When you watch a Youtube video from your favorite creator, there will most likely be ads rolling before the video actually starts (which I know you're very tempted to skip 😅). The profit from these ads is paid to the original creator by Adsense as compensation for their contribution to the site. But what if I told you, in the future, there might be a possibility that YOU might share part of the beneficiaries?
The original idea for this change in content creator economy comes from the term "fractional ownership" that originated from the real estate market. In this sense, multiple people or groups might own a tangible asset together as investors, and share the profits of the asset together.
Taking this term into the context of the content creation market, many artsists and creators in this age, Youtubers included, are producing premium content that costs millions of dollars in production. Take Mr. Beast for example, who reportedly spent 3.5 million dollars to recreate a set of Squid Game for one episode on his channel - a budget equals to that of major Hollywood production studios. Niko Omilana bought most of the Apple products from a real Apple store to open his own "fake" Not-Apple-Store to document a huge prank on the public in London for a single Youtube video. There is no limit to the budget for content creators in this age to gauge audience attention and views, but in order to have the budget, the creators themselves first must have enough views. This is the loophole where fractional ownership in content creation comes in play.
What if the creator has an ambitious content project that they are passionate about making, and their audience is also passionate and want to see? The answer you might have in mind is through crowdfunding, which other creators have tried before, such as through GoFundMe or SeedInvest. But here's the difficulty in these platforms:
Other solutions include using the creators' personal funds, getting brand sponsorship, selling merch - but this all comes at a cost, whether it be that there's no brand necessarily aligning perfectly with the mission of the content to be suitablle sponsor, or the creator isn't yet at a comfortable position to start producing and selling merch.
So, an easy way to fund creators for this ambitious project is allowing their viewers to invest in the production process by letting them own a fraction of the final piece.
Explained by Colin and Samir, experts on content creation and hosts of the Colin & Samir Show:
"What we think the future is, is that fans and and supporters being able to participate and own a share of those catalogs (that creators have created")."
Let's break this down in an easy example. You really love Creator X who makes cooking videos on chocolate art. You think Creator X has a lot of potential to scale up his production, you get so much joy from watching his videos, Creator X has been an integral part of your inspiration in life and you want him to make a giant chocolate art video in the middle of Times Square. Hundreds of other subscribers also support your idea, but Creator X doesn't have enough fundings to execute it. So, you and the other hundred subscribers each donate a fraction of the production cost, and in return, after Creator X uploaded the video on Youtube and receive Adsense money from the video, YOU get to receive a fraction of the revenue.
This is a picture-perfect outcome mapping of the benefits of the scheme. In reality, there are many sites already implementing this fractional ownership concept into content creation, such as Royalty Exchange. Artists are trying out this format as a fundraising campaign, even through methods such as NFTs.
Because the model is still in its incubation process and frankly not many creators have started producing their content with this funding method, there are questions that arise to test the model. Different types of ads on Adsense generate different values of profits, so how should the investor be paid? To what fraction of "ownership" should the investor get when it comes to "owning the content"? How can creators onboard viewers with the novel idea and gauge enough interest in this ambitious project?
Those are questions that I am seriously curious about, and hopefully, will be able to find the answer to after observing more and more changes in the creator economy.