g Patreon

The recent adoption of the term patronage has been popularised by platforms like Patreon who by using a mix of community incentives and crowdfunding pledges have allowed independent artists to gather financial support from a community of followers.

Following on from the 100,000 fans ideal — on the internet, as the theory goes, you only need around a 100,000 superfans to become self-sustaining as an artist — the team at Patreon should be credited with popularising artist support as not just an ideal but as a viable path for creative projects. Taken to it’s logical conclusion patronage could allow independent artists to maintain recurring revenue from the communities that consume their work.

5. Paid Subscriptions

eg: Medium, Maven, VHX

And then there are subscriptions. Offering the solid familiarity that the other alternatives lack, paid subscriptions have been around just as long as ad-supported models. In the wake of increased ad-blocker adoption, Youtube announced their ad-free subscription model ‘YouTube RED’ which has been largely successful. Medium have also now opted for paid subscriptions after publicly dismissing their advertising initiatives as propping up a dying industry. Newspaper publications who clung stubbornly to paywalls probably feel vindicated by now.

While paying for creative works might seem unfamiliar for the average user, the above examples — add Netflix and Amazon Prime into the mix — have proven that given a glut of great content and a low initial subscription price, paid subscription plans can work.

The problem though, is that this kind of scale and distribution is something independent creators seldom have access to. So while it may be true that great, original and well curated content will always find an audience that will be willing to pay, making it a seamless experience for an audience to do so involves being dependent on a platform who can provide that infrastructure.

We’ve gained independence, it’s time we shoot for economic parity

One of the driving factors behind why I chose to help build Maven using Storygami’s interactive video technology was to prove possible the idea that independent creative people could build their own platforms. I think, given the macro trend of individual empowerment, the next generation of content platforms will inevitably be made by and for the creative class.

If we take this thesis and apply it to Maven: we’re developing a creator-first media format, helping it thrive within an environment that fosters interdependence between audience and creator, integrating incentives that focus on lasting resonance as the primary metric to drive reputation and are laying the groundwork for a decentralized channel for creators to earn revenue. By doing so we may be able to take a step further in truly representing a better model for building media platforms on the internet.

Examples like Maven may also offer a corrective. The internet should have provided the creative class the freedom to create and earn a living unencumbered. The age of advertising as the dominant form of content monetization, I believe, was only the last necessary step toward that becoming reality.

As Jack Conte noted: “the first stage of the internet gave us a way to share information, the second web gave us a way to connect, the third web will give us a way to make money.”