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The Web3 ethos is all about the type of decentralization that is capable of preventing any one single point of failure; whether that applies to technological primitives or economics matters not. As far the digital marketing industry is concerned and as it relates to the ecosystem—it has proven itself to be a self defeating, self-cannibalizing advertising model. Super publisher giants have accrued and transferred so many of the formal benefits away from their user base, that their monetization models of serving ads are beginning to unroot themselves. Web2 By transferring as many of the formal benefits away from their end-users as possible, the very ads that these super publishers serve are no longer effective due to the fact that the user doesn’t have the disposable income that they once had. I am the Co-Founder and CEO of Wyrlds (one of the companies mentioned below). Dislaimer: The Different Types of Web3 Earning Models That Exist Today What Web3 advertising models are capable of doing is to not only decentralize but to democratize the antiquated Web2 economic models that have proven themselves to be less-than-adequate; in this case the advertising industry. Below are a list of Web3 projects that allow their network participants to earn coin; sorted in alphabetical order by the type of earning model. With the exception of one, what all of these projects have in common is that they require the attention resource, are subsidized by advertisement revenue-share models, and are unobtrusive in that the user does the same daily activities that they have come to know and love. Brave Browser Live Status: Browse-to-Earn Earning Model: Basic Attention Token (BAT) Coin: Whitepaper: t.ly/l-ih Website: https://brave.com/ Launched in 2020, the Brave Browser was co-founded by Brandon Eich who also happens to be the creator of Javascript and Firefox. Brave is heavily focused on user privacy and helps facilitate the trade of their user’s attention resource with an ad revenue-share model. Users are allowed to browse the web as they normally do, and overtime they accumulate the BAT token which can be traded on the Gemini exchange. Wyrlds In development Status: Digest-to-Earn Earning Model: Solana (SOL) Coin: Whitepaper: t.ly/iKrua Website: https://wyrlds.co/earn-sol/ Wyrlds is a discoverability hub and publication for Web3 games. Wyrlds is still in development however you can subscribe to their Digest Newsletter to be grandfathered into a 2x earnings multiplier once they go live. The team at is focused on bridging the gap between mainstream Web2 and Web3 gaming by deploying a Web2.5 platform. By using an ad revenue-share model, users will be able to earn SOL just by discovering new games and by viewing and sharing the latest gaming content with their family and friends. Wyrlds Ethermail Live Status: Email-to-Earn Earning Model: $EMT Coin: Not available Whitepaper: Website: https://ethermail.io/ The team at Etheremail is redefining email for the Web3 ecosystem. Just think about how many 3rd party brands and companies want to be at the top of your inbox every second of the day. With Ethermail, these brands can now pay you $EMT coin for your attention in order to get to that very same spot. Itheum Live Status: Generate Data-to-Earn Earning Model: Itheum Coin: Whitepaper: t.ly/Caq5 Website: https://www.itheum.io/ Itheum is all about the decentralization and democratization of data. According to the Itheum roadmap, their platform will allow for 3rd party companies to trade consumers for their continuous longitudinal data feeds. In fact, Itheum goes as far as empowering individuals to give out consented access control to their data by using on-chain technology; effectively unlocking legacy data silos. Because data privacy has been such a conflicting problem in Web2, the most prominent browsers are now eliminating 3rd-party cookies entirely, forcing the largest advertisers to create what are known as . On the one hand this may seem like a problem for brands, but with companies like Itheum, it’s a step in the right direction for both the consumer who can now monetize their data streams, as well as the brands who want to enrich their 3rd party consumer identity data. walled gardens Audius Live Status: Listen-to-Earn Earning Model: Audius (AUDIO) Coin: Whitepaper: t.ly/i-Lk Website: https://audius.co/ Audius is a Web3 streaming platform that allows users to upload, share, and listen to the latest songs while earning coin. The team at Audius has made a platform for the music community that allows artists to upload free or paid songs, and listeners can listen to songs while earning the Audius coin. EV.IO Live Status: Play-to-Earn Earning Model: Solana (SOL) Coin: Not available Whitepaper: Website: https://ev.io/ EV.IO is a fast-paced, in-browser First-Person shooter game that allows players to earn the native E token that can be swapped for SOL. EV.IO partners with brands who are interested in blended in-game advertising, and a portion of that budget goes to the players who earn the E token for every successful kill. Solcial Live Status: Socialize-to-Earn Earning Model: Solcial (SLCL) Coin: Whitepaper: t.ly/AbA Website: https://solcial.io/ The team behind Solcial created a social media platform that is the pinnacle of form and function. The platform’s industry leading UX/UI is backed by a tokenomics structure that is as brilliant as it is equitable. Both content creators and users are able to monetize their contribution to the platform. All users are able to mint their very own token and then use this token to speculate on the sociability performance of their peers. In addition, content creators are able to publish premium content that requires the native SLCL token to unlock and view. REWARDED.TV Live Status: Watch-to-Earn Earning Model: Replay (RPLAY) Coin: Whitepaper: t.ly/aoGcA Website: https://rewarded.tv/ REWARDED.TV is a next-generation Web3 movie streaming service that uses gamification to reward and incentives their audience. Viewers are able to earn RPLY, badges, and digital collectibles (NFTs) by simply watching their favorite movies and shows. In order to view premium content, viewers can redeem their RPLY earnings to unlock even more rewards. Additionally, REWARDED.TV is implementing social features that include live watch parties and a SuperChat; making watching TV remotely with family and friends a pass time to enjoy. Earning in the Web3 Ecosystem Recap The Web3 ecosystem is blossoming and is placing the end-user at the forefront of the monetization experience. Instead of a greed first approach, Web3 companies and their developers are heavily focused on decentralizing not only the infrastructure that underpins their products, but also the economic models that rest on top. What’s most important to note is that this list of Web3 products are passive in their very nature—meaning they don’t require the user to change their daily habits of making the most out of what the web in general has to offer. As Web3 continues to evolve and gain more traction in the mainstream, there’s really no telling of the windfall of benefits that will entice not only industry leading developers to jump onboard, but any network participants for that matter.

Web3 Ecosystem Earning Models: From Browse-to-Earn to Play-to-Earn

Donations are aimed to support content creators on different platforms. But how much money actually goes to the streamer? What amount of commissions and fees are taken by the intermediaries? Let’s do a breakdown of the donation system and see how it works. How much streamers earn on donations Most full-time streamers get an average of $3000-$6500 per month; the amount varies depending on their popularity and sponsorships. Gamers received up to $1,000,000 donations on Twitch, and some content creators about $3.3 million through Twitch subscriptions, bits, and ads from late 2019 to October 2021. earned The amount of income they generate will vary from streamer to streamer. Most of them receive bits and subscriptions from 5-15% of their total viewers. “Professional” streaming requires time and dedication, and just the top 0.01% of content creators the big Twitch payouts. Small bloggers with 5-10 average viewers get $50-$200 per month, this amount is on subscribers, bits, and advertisements, without the income from other sources like YouTube and sponsorships. Most users purchase subscriptions to avoid ads and get exclusive content from streamers. At the same time, donations allow bloggers to generate content on a professional level and to create a stronger community. get based Donation breakdown: fees, commission, and taxes Twitch does not take commissions from donations, except from their tipping system called “Twitch Bits” where they take around 30% from the purchased bits. However, payment systems, such as PayPal, include additional fees. PayPal is now charging 2.89% of the total amount, plus a $0.49 fixed fee. The new fees can cost streamers, especially the ones who rely on smaller donations, a . This way from every $1 donation from a viewer the streamer would only get $0.48. If a streamer gets a $100 donation, after it goes through PayPal, he will end up with $96.62. The number is not looking bad however, not many content creators receive this amount and rely on smaller donations. lot of money Affiliate and Partnered creators can monetize their accounts with subscriptions. The price range is from $4.99 to $24.99. The creator gets 50% from each subscription, however, some high-end Twitch Partners can keep up to 70%. Users who have the subscription can watch ad-free videos, use channel emotes, and get access to subscriber-only content. Top streamers have custom deals and the split for Twitch Partners depends on the of the subscription: tier Tier 1: 50/50 Tier 2: 60/40 Tier 3: 70/30 Bits can be classified as “tipping” or mini-donation. Every 100 bits equals $1. A streamer gets $0.01 per bit or an equivalent in foreign currency based on the current transactional value. It is worth noting that if the transaction requires a currency conversion, Paypal is a retail exchange rate and a conversion service charge of 4.5%. Donations made through third-party platforms on Twitch go to the streamer, for this reason, solutions like Destream are convenient due to the absence of hidden fees. using On Youtube creators need to meet several requirements to allow their viewers to purchase subscriptions: they need to have a minimum of 1,000 subscribers and at least 4,000 hours of total watch time within the last year. Traditional YouTubers typically between $0.10-$0.30 per ad view and sponsorships, at the same time streamers, can get payment via channel memberships, super chat, sponsorships, and selling merchandise. make For instance, super chat allows subscribers to have their chat displayed at the top of the feed for a fee that can vary between $1-$500. The platform takes 30% of the payment and the remaining 70% goes to the streamer. If streamers want to collect donations on their channels they need to set up an account through a third-party platform, since Youtube does not have an in-built donation system. Content creators from any country need to pay income tax or business tax if they are registered as a company. The amount varies depending on the country. For instance, in the UK they are required to complete a self-assessment tax return and declare their income. If they earn more than £1,000 per tax year, content creators have to do a tax return. In the US streamers need to fill in a tax return if they more than $600. make Full-time bloggers need to pay a self-employment tax, which is a set 15.3%, and income tax. Creators usually act as sole traders or self-employed. Alternatively, they establish a limited company. It is a separate entity from its owner and the company is responsible for the business’s liabilities and debts. How donations improve the overall quality of the content Donations allow content creators to improve the quality of their content and share with the audience more professional videos. The future of blogging and streaming is being shaped around the community, therefore it’s so important to find new ways to engage with the audience and build a strong network. At the same time if platform users like the online content, they are willing to make donations and encourage more people to become full-time creators. To get the most out of the donations, bloggers and streamers should carefully read the policies. It is worth bearing in mind that content creators can save up to 20% of their income if they calculate all the commissions charged by payment platforms and banks.

How Much Do Twitch Streamers and YouTubers ACTUALLY Make from Donations?

If you are a video creator looking for ways to make your videos work hard, you are not wrong in worrying about YouTube monetization issues. Read on to know the how-tos and what-nots of monetizing your videos. Monetizing YouTube Videos The most evident way to make money from your videos is by placing ads before or after videos. Longer videos may also have ads in-stream. Another way is to enter into affiliate programs where links to the website of the affiliate are placed in the description of your video. Every click into the website is tallied and converts into money for the creator. Sponsored videos for a product or service gets you paid by a sponsor for mentioning them in your video. Getting into a YouTube Partner Program allows you to monetize your content by placing ads for other users. But it requires a minimum of 4,000 watch hours and 1,000 channel subscribers in the past 12 months to be part of the program. Crowdfunding or fan-funding can convert a YouTube channel into an exclusive club with a paid membership. High-quality and reliable channels engage the viewers and fund future videos. How Long Does YouTube Monetization Review Take in 2021? Now that we know the ways to get your videos make money, let us see what comes in your way to be a YouTube Mogul. 1. YouTube Partnership Program A YouTube partner gets to place ads, have membership-only content and even have a Super Chat account to crowdfund upcoming videos. But to be certified as a Partner, there is minimum requirement of watch hours and subscribers within a 12-month timeframe. With 400 hours of video being uploaded every minute, reaching out to your first 1,000 subscribers and attracting at least 4,000 watch hours within 12 months is a big hurdle for the new creator. When your videos do get to the mark, 45% of the revenue generated from the ads goes to YouTube. 2. Sponsors Sponsorship for a product or service can be bagged through a review or an experiential video. The terms for sponsorship depend purely on the creator’s negotiation skills and quality content. Sponsors can be contacted directly or you could wait for them to reach out to you. However, they cannot be the only reliable source of revenue as they can pull out of the sponsorship program if the stats are not good enough for them. 3. Affiliate Programs If your videos relate to one or two niche areas, you could place a link to an affiliate in the description box. But before that, remember that the affiliates will need you to have quality content with a loyal subscriber base and high traffic. It is important that you can provide a value addition to your affiliate by the video you are creating. Product reviews and experiential videos are popular examples. 4. Frequent and High-quality Content A minimum of 3-5 videos on a weekly basis will be good to begin with. Even though the length of the video is not the elephant in the room, YouTube considers a minimum of 30 seconds of watch time to count it as a ‘view’. 5. Competition Nearly 400 hours of video are uploaded every minute and over one billion hours are watched every day. Investing in a good microphone and using an appeasing backdrop is important. Factors affecting competition can range from the niche and quality to demographics. With YouTube coming under heavy reviews for monetization policies, competition is slowly shifting to video on demand services. 6. Too Many or Too Less Placing ads on your videos must be considered carefully. Pre-roll ads may or may not be skipped by viewers. If skipped, they do not convert into a view and hence earn the video creator no money. On the flip side, intrusive ads put off the viewer who may choose not to watch the video until the end. A shorter duration of the view means less ads and less revenue. Video creators feel forgotten as YouTube actively changing their policy to determine the validity of the channel and favoring advertisers. If you’re a serious content creator, it is quite unwise to depend on YouTube for major income.  Instead of putting so much effort on YouTube, utilize it to promote your video content and think about the . Starting your own is the safest bet where no one can restrict you and that gives you absolute control over every aspect of your business. alternative to YouTube monetization video monetization platform

6 Common Monetization Problems for Creators on YouTube

Did you know that the Zimbabwe Dollar ended up with so many zeros that the ink was more valuable than the bills it was printed on?! How could that happen? Let’s quickly go back 7000 years. In 5000 BC the first metal objects were introduced as commodity money replacing bartering for goods. With the introduction of paper currency and non precious coinage commodity money evolved into representative money, meaning the money itself didn’t need to be of great value but represented a claim on a commodity i.e. silver or gold that was supported by a government or bank. Representative money was then removed further from reality with Fiat money, whereby the value is decoupled from its claim on a commodity and the government solely defines its value, cemented by Nixon’s decoupling of the dollar from gold in the 70s. All currencies (except crypto) now rely on the government’s good will, because they can influence the value and potentially collapse an entire economy by simply… printing more money. In the world of online publishing, impressions and clicks have been the agreed system of exchange and value for advertising. In this article I wish to discuss how this system has created a deadly race to the bottom and what a future model could look like. Desire out, engagement in After world war 2, the consumer economy was born, the challenge was not in efficiently making stuff, we had mastered that, but in creating the for it. For 60+ years media companies and the TV were fantastic at fuelling desire in this consumer economy right up until November 2008 when the markets crashed and a new economy rose up — the creator economy. To quote futurist Paul Saffo in his talk : desire The Creator Economy “we no longer passively watch and buy, but we participate and create.” Personal media companies AKA social media disrupted the old by enabling creation. As the internet exploded with an abundance of content it also created poverty of attention, and where there’s scarcity there is value; value is therefore attributed to engagement. The companies coming out on top are those that assist not with our desire for stuff (which is now relatively cheap) but that facilitate experiences and interactions — we no longer simply buy a cup of coffee, we buy the story behind the bean. into Race to the bottom But media companies have been deadly so slow to adapt to this new economy and play to their unique strengths of storytelling. They’ve plowed on continuing to compete for direct marketing dollars by displaying advertisers’ “products” and getting caught in a tangled web of something called Ad-tech. Ad-tech claimed to help publishers scale the sale of their online ads. It drastically increased the amount of ad space for sale by connecting online marketplaces and switching out the ads on display in real-time based on the viewer. The trouble was that iconic publishers soon found themselves competing with every other crappy site running ads frequented by the same viewer and the consequences for the news industry in particular have been dire. Ad prices have been demolished to a cent on the dollar, and journalism skewed towards getting as much traffic as possible with so called “click bait”, making once iconic media also pretty crappy. Arbitrage ad units AKA chumbox ads from Taboola and Outbrain are anything but authentic they’re parasitic. Rigged game Google and Facebook now account for with Amazon now racing up already to 8.8%. It’s no surprise that these firms also mark their own homework — providing ad performance software which have been proven to to standards the competition can only dream to match. Oh and with Google search ads, a found that only 16 % of searches resulted in a click on an ad for an unfamiliar brand. ~60% of all online ad revenue inflate numbers recent study If that’s not bad enough, discovered that as much as 28% of all internet traffic is “non-human” so those impressions of your ad (~30% of which are already not “viewed” at all) are even more inflated. Adobe On the other side of the equation, consumers have had enough of online ads. In what is possibly the largest demonstration in all of history now use an ad-blocker, that’s 11% of the global internet population rejecting ads on the web. When broken down by mobile users it’s somewhere between 37% and 47%, which is estimated to equate to around 2 billion people. The people have spoken and they want content! 615 million devices A decentralised media company If branding not direct marketing is king, clicks and impressions should be removed from the equation. The media can breathe and go back to what they do best — curating culture. Google owned YouTube has more than three million ad-supported channels, according to the analytics company OpenSlate, which says the average $100,000 campaign on the platform runs on more than 7,000 channels. What if publishers used their curatorial prowess to activate a network of creators beyond their own channel? Complex Media & First We Feast produce a unique celebrity interview series for YouTube called “Hot Ones”. Sponsored fittingly by Tums antacid tablets the show has surpassed 11 seasons and does $7M annually. “Rather than ten TV shows consumed by billions of people, we now have hundreds of millions of shows that cater to billions of people” — Venture Beat (“The future of the creator economy”) TikTok, TikTok An example of this direction is the subtle yet significant difference in how content is rated on Tiktok. Unlike other social platforms that celebrate likes and comments, TikTok preferences , meaning essentially that any creator on the platform has a chance to have their content go “viral”. Brands can launch hashtag campaigns where the community participates in creating content related to the theme such as #GuacDance that was initiated by Chipotle to mark national guacamole day. talent over status P&G owned Gillette has created a sponsored team of creators on Amazon owned streaming platform Twitch. In this alternate future, media houses become talent managers and advertisers pay for access to their network of creators, production of high quality content and consumption by demonstrable real loyal audiences. Authenticity pays Transparency afforded by the internet and social media has shifted the relationship dynamic between brands and consumers. Therefore advertising should be thought of not as a transaction but an ongoing partnership and to succeed it must be genuine. It’s what many publishers have gotten so wrong, by imagining an invisible line between advertising and their editorial output. The amount of money generated by Instagram influencers alone to reach $2.3 billion in 2020. is expected Let’s take a look at how content creators select brand partners. Twitch streamer Pokimane recently because “ the sponsor wasn’t a good fit for her or her brand”. Video-maker Casey Neistat said he asks himself “is this a company that sells a product that I would use, is this a company that stands for something that I believe in”. In this way I imagine advertising and future media will become one and the same, tighter collaborations between content creators and the brands to deliver long term engagement. turned down $3m “People are more apt to spend 30, 60, or 90 minutes on an influencer or branded livestream, whereas they’re typically only engaging with a static photo on a feed for a couple seconds,” — Ellie Jenkins, influencer-innovation manager at Mavrck. Engagement loop In fact, in the world of Live Streamers, many who can’t rely on brand sponsors are largely supported by fans gifting virtual currency (that can be converted to “real” fiat currency), buying fan merchandise or buying affiliated products. The act of virtual gifting creates a deeper sense of connection between fan and creator; often a creator will react to a fan which in turn can influence the programming — a powerful feedback loop. “Pay to engage” mechanisms such as YouTube’s Superchat currency where fans pay to leave extra visible comments during broadcasts are a far cry from the murky user comments section on many publisher’s websites. You might be asking where does the modern media house come into play here? Why would a content creator want to share the wealth when they can do it all themselves? An highlighted that the road to stardom for creators is still a treacherous wild west. Many brand prospects are negotiated over direct messages on different platforms without contracts. It’s “very fluid and very casual”. So how do you negotiate your back catalog? handle licensing agreements? platform exclusivity? intellectual property and even get paid upfront? Add to that the legal pitfalls around product claims, IP infringement and complying with FTC endorsement requirements. A smart modern media house could bring immense value to their creator community. NPR piece Finding and managing creators AKA influencers can be a role of the future media house. Source How I imagine the new pillars of success: – Media houses produce content through decentralised network of creators – Mass distribution to online tribes replaces hyper targeted individuals – Advertisers pay to be facilitators of entertainment and culture Win Win With the adoption of 5G networks and advances in affordable technology there’s no denying we are all going to be consuming more content online, from video, live-streaming and interactive media. No matter how niche a topic (think to the success of Mukbang and ASMR) there will be someone creating content and growing audiences for it. By decentralising their R&D and content production, a modern media house (perhaps even comprised of seasoned creators) could tap into an unprecedented level of authentic creativity to meet this demand and content creators could get the business support to protect them as they scale. Connect with me on or . Details of my projects can be found at ✌️ Twitter Linkedin DNLBTLR.com

The Decentralised Future of the Digital Publishing Industry

The first half of 2018 has been difficult for crypto investors. The fervor that dominated the market in late 2017 has waned, leaving questions about regulatory uncertainty, ICO governance, and market manipulation. Even investing in “large cap” tokens, which seemed like a sure bet to some, has been revealed to hold sizable risk — Bitcoin, Ethereum, and Ripple have all seen their prices slashed to less than a third of their highs. While this price volatility has resulted in some retail investors exiting the space, we haven’t lost enthusiasm about the fundamental value of blockchain. We believe that the true opportunity in crypto lies not in speculative trading and “get rich quick” schemes, but in the long-term development of coins that function as currency and enable improved communications, transactions, and other enterprise and consumer processes. (Mike Maples from Floodgate expanded more on this mindset in his great article Slow Money Crypto ). That being said, the first “killer app” of blockchain is undoubtedly cryptocurrency. Recent fluctuations have prevented most coins from being used as true currencies, but as prices stabilize, we believe that crypto has huge potential to beat out fiat currency in two of the three functions of money (and at least tie the third): — crypto arguably represents a big improvement as it can be transacted P2P or B2C instantly, permanently, anonymously, and without fees between anyone around the globe. Medium of exchange Bitcoin was originally intended to create a more stable currency that could not be manipulated by a central bank or government (by interest rate policies, inflation, etc.). As crypto continues to develop, we believe more of this initial use case will be realized. Store of value — **Unit of account —**like traditional money, each cryptocurrency can be expressed in units that allow for setting prices of goods and completing transactions. If a few coins were to become a global standard, this could represent another advantage in standardizing price units worldwide. We’re hopeful that as blockchain technology develops and some of the investment buzz dies down, we’ll see crypto gain widespread adoption as currency. In the meantime, we’re excited to see signs of life in other parts of consumer blockchain. Cryptokitties onto the scene in late November, 21 Inc. from hardware to a commercial social network (Earn.com, later acquired by Coinbase), Steemit grew to users and distributed upwards of $30M to community members, and Telegram announced a $2B (preceded by Kik and YouNow). exploded pivoted more than 350k ICO According to (data pulled on 7/20), gaming currently dominates dApp usage, representing the plurality (42%) of the top 50 dApps, followed by Exchanges (22%). These are currently the only two categories whose top 50 dApps see upwards of 100 DAUs and $100k weekly transaction volume, on average. (Check out for more stats!) Dapp Radar stats Chris McCann’s awesome post All data from Dapp Radar as of 7/20 at 5 p.m. We re-categorized all Dapp listings under the “High-Risk” category as “Gambling”, and also re-categorized several apps listed under “Other” that we believe do fit into another category. All data is for the top 50 dApps only. $USD volume is calculated based on Ethereum average price on 7/20 of $503. While no dApp has become a mainstream hit, it’s a very promising sign that even a small group of dedicated users is willing to jump through the technical hoops to engage on these platforms (especially given the counterparty risk of exchanges, custodians, and the dApps themselves, since the space is largely unregulated). We’re excited about opportunities to engage these early users, and are looking for dApps and platforms with the following characteristics: We’ve seen many projects where blockchain makes a platform unnecessarily complex and limits functionality. We think that Cryptokitties falls into this category in its current state. While the cat characteristics, generations of cats, and cat breeding are interesting, none of these require blockchain, and the need to pay for actions and wait for verification detracts from the user experience. Due to the complexity of building on blockchain, development has been slow — users can’t do anything other than trade or breed the cats, which may be why activity dropped dramatically after the initial hype. Unique and necessary implementation of the blockchain. Data from shows a severe decline in Cryptokitties market activity — with DAUs down to <500 in early July, from 15k+ at peak last November. Bloxy While a small number of consumers are intensely concerned about privacy and security, most place on convenience. Startups trying to build a decentralized version of something like Facebook or Twitter will find it difficult to break the existing network effects that hook users in these platforms. The average user likely won’t see value in switching from the established platform used by all of their friends to a competitor that’s harder to use and only populated by die-hard blockchain fans, even if the latter is slightly more secure or provides anonymity. Privacy and/or security aren’t the only value add. more value If you’ve ever tried to make a dApp transaction, you know how painful the process is. You need to set up an account to purchase coins, make the purchase, create a MetaMask account, send the coins to MetaMask, and, finally, verify the transaction. This is too much friction for the mainstream user. Coinbase did an exceptional job bringing crypto to the masses via credit/debit card purchases, and has continued to thrive despite competitors that undercut Coinbase’s 8% (!) transaction fee. We think it’s worth it for consumer blockchain startups to build a user experience that is as seamless as possible, even if the initial implementation isn’t entirely decentralized. Approachable consumer experience. Even heavy crypto users have trouble with the usability of most dApps, as evidenced by the tweet above referencing Augur’s recent launch. We believe that the first consumer blockchain applications to get mainstream traction will focus on meeting the needs of large groups of users who already “fans” of the non-crypto use case. For example, we’re excited about platforms like and that are tokenizing professional athletes and creating a marketplace for these digital collectibles — we know there’s a huge market of sports fans who already spend billions of dollars annually on merchandise and content related to their favorite athletes and teams. Eventually, we expect to see successful consumer blockchain apps targeting more niche communities (or even solving problems that people didn’t know they had!), but we think these will take longer to materialize. Existing user base. Unblockable Hashletes Some of the early success cases in consumer blockchain fall within these parameters. The (which recently announced more than 3M monthly active users) has many advantages beyond security and privacy: it’s extremely fast, blocks standard ads, gives users more control over ads they do see, and allows users to earn revenue from these replacement ads. The browser also takes advantage of an existing community that coalesced around private browsers and search engines like DuckDuckGo and Tor. Brave browser The Brave browser opens with a tab showing activity blocked (above is a screenshot from a ). Users tend to save 2–3 hours of time in only a few months of using Brave. Reddit user As this space continues to evolve, we’re also excited about platforms that allow consumers to access multiple blockchain apps in one place, particularly if they streamline the onboarding and verification process. is a great example of this, and is another. We’ve outlined some of the consumer-facing blockchain apps we’ve seen in the market map below, many of which operate on Blockstack or Ethereum (which Status uses). Blockstack Status *Note: We’ve purposefully left out trading exchanges and P2P payment startups. There are too many of these to list, and we see them as fulfilling the “money” use case, while this post is focused on other consumer blockchain implementations. From an investment perspective, we’re looking for consumer blockchain platforms that can attract a critical mass of users over the next three to five years. This will be more difficult in some categories than others given existing non-blockchain competitors and how much value blockchain can truly add. Here’s a few markets that we are particularly excited about: — as we discussed in our , many millennials and Gen Zers are eager to make extra income. Blockchain provides a secure and anonymous way to rent digital assets like computer storage ( , , ), internet access ( ), compute power ( , ), or even data ( ). These platforms are currently too complex for the mainstream user, but we envision a future where users can easily toggle on and off a system that allows them to make passive income by renting or selling these assets. Digital asset sharing/rental side hustle space thesis Storj Sia Filecoin Open Garden Golem Gridcoin DataWallet — enterprises are adopting blockchain for managing employee and customer identities ( , ), and this will bleed into the consumer market. We see significant potential for blockchain to: (1) track ownership and history of high-value assets (art, jewelry, real estate); (2) verify personal history (employment, education, residence); and (3) easily and securely access private data and make transactions, or credential others to act on your behalf. Verified identities also enable exciting opportunities in recruiting, knowledge-sharing, and identity-oriented tasks (e.g. Earn.com). Identity management ShoCard Cambridge Blockchain — given the complexity of building on a blockchain and accessing dapps, it’s tough to build games that compete with non-blockchain games in entertainment value (at least, in the near term). There is one notable exception — an organized and verified ledger of ownership and transactions can open up access to digital IP for real-world assets. We already mentioned and , which allow special access to digital and physical content and experiences through owning part of an athlete’s token. Cryptokitties’s s are another good example of this. Games with digital/physical crossover Hashletes Unblockable charity auction — we’re that streaming video will continue to be the primary source of entertainment for Gen Z and younger millennials. As traditional ads lose their appeal (a of this year’s VidCon), streamers are increasingly depending on viewers for financial support. We expect to see digital tipping/gifts become more mainstream, and have already seen success with YouTube , on Chinese livestreaming apps, and on Twitch. Token-based streaming platforms have the potential to offer fast and secure monetization options for creators without the pesky transaction fees. Streaming with payments big believers key takeaway SuperChats virtual gifts Bits Thanks to Saar Gur for his help with this article! Thanks for reading! We’re excited about the opportunity to build amazing consumer applications in the blockchain space, and would love to talk to anyone working on something we should know about. We’d also appreciate your questions or feedback — you can reach us at or on Twitter . twins@crv.com @venturetwins

The state of consumer blockchain from Cryptokitties to Blockstack (+ our market map!)

We spent 3 days with 25,000 tweens — here’s what we learned! Last week, we attended our first , an online video convention for creators, fans, and the media industry founded by and . We were a bit late to the party — the conference started in 2010 with 1,400 attendees, and has since ballooned to 25,000+ people. It’s now widely recognized as a key destination for brands to reach the Gen Z demographic. VidCon Hank Green John Green As early stage consumer investors, we saw VidCon as a great opportunity to better understand the online habits of today’s teens. They may be young, but they’re often influential early adopters of the next big brands, social networks, and content distribution platforms. According to Nielsen, Gen Zers now make up the largest percentage of the population (27%), and consume an average of 30 hours of digital content weekly. We bounced around between the conference’s three tracks, which each attracted different audiences — (millennial/Gen Z fans), (aspiring influencers), and (media and finance executives). We also spent time in the Expo Hall, which featured booths and lounges from brands ranging from Instagram to Snickers to Audible (check out TubeFilter’s review ) — even Invisalign sponsored a and a . Community Creator Industry here ferris wheel giant candy dispenser For anyone who couldn’t make it to Anaheim (or got stuck at ), we recapped our top ten takeaways from the week, grouped into key categories. TanaCon For VidCon week, the outside of the Anaheim Convention Center was plastered with promo materials for upcoming original content from YouTubers — including Liza Koshy’s Liza on Demand, and Joey Graceffa’s Escape the Night, which are both hosted on YouTube Red. Creators/Influencers . This won’t come as a surprise to anyone who read our post on the , but being a successful creator is big business. As gamer (1.8M subscribers) said on a panel about brand deals, “We’re all companies at this point.” Though social media stars may get started making webcam videos in their basements, many eventually hire teams of agents, managers, and staff who handle editing, social posts, brand engagements, and production schedules. The creator still ultimately owns his or her brand, but just like traditional celebrities, day-to-day decisions are abstracted away from them to people who can monetize their image. 1.Creators are companies rise of influencers StacyPlays One of the strongest influencer brands for Gen Z at VidCon was that of 15-year-old JoJo Siwa (pictured above as part of the Nickelodeon display). Siwa, a former Dance Moms star, is now a YouTuber, singer, and author, and is signed to Nick’s talent label — she performed at VidCon’s Night of Dance and at the Night of Awesome. Grant Thompson, “ ,” is a perfect example of how a creator turns into a brand. He started YouTube has a hobby, but ended up leaving his job as a pilot to make videos full-time for his almost 10M subscribers. He now employs a team of 13 people that serve as a full production company and help him find new ways to monetize his content. The King of Random Brands are tempted to script influencer posts, but creators don’t want to feel like they’re shilling a product. (Fine Brothers Entertainment, 17M subscribers) includes a clause in contracts that allows him to ignore 50% of edits that brands propose. Creators are more positive on longer-term partnerships that integrate the brand naturally, like a video series or a channel takeover. If fans feel a like brand is enabling content the creator otherwise couldn’t make, they’re more likely to have a positive association. (10M subscribers) said he only works on brand campaigns that feel consistent with “what fans expect” from him, and where he can make the brand the “hero” of the video in an authentic way. 2. Struggle for authenticity. Benny Fine Kurt Schneider Schneider cited his Candyman brand video with M&M’s as a successful example of an influencer/brand collaboration — it looked like something he might normally make, got a great reception from his audience, and the like/dislike ratio was in line with his non-sponsored content. On the topic of authenticity, producers of YouTube Red series said they’ve found success in treating influencers like stars, not actors. Fans want to see influencers appearing as themselves, not as another character. is what showrunner Adam Lawson calls a “surreality” show — influencers are placed in a historical setting and have to complete challenges to make it back to the present. While the show has a group of background actors with scripted lines, the influencers were completely unscripted and were asked to just respond naturally to the action around them. Escape the Night Escape the Night Along with CPO Neal Mohan’s product announcements, YouTube’s featured two creators — music producer , who boasts 10M+ subscribers, and therapist , who has a relatively modest 360k subscribers. YouTube’s decision to highlight Morton, whose videos help people worldwide struggling with mental health issues, illustrates a repeated theme that creators should make a positive impact on the world. Jennifer Wiener from Fullscreen Media, an agency that manages influencers, said that the most successful creators focus on a message of “empowerment, diversity, and inclusion,” and highlighted that younger viewers “want to do good and see others doing the same.” 3. Creators should do good. annual keynote Kurt Schneider Kati Morton This theme carried through the track sessions for young fans — we counted more than 25 sessions on topics like racial equality, sexuality, feminism, and cyberbullying, including: “Body Image, Gender, Presentation, and Online Video,” “We’re Here: Talking about Marginalized Identities,” and “They See Me Trolling: How to Create a Kind Community.” The trailer for the upcoming movie based on Angie Thomas’ also premiered at VidCon, and the encouraged visitors to “Spread Love” by putting up positive messages on a public board. Community The Hate U Give brand’s popular booth Photos of The Hate U Give booth at VidCon. Courtesy of @cathhick . Brands and Monetization It’s no surprise that teens hate pre-roll ads. Ads are also an inconsistent revenue stream for creators, as they have to rely on the platform’s algorithm and CPMs are low. Smart creators diversify their revenue through subscriptions for premium content, brand partnerships, and merch/live shows. In a panel on monetization, (2.5M subscribers), Burnie Burns (9.5M subscribers via ), and (6.2M subscribers) all emphasized that they’ve focused on non-ad revenue — Rooster Teeth has 300k+ paying subscribers for its , while merch and live shows have been crucial for Hannah and Phillip. 4. Pre-roll ads are passé. Hannah Hart Rooster Teeth Philip DeFranco SVOD service Nielsen’s Amanda Tarpey released data at VidCon on SVOD growth in households between 2017 and 2018 — their data shows growth across all generations, with strongest adoption for millennials and Gen Z. YouTube’s at VidCon focused on making it easier for creators to monetize beyond ads, including channel subscriptions and merch shelves that live directly below videos. The company also released early stats on some of its other monetization initiatives — 50% of channels using doubled their revenue in the first three months of 2018, and 65% of channels using have more than doubled their livestream income. product announcements FameBit SuperChat Though many creators are grateful to YouTube for launching their careers, there’s an underlying tension around who “owns” the relationship with fans. This issue has become increasingly important as YouTube recently required users to “opt in” to notifications for new videos on channels they’ve already subscribed to (which resulted in a significant for many creators), as well as stricter . 5. Who “owns” the fans? drop in views monetization policies Hannah Hart voiced her frustration with the new notification policy, noting that it created unnecessary friction for fans to access her content. When asked about the best piece of advice she’s received, she responded: “Don’t build mansions in someone else’s backyard.” Burnie Burns also warned creators against relying too heavily on one platform, arguing that the demise of Vine illustrated the importance of moving your audience to a destination that you control. Philip DeFranco took more aggressive action when he launched his own app, DeFranco Now, in May 2018 after comparing YouTube to an “alcoholic, negligent stepfather.” It was DeFranco’s at VidCon, as he plans to start focusing on his own events. last year Frustration with YouTube and VidCon motivated the launch of TanaCon, an alternative conference organized by YouTube influencer Tana Mongeau. The event, which was held in Anaheim the same week as VidCon, was born out of Mongeau’s that VidCon wouldn’t feature controversial creators like herself. Though TanaCon was poorly and eventually shut down, Mongeau was able to attract more than 20k teen fans as well as like Shane Dawson, TheGabbieShow, Casey Neistat, and Miranda Sings. frustration organized huge creators TanaCon sold 5,000 tickets but was by another 15,000 teens eager to meet their favorite YouTubers. Photo courtesy of . reportedly mobbed @SocialBlade . To generate real value from campaigns, many brands have set the following priorities for influencers they partner with: (1) engagement (likes, comments); (2) views; (3) subscribers. As purchase behavior continues to shift towards mobile and social platforms, influencers have a huge ability to drive sales, but it’s key that viewers actually watch and engage with the content, and use it to make purchasing decisions. 6. Engagement > views The increasing focus on engagement over reach was echoed by brands and publishers, whose KPIs for content have shifted away from pure views. Jay Holzer, Head of Linear Programming at Tastemade, mentioned that his team primarily focuses on watch time over number of views — they want to ensure they are building a real connection with viewers who will return to their page. Similarly, NBC worked with 40 music YouTubers for a — while they tracked views, they specifically focused on boosting search traffic for , which was up 170% over the course of the campaign. campaign The Voice The Voice . The rapid rise of e-sports caught many brands by surprise, and they continue to struggle with how to reach these viewers in an authentic way. It’s a valuable demographic — viewers often stream hours of content with no break and are eager for opportunities to emulate the gaming lifestyle. Brands need to think of creative ways to establish a value-add presence in the space — Perrin Kaplan of Zebra Partners cited IKEA’s new for gamers as an example of this. 7. Brands need to catch up on e-sports ergonomic furniture HyperX and Allied Esports on a mobile touring arena that made a stop on the VidCon Expo Hall floor — conveniently located next to the Axe (yes, the body spray company) Gaming Lounge. partnered Other industry experts encouraged brands to think more strategically about which games best fit their ethos and not scramble to sponsor top hits like Fortnite. UEG’s Lauren Flanagan said that the current environment reminds her of youth soccer, where “everyone is chasing the same ball up and down the field” rather than spreading out and pursuing different properties. VidCon did feature a case study of one successful partnership in the space — Hot Pockets ran a social in 2017 where they dedicated most of their marketing budget to 20 gaming influencers, and saw a 6–7% lift in business. campaign Wandering around VidCon’s giant Expo Hall, we that almost every booth had two things in common: they were interactive, and they were optimized for Instagram. At the very least, this meant a trendy wall to snap a photo against (Facebook had mini photo-rooms dedicated to this), but most brands got a little more creative. Hubert’s Lemonade had a ball pit filled with lemonade floaties and a claw machine of merch, while Nickelodeon built a giant obstacle course. Brands weren’t shy about encouraging social posts, putting up signs with a hashtag and request to share on Instagram. 8. Gen Z wants interactive and Instagrammable experiences. quickly realized A few of the brand booths in VidCon’s expo hall. Clockwise from upper left: Ugly Dolls, Hubert’s Lemonade, United Airlines, and Califia. It’s easy to make a physical booth interactive, but how can content creators do the same for YouTube? Chase Landau, VP of Partnerships at , said that the company’s creators focus on videos about things that kids can replicate at home. How-to videos on cooking, building things, and gaming are often the most popular content. In another interesting example of interactive content, Twisted Food launched a delivery-only restaurant that allows viewers to order the food they see in the company’s viral . pocket.watch Facebook videos Social and Entertainment Platforms UGC platforms often struggle with balancing freedom of speech and creating a safe community. At VidCon, many creators voiced the opinion that YouTube and other platforms should be doing more to ensure that users aren’t exposed to harassment or inappropriate content. On a panel titled “Why 2017 Sucked for Online Video,” vlogger criticized YouTube for leaving up Logan Paul’s “suicide forest” video for 12+ hours, and argued that real people (not bots) should review and approve featured or trending content. 9. Platforms are responsible for content. Jana Hisham Tech execs have historically disagreed with the idea that they are responsible for user content, but it seems the tide is beginning to shift. At Twitch’s keynote, co-founder Kevin Lin said that the company has a “responsibility to create a safe environment for creators and fans.” Trolls, be warned — platforms are making strides to rein in the Wild West of the Internet. YouTube, IG/Facebook, Snap, and Twitch are in a race to become the primary destination for video. YouTube is encroaching on Instagram with the launch of a for casual, short-form videos. Meanwhile, Instagram made waves with the , which allows users to create longer-form, YouTube style videos. Facebook VP of Product Fidji Simo said that her team is working to encourage more creator content on Facebook Watch due to consumer demand. And while Snap has lagged in creator videos, the company had a big — the Snapchat Shows feature will be opened up to creators, starting with a makeover show from of 10. Platforms converge to multi-format video. “Stories” product launch of IGTV VidCon announcement Patrick Starrr Face Forward. You can catch the full YouTube keynote above — other than YouTube Stories, some of the biggest announcements were the launch of monthly memberships, expanded merch opportunities (including a partnership with Teespring), and a new Premieres feature for the live debut of pre-recorded videos. Creators have mixed feelings on the idea of platform consolidation. Some seem exhausted by the challenge of producing content to fit the demographic, format, and viewing habits of each platform, and would welcome the ability to focus on one. Others, especially newer creators, appreciate the ability to publish across many platforms and figure out where their content “hits.” NBA Entertainment SVP David Denenberg said the NBA has benefited from platform diversity — they can livestream a game on Facebook, post highlights on YouTube, and do player Q&As on Instagram. Denenberg said the NBA works with social platforms to produce the best content for viewers —after a contact at Facebook recommended videos with tighter angles, the NBA installed new cameras in arenas and saw engagement increase 2.5x. Thanks for reading — we hope you found this post to be helpful! If you were at VidCon this year or in past years, we’d love to hear your feedback below, or you can reach us on email at twins@crv.com or on Twitter . @venturetwins Like this post? to help more people see our story, and share it with your friends! Clap for it Interested in reading more content from us? 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