Nevertheless, Charles sees this as a key step
in rethinking how social influencers get paid.
For several years, content creators have
used social media channels to build large followings and monetize their
content. They typically work with multi-channel networks (MCNs) that aggregate
their content and support them in their dealings with social media companies.
“The problem we really want to solve is the
content monetization problem,” said Charles. “Ads and subscriptions just don’t
work for all content types and all kinds of people.”
Social influencers face several threats to
their advertising revenues. The first is ad blocking. Anti-ad-blocking firm
that 615 million devices were blocking ads as of December 2016, representing a
year-on-year increase of 142 million. Google has now committed to blocking ads on
its web browser Chrome, possibly as a way to control
the blocking once and for all.
Secondly, the nature of online advertising
is changing. YouTube advertisers are rethinking their relationships with the
company as it struggles with ads running alongside inappropriate content.
Creators are seeing their pre-boycott earnings plummet.
MCNs are also changing tack. YouTube is
moving into bundled TV channels and has pushed
many creators into original content deals as part of its Red service. Industry
watchers identify successive waves of demonetization and are calling it the Adpocalpyse.
The problem with relying on a single large
platform for your monetization is that a single decision from its owner can put
you at risk. Decentralization in one form or another seems to be an option.
to create a decentralized form of Reddit while working as a cryptocurrency
engineer there. The idea was to create a Reddit app that everyone would run, connected
to each other via a peer-to-peer network. To see Reddit content, a user would
pay a small amount of bitcoin to peers on the network. Upvotes would also award
bitcoin to the author.
Management changes at Reddit shelved not
only that idea, but also an alternative approach which would have maintained a
centralized Reddit that directly rewarded posters with a cryptocurrency.
These days, Charles is less interested in
decentralizing the content and the users. He backed away from a decentralized
app with Yours, arguing that it would take too long. The content and identity
information is held on a traditional server, but the payments to content
authors are eventually settled on a cryptocurrency blockchain.
“We really needed a micropayment solution
that works for people,” he said. “We needed decentralized payments, but we
didn’t need everything else to be decentralized.”
In focusing on the blockchain for payments
alone, Yours is aiming to solve a specific problem facing social media content
producers: charging for their content in small increments. The blockchain is
the perfect solution for micropayments, said Charles, who calls Yours “Medium
with a paywall.”
He decided to abandon Bitcoin as a payment
mechanism, citing high transaction fees stemming from its historically low
block size. Instead, participants will pay each other in Litecoin.
Network of Decentralized Solutions
Charles isn’t the only person hoping to
revamp compensation for social media mavens using the blockchain, although
others have more ambitious goals, using their own cryptocurrency tokens.
launched last year, is a blockchain-based social media platform that rewards
people for posting and sharing content. Authors earn Steem dollars (pegged to
the U.S. dollar) every time they post content that others value, along with
Steem Power, which gives them more influence in voting up content. Readers get
similar rewards when they vote on content that turns out to be popular.
Another blockchain-based social network, Akasha, runs on Ethereum and the Interplanetary
File System (IPFS). Created by Mihai Alisie (who also founded BTCMedia-owned Bitcoin Magazine), it uses its own token
which authors can use to generate value for their content.
A rival platform, Synereo, will use a proof-of-stake
blockchain to operate its decentralized social media network. The initiative raised
$2 million in a crowdsale last September, using its AMP tokens, after launching
its alpha version in August. One interesting aspect of this system is its
intention to move from a centralized, server-based model to a decentralized
model over time.
How will these blockchain-based social
networks play out? One of their biggest challenges will be inertia in the
existing user base. Facebook will hit two billion users this year. YouTube is
similarly successful. Conversely, these new social media networks rejoice when
they hit four-figure user bases.
Still, it’s early days, and most of them
are barely out of alpha. There are also promising signs from other, more
established networks who are using the blockchain to reward their users. Latin
American social network Taringa! distributes ad revenue to content producers in
bitcoin under its Creadores
Taringa! mixes old and new concepts,
marrying blockchain-based payments and ad revenue, but the new generation of
social networks wants to take innovation further, searching for entirely new
forms of compensation.
The current crop of social media superstars
will probably follow their audiences, which leaves the likes of Steemit,
Synereo and Akasha with two options. They can try and lure these YouTube
natives over to new platforms, or breed a different ecosystem altogether, with
new influencers and new readers. Or perhaps, if things pan out, they can create
a blended, vibrant mixture of the two.