How Challenger Media Brands Can Leverage Web3 Strategies to Disrupt the Status Quo
4 ways media companies can rethink the relationships with their consumers and contributors to maximize value
We’ve spent some time looking at the transformation of the web from 1.0 to web3, how NFT’s are becoming a tool to reinvent creation and ownership through smart contracts, and a peek into some of the companies and industries who are at the forefront of redefining how these new technologies and strategies will be applied to business and commerce.
One of the industries that hasn’t moved as quickly into Web3 is media.
There is good reason for traditional and entrenched media companies to tread carefully. Today their model is to leverage their capital and distribution channels to arbitrage content, which is primarily monetized through subscription and/or ad revenue.
For example, the largest social platforms in the World only share monetization with creators through their formal programs, and some, like TikTok and Twitter, only allow creators who have more than 10,000 followers participate in their creator program. Not only do the platforms benefit from the stair step creators take to get to this arbitrary popularity milestone, the payouts are based on a vaguely defined set of performance KPI’s (an internal document from TikTok was leaked last week that helps paint the picture of how views are valued by their algorithm), but creators’ payouts are what they are and usually represent less than half of the revenue earned by the platforms.
So it goes without saying that the leaders of the media world would be wary of the concept of Web3 that would impart some degree of ownership, participation, governance or profit sharing of the entity.
But if you are a challenger media brand, why would you not pursue a disruptive innovation path to build the next big media business?
Here is how we have considered this is in our building of Data+Sports:
Community Growth: Customer acquisition costs are a killer for a new or challenger media brand. Is there an incentive model that could allow the community to capture the customer acquisition costs that would be spent with 3rd party ad networks? If I was to pay $3 cost per app install with 40% of those users abandoning my app after the first session, could I afford to pay a user $5 to bring their friends onto the platform which should improve the economics over the current customer acquisition model and use their influence and corresponding network effect to grow the community?
Retention and Engagement: Today, most viewers or consumers of content have no vested interest to spend more time with a specific media property or to subject themselves to more intrusive advertising. Is there a way where media brands can share a portion of their ARPU with users in exchange for them spend more monetizable moments with creators and engaging within your platform? This could be ad revenue, affiliate revenue, marketplace or subscription revenue.
Native Value Creation, Value Exchange and Value Realization: If the size, time spent and engagement by the community is directly correlated to the revenue value that can be created, there should be a clearly defined value exchange for those who help maximize the earning power of the community. In Web3, the native integration of a wallet and the available tokenization that comes with that, should allows everyone to understand and realize their share of value immediately.
Ownership & Portability: One of the primary issues that creators have today is that if they want to build up an audience in one media or social platform, those followers and users are not portable. This means that if you get to 10,000 followers on Twitter, and you want to build an audience on TikTok you’ll be starting from scratch. Using the smart contracts within NFT’s, creators and users can embed metadata on users, groups, topics, subscription status or any other relevant data signals that can be integrated into other open media or community platforms. When you combine the portability and interoperability of a wallet and identifier, it allows you to preserve and expand your presence across Web3 applications and communities.
These are a just a few of the areas we are working on at Data+Sports, but the ideas, concepts and technical development in Web3 are early and case studies limited.
But if the current philosophy of expanding the pie for creators and contributors holds true, then the opportunity for media to leverage these new capabilities to build the next big media company is now.