SocialFi could empower content creators to break free from brand partnerships
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There is an old truth that if you do what you love, the money will follow. For some influencers, that’s true; the rise of platforms like YouTube, Instagram, Twitch and TikTok has provided creatives with the means to share with millions of people what they love and get paid for it.
Consider a pivotal role: Sharing their home game online, six voice actors were able to turn Dungeons & Dragons from a niche interest to a mainstream sensation† Even people with strange hobbies can make a living on social media if they get enough visibility – Netflix recently launched a show with baking influencers who specialize in creating hyper-realistic cake replicas of, for example, everyday objects.
The fundamental philosophy behind influencer culture is that if your content is compelling enough, you should be able to make a living creating it. per hour MediaKix Report 2020, there are currently up to 42 million influencers active on TikTok, Instagram and YouTube. But while the creator’s interests are nearly infinite, their chances of financial success are not.
Monetization provides limited income — and only for certain creatives
There is no doubt that influencers with established audiences can earn a living. According to CNBC estimates, YouTubers who have 1,000 subscribers and generate 24 million views per year can earn about $100,000† However, monetization is not a given for new creators; To be eligible for the YouTube Partner Program (YPP), users must have a minimum of 1,000 subscribers and have accumulated 4,000 “valid public watch hours” in a year.
Plus, it takes time and effort to create the kind of quality content that attracts subscribers — and when an aspiring influencer chooses to create content full-time, they lose the financial safety net that a nine-to-five job would otherwise have. commanded. Those who qualify for monetization may still need to supplement their income to keep afloat if their advertising revenues are not generating enough income.
Some creators may be trying to bridge the funding gap by offering monthly subscription options to their audience through platforms like Patreon. However, many mid-market influencers opt for a more lucrative, albeit risky option: brand partnerships.
Brand partnerships can provide crucial financial support — and undermine authenticity
Today, influencer marketing stands as a $13.8 billion industry† In theory, it’s a perfect partnership: brands want to target audiences with specific interests, and influencers can provide a platform to reach them.
But sometimes selling airtime to viewers can seem like they’re sold out.
“By using their own social media channels, influencers often give the impression that they have a personal rather than a commercial relationship with the brand and products they promote,” researchers explained: in a study published in the Journal of Interactive Marketing earlier this year.
The study’s authors noted that this trend could pose a problem for smaller content creators, as consumers don’t expect to have the same business relationships as a mega-influencer, such as a celebrity.
“If nano influencers reveal a paid relationship, consumers may feel cheated because they expected the post to be a personal recommendation,” they explained. “So consumer expectations are negatively debunked, which reduces the trustworthiness of that post and then leads to lower ratings from both the brand and the influencer.”
Brand partnerships also have ethical implications. Popular YouTube mixologist Greg Titian talked about this topic last Decemberwhen he posted a video review of two automated drink preparation machines.
“Bartesian has been in touch with me for a long time to do something about sponsorship,” said Titian. “And I didn’t answer, like… I can’t use your machine in a sponsored thing because I have to rate it, and I can’t rate it if you give it to me for free or pay me to rate it. I had to pay for this with my own money.”
There is no doubt that brand partnerships provide an invaluable financing option for full-time creators. Adopting the wrong brand — or simply showing too many brands — can backfire if viewers begin to see the content as too commercial or inauthentic for the experience they expect.
But how can influencers maintain their authenticity without going bankrupt? Some lucky ones can go viral and accumulate enough viewers to earn a living through monetization; however, most will have to strike a balance between promotion and authentic content to stay afloat. The risk of alienation from the public is everlasting and inevitable; a poorly handled message can drive valuable viewers away for good.
But what if content creators not only had the means to embrace authenticity, but also the chance to get paid to stay true to their audience? SocialFi – cryptocurrency-powered social media – may well give content creators the opportunity they need to thrive without relying on brand partnerships.
SocialFi could empower creators to deliver authentic content
SocialFi puts a DeFi twist on social media engagement. Cryptocurrency social networks allow users to earn tokens by creating or interacting with content; over time, these social activities can translate into substantial real-world income if a creator is popular enough.
While SocialFi is a relatively new concept, it doesn’t feel out of place – at least the idea is a natural next step in platform development. Instead of asking consumers to learn new behaviors, SocialFi apps would simply monetize the activities users already engage in every day.
The movement has already begun; last fall, Twitter started allowing Bitcoin tips for creators. Around the same time, Binance Smart Chain announced that SocialFi would be a key focus for its $500 million investment program. Solana Ventures, an incubator focused on developing innovative Solana-based apps, similarly shared its intention to allocate $100 million in funding to web3 social startups.
The importance of these improvements to content creators cannot be underestimated. Mass adoption of SocialFi will allow creators to leave ethically challenging business partnerships and rely on their audiences for funding.
Audiences, for their part, could play a more active role in empowering their favorite creatives to deliver authentic content. Consumers are undeniably willing to do this – just look at Patreon’s latest attendance figures. Today, the creator finance platform houses more than 6 million active subscribers who collectively provided more than $2 billion to creators.
Or consider viral examples like author Brandon Sanderson’s 2022 Kickstarter. In just 35 minutes, Sanderson’s campaign to fund four new books blew past its $1 million goal† At the time of writing, the campaign had reached nearly $35 million.
The reality is that if people want specific content, they will do what they can to help the creator produce it. SocialFi could provide digital creatives with the means to deliver content without risking audience engagement by relying on advertising and partnerships. This is the next step in the evolution of social media – SocialFi can ensure that, for creators who share their interests with the world, the money will follow.
Sakina Arsiwala is co-founder of Takic†
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