The digital economy is fostered with data being extracted and analyzed in the real time. The content generated by users worldwide is setting the agenda. Until now, the market didn’t determine an equilibrium price for the digital fuel produced by creators. Times have changed.

We would like to thank the team at ContentBox for their contributions to the design and implementation of the research and to the analysis of the result.

Information Miners in a Digital Shaft

Media usage in every minute has reached a tremendous amount of data with over 4 million watched videos and a little less than 1 million streamed podcasts. In the past month over 13 billion active users generated unique content in all social platforms available worldwide. The numbers keep growing with 300 new users registered every minute on Facebook. The Guardian covered the media industry in a state of despair as the advertising model has been making the digital content produced less and less meaningful.

Such an intensified digital stream only has the potential to reach new volumes. In the last years blockchain technologies have been developed to protect readers from annoying banners and sponsored links that were put along in the list of the “Fake news” sources. Blockchain is now able to distribute profits in respect to intellectual property rights that only content creators truly have.

While information has become an asset generating revenue and is reshaping traditional markets, the key problem is how the intellectual property is priced to make the digital ecosystem grow. Every economic theory states that the labor has to be remunerated, although readers haven’t gotten used to paying for content. Have they?

A Can of Worms for Creators

Content creators have shifted to social platforms for producing and sharing their ideas, as social platforms have promised artists the ability to make a living on their talents. However, social platforms didn’t mention that with advertising as the main revenue source they are literally shaving money off the top.

“Broadcast yourself” … to make us money

In June 2018 Alphabet, Inc (YouTube’s parent company from 2016) reported over $28 bln on advertising revenues in its second-quarter with 1.9 billion active users as of July 2018, making a potential full year revenue to exceed $100 bln. In 2017, its annual advertising revenue reached over $95 bln that accounted for 86% of all generated revenue ($110 bln).

As the company accumulates revenue each time a user clicks on the ad or views the ad for a specific period of time, users are guided with tips on the Creator Academy on how to monetize their content. Depending on the content quality, audience, geo location, and other factors a price per 1,000 views varies from $0.10 in developing countries to $1 in developed countries.

Thus, in India a blogger would get $1 for 10,000 watchers, whereas a US based blogger would earn $10 for reaching a ten-thousand audience. In addition to price disturbances, Youtube acts as a middleman cutting 45% of the revenue and imposes a 30% tax rate.

Influence Marketing Hub published an interactive calculator that shows potential Estimated Total Earnings by Video via an inserted link. On average 556,931 views will be converted into $1,030 before Youtube’s cut and tax rate, leaving the creator with $396. The pricing model seems weird at the first look, and it also brings negative incentives to content creators.

“Music for everyone” … or just for the middleman

Spotify was developed to be a sound social media platform that encourages talented music creators to stand out. Spotify reported $1.4 bln revenue for the second fiscal quarter of 2018. With that motto the sound social platform has recently reached over 260 mln active users per month.

A user either enjoys a free account with advertising messages or pays for a subscription, a $9.99 monthly charge, that is being distributed between sound producers with certain weights. Spotify stated payout range to vary from $0.006 to $0.0084 per stream that was used to calculate how much the top 50 songs streamed globally earned artists in 2014. It does not compare to how much artists make at their performances. Spotify’s CEO and founder Daniel Ek said that it’s better for artists than having the content stolen by pirates. ‘Music for everyone’ is surprisingly created by an artist who transfers royalties to middlemen. Thus, instead of releasing new podcasts, artists are looking for new ways to to keep the music flowing.

“Everyone’s stories and ideas” … are in a white noise

Having a free mode for readers, Medium presented its membership program for writers to monetize their content. Having made ‘Clapping’ an appraisal sign, developers tried to reinvent the classic advertising model. If the article is really good, one reader can Clap up to 50 times that is scored to remunerate authors. One clap can bring the author from $.01 to $2 depending on where the article was viewed from, although the algorithm is not perfect. The average amount earned is around $77 per one article. 14% of all authors are known to excel and receive the bonus that is set at $100.

In June 2018, 176 million readers viewed Medium with an average of 75,000 pieces generated weekly. Medium introduced rules for the community to keep standards for content production, such as a prohibition of third-party advertising, sponsorships and images.

Meanwhile, pricing models set by social platforms have started defining a quality of a content. A digital masterpiece is covered with a new user generated content during the next day. The most popular social platform, Facebook, with over 2 billion active users utilises human weaknesses such as pure curiosity, the watching and the lurking, as well as naming and shaming to gain views and comments. Thus, a former founding president of the social media giant, Sean Parker, after his resignation in 2017 confirmed that the social network was exploiting a vulnerability in human psychology. Thus, in order to encourage users to create more content, features such as the “like” button were developed to deliver “a little dopamine hit.”

The Voice Is Heard

While content creators have been moaning for an economically independent environment to produce content, decentralization as the most effective pillar was presented to the digital world. Blockchain takes middlemen out of the business.

We’ve created an infographic to better explain this idea to you:

The blockchain-based infrastructure platform ContentBox was designed to reshape digital ecosystem. Thus, a token-backed solution is on its way to redistribute revenue accordingly. The platform lets creative community members share digital content and user bases in far more efficient ways.

After weeks or even months spent in a recording studio content creators release and upload a future ‘best podcast,’ they are being rewarded every time fans interact with the record in the ContentBox ecosystem. As a result, creators are motivated to produce diverse and meaningful podcasts for expanding their community. Listeners receive tokens for engaging with the platform via liking, sharing and commenting. These tokens can be exchanged for a new podcast release!

With blockchain technology ContentBox gives a transparent mechanism to price intellectual property that is able to generate more revenue than any tangible asset.

Algorithms track information inflows and outflows and insert data into the ledger. Here it is, the blockchain in action:

ContentBox uses smart contracts to check a multi-signature, Algorithms establish the identity of a user by extending the wallet concept to store personal information such as reputation alongside token account, Passport will bind a creator to his artworks that will build her reputation in the digital content world.

Sometimes creators are coming up with such a unique idea that requires extra equipment to be performed. One of the features of the ContentBox blockchain-backed ecosystem is the Crowdfunding Launchpad that is able to make creative industries fully autonomous and not be influenced by sponsors. An artist is able to raise a crowdfunding campaign to raise funds for the next podcast release. The feature will encourage content creation to be maintained at a high quality. As artists will be credited with funds and trust in advance, they will do their best to release truly unique pieces. Bloggers, movie makers, sound producers as well as the rest of the worldwide creative community is about to be able to join a creator-centric decentralized marketplace that is growing into a huge network of talented and independent artists.

Breaking: Decentralization Brings Independence and Equality Back

Media think-tankers have started changing their business models to become truly independent from advertisers. In its annual report, Reuters Institute for the Study of Journalism gave a word to publishers who have been moaning about loss in profits because they were squeezed by the increasing share of digital advertising revenues being transferred to social platforms. As social media platform algorithms are designed to satisfy rather than to inform, the report predicts that more news organisations will pull out of deals with Facebook and other platforms because a sufficient financial return they expect is not delivered.

According to a recent Deloitte’s research piece, consumers are getting used to “per-use” payment models, instead of paying a monthly fee for an online subscription to one particular newspaper or TV package subscription. Thus, micro-payments boost paid content, making the monetization model much more fluid and prevalent.

Blockchain ensures that authors receive a fair share of proceeds calculated and collected cost-efficiently. Thanks to this artists are to market their creative projects while leaving big platform providers behind, since a blockchain enables easy tracking of usage and automatically sends associated payments.

All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice.