The Decentralization of Media: Web3 Transformation
The Tokenization of Content and Media for Creators and the Community
I have been a part of the media and technology ecosystem for nearly 25 years working at traditional media companies ABC and CBS, before moving to digital media and the advertising technology that drives monetization.
I believe that the media industry is on the precipice of disruption during this next paradigm shift, permanently reshaping the structure, engagement, monetization and content creation models that exist today.
As we have been building Data+Sports, a decentralized social platform designed to unite sports fans, sports wagerers, creators, sportsbooks and brands, I’ve spent a lot of time with creators, investors, and consumers explaining what Web3 is, both from a technology and philosophy, and why we believe communities, contributors and content will be forever transformed through tokenization.
The goal for this newsletter is to share insights, showcase thought leaders, new projects, applications and communities being built across the Web3 ecosystem.
Why is Web3 Important?
Over the last nearly three hundred years, media has been transformed through advances in distribution, technology and creativity.
What started in print, before audio, and before video was a clearly defined business model that has powered the media industry throughout the 20th century. The combination of subscription and ad supported revenue served as the de-facto model of monetization for nearly every media company on the planet.
Unbeknownst to the lawmakers who designed and passed the landmark omnibus legislation known as the Communications Decency Act (CDA) in 1996, they incorporated in it the commercial and strategic accelerant for Web2.0. Not only did persistent and high speed internet access pave the way for rich streaming content and communications, a provision within that act, 47 U.S.C. § 230, was a significant ingredient in the building of the largest media companies in history.
As a result, companies such as Facebook and YouTube (Google), were able to leverage the infinite scale of the Internet to build massive audiences and create communities with a near-zero cost basis for content, allowing them to invest heavily into infrastructure and scaling users.
Because of this, the economics and dynamics between creators and content owners, historically pinned on distribution and access, were forever changed.
As we look towards Web3, a tokenized web, we are at another inflection point where creators, users and communities are empowered to co-op this symbiotic relationship to create win-win scenarios across all stakeholders.
Game Theory & Incentives
Game Theory has been well documented as a valuable tool to helps assess how certain [economic] incentivizes will drive behavior. At the core of Game Theory is that people act rationally and decision based the most favorable outcome for themselves. In a zero sum game, each participant will attempt to calculate his opponents actions and counter those through the action (or inaction).
In the case of Web3, the construction of incentives doesn’t need to be zero sum. If constructed properly, the growth of the community is a co-operative, where, in theory, every action by every stakeholder creates value for the other stakeholders in the community.
For example, historically, a creator sells or distributes their content to/through an intermediary (ie-Netflix or Instagram), and retains a portion of the estimated or actual earnings of that content. In a Web3 world, the creator has the ability to share the gross earnings with the community, in exchange for viewers, tips, or promotion.
In this example, the creator is able to more directly control their content, and rewards the consumption of that content to the community who helps distribute and promote it.
The flywheel aspects of this can be quite powerful when all stakeholders are incentivized economically or socially to maximize the value of the content within community.
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