Evolving Money: Rebuilding the Creator Economy (Sponsored Content)

Summary

Foundering Podcast Summary: Evolving Money – Rebuilding the Creator Economy

Podcast Title: Foundering
Episode Title: Evolving Money: Rebuilding the Creator Economy (Sponsored Content)
Host: Bloomberg
Release Date: December 19, 2024

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Introduction

In the latest episode of Foundering, Bloomberg delves into the transformative potential of blockchain technology in reshaping the creator economy—a sector traditionally dominated by powerful social media platforms. Titled "Evolving Money: Rebuilding the Creator Economy," this episode, sponsored by Coinbase and Bloomberg Media Studios, explores how blockchain can empower content creators by granting them ownership, enhancing revenue streams, and fostering direct relationships with their audiences.

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The Persistent Struggle of Content Creators

The episode opens by highlighting the ongoing challenges creators face in the digital age. Jesse Pollack, VP of Engineering at Coinbase and creator of Base, articulates the frustration of creators who, despite generating viral content, see only a minuscule fraction of the profits:

Jesse Pollack [07:13]: “The creator is left making whatever money the platform offers them. I estimate it's about 5%, and the platform keeps the rest.”

This systemic issue isn't novel. It echoes historical struggles where gatekeepers controlled the dissemination and monetization of creative works. Drawing a parallel to 18th-century England, the podcast recounts philosopher John Locke's fight against the monopolistic Worshipful Company of Stationers, emphasizing that the modern digital landscape mirrors these past power dynamics.

Dr. Adrian Johns [03:31]: “It was essentially a monopoly, a kind of cartel that looked after the whole trade.”

Despite the advent of the internet promising democratization, the consolidation of power within a few colossal platforms continues to stifle creators' autonomy and earnings.

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Blockchain: The Game-Changer for Creators

Transitioning to solutions, the podcast introduces blockchain as a revolutionary tool capable of dismantling the entrenched gatekeeper model. Jesse Pollack discusses Base, a platform designed to leverage blockchain technology to empower creators:

Jesse Pollack [06:12]: “Base is a platform that people can use to build all kinds of apps with blockchain technology.”

By moving "onchain," creators can retain ownership of their content, access transparent algorithms, and establish direct monetization channels. The promise is to shift control from opaque platform algorithms to an open, decentralized internet where creators dictate how their work is distributed and monetized.

Jesse Pollack [08:46]: “When it comes to things like owning my art and getting paid for it and reaching my audience, you do the exact same thing.”

This paradigm shift envisions a "level playing field" where creators have equal opportunities to thrive without being tethered to the whims of major platforms.

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Real-World Applications: Doodles and Blackbird

To illustrate blockchain's practical applications, the episode features Julian Hogan, CEO of Doodles, a Web3 entertainment company. Doodles exemplifies how blockchain can foster a vibrant creator-fan ecosystem:

Julian Hogan [12:20]: “We're basically what a modern day cartoon franchise might look like. We make short films, we make original music.”

One standout project, Project Gray, a short film premiered at the 2024 Toronto International Film Festival, showcases how blockchain can integrate viewers directly into the content:

Julian Hogan [13:30]: “People use avatars to communicate constantly. They make gifs, they make stickers, they make short form animations.”

By enabling users to own their digital avatars and participate in the storytelling process, Doodles creates a deeper, more personalized connection between creators and their audience. This approach not only enhances engagement but also opens new revenue streams as fans are willing to invest in owning unique content.

Another example is Blackbird, an on-chain dining rewards app developed by Jesse Pollack:

Jesse Pollack [15:38]: “Blackbird is kind of like a traditional dining rewards program. But by going on chain, the app gives restaurants a direct, transparent connection with every customer.”

Blackbird allows restaurants to build personalized relationships with customers, enhancing their dining experience through tailored interactions based on transparent customer profiles.

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Envisioning the Future: An Open, Creator-Centric Internet

The episode culminates with a vision of an internet where creators and consumers coexist in a mutually beneficial ecosystem. By adopting on-chain platforms, the traditional gatekeepers' monopolistic control diminishes, paving the way for a decentralized, creator-first internet.

Maggie Lake [16:46]: “We're actually going to have a Cambrian explosion of people who are building on that graph and that network. It’s a new Internet that’s going to put creators, musicians, videographers, small businesses first.”

This transformation is expected to accelerate as more businesses and individuals recognize the advantages of blockchain-enabled platforms, leading to widespread adoption and a fundamental shift in how content is created, shared, and monetized.

Jesse Pollack [17:27]: “Every time a prolific writer or a local business or any of us goes on chain, we could be ushering in a new era in history where there's no gate, no wall that keeps creators from having control over their work, earning money from their fans, and growing with the community that matters most to them.”

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Conclusion

"Evolving Money: Rebuilding the Creator Economy" offers a compelling exploration of how blockchain technology, through platforms like Base, Doodles, and Blackbird, can revolutionize the creator economy. By decentralizing control, enhancing transparency, and fostering direct creator-fan relationships, blockchain holds the promise of an equitable, thriving digital ecosystem where creativity is truly rewarded.

Maggie Lake [17:27]: “Thank you to Adrian Johns, Jesse Pollack and Julian Hogan. This is Evolving Money, a podcast from Coinbase and Bloomberg Media Studios.”

For creators and consumers alike, this episode underscores the potential of blockchain to redefine ownership, monetization, and community within the digital realm.

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Notable Quotes:

• Jesse Pollack [07:13]: “The creator is left making whatever money the platform offers them. I estimate it's about 5%, and the platform keeps the rest.”
• Jesse Pollack [08:46]: “When it comes to things like owning my art and getting paid for it and reaching my audience, you do the exact same thing.”
• Julian Hogan [12:20]: “We're basically what a modern day cartoon franchise might look like. We make short films, we make original music.”
• Jesse Pollack [17:27]: “Every time a prolific writer or a local business or any of us goes on chain, we could be ushering in a new era in history where there's no gate, no wall that keeps creators from having control over their work, earning money from their fans, and growing with the community that matters most to them.”

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This comprehensive summary encapsulates the key discussions, insights, and forward-looking conclusions presented in the episode, providing a clear understanding for those who haven't listened to the full podcast.

Transcript

[Maggie Lake]

Because you're a subscriber to this Bloomberg podcast, we thought you'd be interested in a sponsored podcast called Evolving Money. Produced by Coinbase and Bloomberg Media Studios, it explores how money has changed over the centuries and whether cryptocurrency is just the next logical evolution of how we pay for things and store long term value. Here's a recent episode.

[Jesse Pollack]

Every day, billions of people share their creativity online. But when their creative work goes viral, who benefits? Imagine a young woman, a dancer with a modest social media following. One morning she comes up with a new dance at the kitchen table and posts a video. Her followers don't just like it and scroll on. They start imitating her moves and posting their own versions of the dance. And big media channels get a ready made story by covering the viral craze. There's even a cheeky SNL skit. The platform she originally posted on is benefiting from from the traffic and ad revenue. And they decide exactly how much of the pie she gets. But does it have to be that way? What if new technologies could give creators complete ownership over their content, earn exponentially more money from their fans, and create new revenue models, rebuilding the creator economy as we know it? Welcome to a new season of Evolving Money from Coinbase and Bloomberg Media Studios. I'm your host Maggie Lake. On this podcast, we'll continue to take a different look at cryptocurrency. It's been cast as a radical departure for the monetary system, but what if it wasn't radical at all? This season, as we've seen more and more businesses, institutions, and consumers adopt cryptocurrency, we'll dive deeper into the newest applications of blockchain technology as we explore how money has changed over the centuries and look for lessons that might predict its next evolution. In this episode, we're looking at how blockchains might revolutionize how people post, interact with, and profit from original content online. Most content creators know that the handful of social media platforms who distribute their work have enormous power over how much they earn. This isn't a new problem. Artists and thinkers have always had to deal with gatekeepers fighting for the right to own their work and its proceeds. But can blockchain technology really disrupt the walled garden landscape that shapes the flow of art, ideas and money in the 21st century? To find out, I'll talk to Jesse Pollack, creator of Base, and Julian Hogan, CEO of the Web3 Entertainment company Doodles, two leaders who are charting a new path forward by bringing creativity and content on chain. Let's go way back to 1694. Perched at his desk, writing a protest letter by candlelight, is philosopher John Locke. You remember him from history class. Locke's been wanting to publish his writing on religion, but he's been blocked from doing it. You see, after the invention of the printing press, a single group controls all publishing in England. The Worshipful Company of Stationers. What a name, right?

[Dr. Adrian Johns]

The Stationers are everybody who's involved in the making and distribution and sale of books. So printers, binders, type founders, booksellers, the people who sell the books to the public.

[Jesse Pollack]

That's Dr. Adrian Johns. He chairs the history department at the University of Chicago, specifically specializing in the histories of science, the book, media and information. This group of publishers, the Stationers, have a royal warrant to print, and this warrant protects the Stationers from competition.

[Dr. Adrian Johns]

It was essentially a monopoly, a kind of cartel that looked after the whole trade.

[Jesse Pollack]

Locke is one of the loudest voices in a chorus of thinkers, writers and printers calling for an end to the stationer's monopoly. And eventually, in 1695, the Crown lets its royal warrant with the Stationers expire.

[Dr. Adrian Johns]

When that act lapses, there's no legal sanction anymore against pirating books. It's a kind of golden age for literary piracy. So whatever you write is free game for anybody.

[Jesse Pollack]

This period of anarchy lasts for about 15 years, until 1710, when Parliament passes a new act, the Statute of Anne. Now, if any other person who isn't explicitly approved by the author to print or reprint their work tries to reproduce it, the author can basically say, hey, stop, that's mine, and ask a court for an injunction. This was, in essence, the birth of copyright law. Sounds like a big improvement, right? But the publishers respond by forming cartels, called congers, to reclaim their power.

[Dr. Adrian Johns]

In practice, if you have the 12 biggest publishers in London all collaborating on this, they have enormous power. So de facto, these congas kind of act to preserve the same kinds of rights that the Stationers Company had always registered before.

[Jesse Pollack]

So the vast majority of writers still don't have real control over how their works are made public or what they'll earn from their ideas. The same dynamic continues in some form to this day.

[Dr. Adrian Johns]

So we've seen, notoriously, through various mergers and so forth, the development of sort of super media firms that hold the publishing houses together. This idea that the commanding heights of the literary culture are held by a relatively small number of very powerful commercial operations, you know, it feels a little bit uncomfortably like we're back to that.

[Jesse Pollack]

As the world has moved online, so have the same issues around consolidated power and ownership rights that have plagued creators for quite literally centuries.

[Maggie Lake]

I think if you look at the last 20 years, with the creation of the Internet, we've seen the emergence of these incredible platforms that have connected people all around the world.

[Jesse Pollack]

That's Jesse Pollack, VP of engineering at Coinbase and creator of Base.

[Maggie Lake]

But I think at the same time, one of the big challenges has been that as people have brought their creativity online, they've predominantly brought it into these platforms that they don't control or own.

[Jesse Pollack]

Base is a platform that people can use to build all kinds of apps with blockchain technology. Jesse told me he created the platform because he wanted to help content creators and small businesses take true ownership of their work by building more direct relationships with fans and customers and deciding how to earn money through those connections.

[Maggie Lake]

So let's say you're a creator and you make a video. You take your video, you put it on a platform, and then it gets distributed kind of based on an algorithm that you can't see or understand. You get paid whatever that platform decides to pay you, which is a total black box.

[Jesse Pollack]

But if you're a web creator, it's not like there's much choice.

[Maggie Lake]

And if you say, hey, I want to take my distribution somewhere else, you don't actually have that option. You are stuck in the existing system.

[Jesse Pollack]

And so the creator is left making whatever money the platform offers them. Jesse estimates it's about 5%, and the platform keeps the rest. Then the creator has to pay transaction fees and face delays in getting paid.

[Maggie Lake]

And that's a thing that I think just in the last few years, people are waking up to as they see, oh, I feel like I'm getting scraps when these corporations are making hundreds of billions of dollars. And I think that collective awakening is kind of bringing us to a new moment where we're realizing, hey, maybe we need better tools, maybe we need better platforms, and maybe we need a better Internet that actually puts creators first.

[Jesse Pollack]

That phrase, a better Internet, Jesse means that literally. He thinks that blockchain platforms can bring the essential tools for communication, purchases, and analytics outside the walled gardens of today's social media. This wouldn't just shift the places where content goes viral. It would also shift where people make money and how new revenue models can take off. I asked Jesse to walk me through this transition, starting with the difference between going online to going on chain. So what do you mean when you say onchain?

[Maggie Lake]

Onchain is the next generation of the Internet that's built on blockchains like Base. And it's a powerful Internet where everyone, everywhere has the same access and is on a level playing field where they're able to build and use new apps that are 10x better.

[Jesse Pollack]

So how will that look? What change will that mean for creators? When it comes to things like owning my art and getting paid for it and reaching my audience, you do the exact same thing.

[Maggie Lake]

You take your music, you take your video, and you put it on chain. But now all of the algorithms are open so you can actually understand what's going to lead to more distribution versus less distribution. And if you want to take your network to another app because you're excited about trying something new, you can just take it with you because it's yours.

[Jesse Pollack]

So the creator retains control over the distribution and monetization of their work. And as more creators see that benefit and take their work on chain, the enormous slice of revenue that they're used to handing over to social media platforms could fuel a new network of businesses.

[Maggie Lake]

That network that you're distributing to is not controlled by one company. It's open and accessible to everyone who wants to build on it. And so what that means is we're actually going to have a Cambrian explosion of people who are building on that graph and that network. And it's a new Internet that's going to put creators, musicians, videographers, small businesses first and going to make it so businesses have to serve them and have to help them be successful on a new open platform where everyone can win.

[Jesse Pollack]

The musician example caught my ear because I'm always keeping tabs on my favorite artist and trying to see if I can catch them at a live show. Jesse showed me how my relationship to my favorite artists could be much more personalized if each step were brought on chain.

[Maggie Lake]

I think the thing that's really powerful about the new on chain platform is that these creators, these musicians, they can actually build a deeper relationship with the people who care most about them. Because those folks are going to be able to have a relationship where they say, hey, I want to support you and I'm going to mint your song. And then that's going to be this kind of like, historical record of how I participated with you in a new platform. And that record's gonna span across everything that you do.

[Jesse Pollack]

Say I buy an album, then buy some merch, then watch their livestream. If this all happens on chain, the artist will be able to directly track all of those interactions between us across any app and use that to personalize or deepen our relationship.

[Maggie Lake]

The artists are then gonna be able to look across all that and say, oh, here are the people who've listened to me on this app and that app and showed up at my show. And now I'm going to say, okay, let's give them a targeted experience. For instance, let's make it so that they can be first in line for purchasing tickets.

[Jesse Pollack]

Or the artist could send me personalized messages, exclusive set lists, or invite me to a post show meetup with other superfans.

[Maggie Lake]

With this new on chain infrastructure, we're actually going to be able to build more customized, more human, more direct experiences that let artists and creators reach their most important, most connected fans, give them better experiences which will make that relationship deeper and really be a win win for both the creative side and the consumption side.

[Jesse Pollack]

This new on chain world isn't just theoretical. It's here now.

[Julian Hogan]

We believe that we're building a next generation entertainment company.

[Jesse Pollack]

That's Julian Hogan. As the president of Billboard, he transformed that brand from a music trade magazine to an international multi platform experience. Now Julian is the CEO of Doodles, a digital entertainment platform that's built entirely on Chain.

[Julian Hogan]

We're basically what a modern day cartoon franchise might look like. We make short films, we make original music. Those often come with music videos, animated music videos. We do digital comics, illustrated posters. We really use humor in all of our content.

[Jesse Pollack]

But Doodles is also a social community. In the Doodles universe, when users sign up, they create a digital avatar, a doodle, which they can customize however they want. Because the avatar is on chain, it's completely unique to the user.

[Julian Hogan]

People use avatars to communicate constantly. They make gifs, they make stickers, they make short form animations. And what we're basically letting people do is take our ip, our brand, customize it to fit whatever they want their digital likeness to be.

[Jesse Pollack]

That avatar also has something Julian calls a collector's profile, where they can pay for videos, illustrations and animations from the Doodles universe. So they get to create a permanent identity and show off their fandom with content they truly own. Doodles recently collaborated with Pharrell Williams and Lil Wayne to produce Project Gray, a short film hosted on the Doodles Network.

[Julian Hogan]

A 20 minute short film that would ultimately set the foundation for all the storytelling that we wanted to do in our universe.

[Jesse Pollack]

During the making of Project Gray, Doodles included some of its users on chain avatars. In the actual film, they can say.

[Julian Hogan]

To their friends and family, like, hey, I'm in a Pharrell music video. Like, this is a really kind of novel concept that doesn't exist in any other form of media.

[Jesse Pollack]

That moment pointed to the future of immersive content, where every viewer had a concrete stake in the story they were watching. The film ended up Premiering at the 2024 Toronto International Film Festival.

[Julian Hogan]

The audience, they were blown away. Like there were people crying. There were people, like it gave them chills because it's truly becoming a community, it's truly becoming part of the IP and the brand versus just a passive participant.

[Jesse Pollack]

Doodles posted the short film on YouTube for everyone to see, like all of its original content. But Doodles also allowed people to buy tickets for the film on chain, and users could add the film to their collectors profiles. In the end, they sold more than 50,000 tickets.

[Julian Hogan]

And that concept right there is unheard of for most creators. Wait, you can sell content and people want to own that content? They're willing to pay you a dollar, 50 cents, 30 cents to own, collect that. And the answer is yes. And I think the more and more people start learning about distributing content on chain, the more people are going to be drawn to it. And a lot of that really boils down to how can you have fun with your friends on the Internet.

[Jesse Pollack]

Going on Chain can give economic power back to creators and help them create stronger relationships with their fans. And this community building aspect of the technology goes beyond the digital economy. Like, if you're dining out in New York City anytime soon, you could check out an on chain app called Blackbird. Here's Coinbase's Jesse Pollack again.

[Maggie Lake]

They're building a new product on chain that lets restaurants build that more direct relationship with customers.

[Jesse Pollack]

Blackbird is kind of like a traditional dining rewards program. But by going on chain, the app gives restaurants a direct, transparent connection with every customer who's using it to make a reservation, check in, or pay for their meal.

[Maggie Lake]

So when a customer goes in, they just tap their phone. The restaurant now knows who they are. They, they can kind of customize the experience around them.

[Jesse Pollack]

This creates an easy to see history for every Blackbird customer at the restaurant. A personal profile that follows every interaction you have, which really matters to restaurants who thrive on building a community of local diners.

[Maggie Lake]

And then over time, as you show up more, you're actually building kind of who you are, what you love, which you can then choose to also take to other restaurants, which means you're going to have a more intimate experience at every next restaurant that you show up at. There's now hundreds of restaurants in New York City that are using this platform to make it so that they can have more direct relationship with their customers.

[Jesse Pollack]

Companies like Blackbird and Doodles are trailblazers today. But as more businesses create closer relationships with their customers by going on chain, these kinds of apps could become the new normal.

[Maggie Lake]

And so what I think we're starting to see right now is almost this exponential ramp where people are seeing, whoa, this thing is new and it might look small right now, but if I opt into it, I can live a better life for my small business, for my music, for my art, for my day to day living as a consumer in the American or global economy. And I think as more people see that, we'll kind of see this transformation where the world shifts from online to on chain. And it won't happen overnight, but it will accelerate faster and faster and faster until the entire world's on chain.

[Jesse Pollack]

In 18th century England, publishers did everything they could to maintain control and profit off authors original works. These guys were classic gatekeepers, setting the rules for how ideas and voices could be heard. Centuries later, we're still living with that model. But every time a prolific writer or a local business or any of us goes on chain, we could be ushering in a new era in history where there's no gate, no wall that keeps creators from having control over their work, earning money from their fans, and growing with the community that matters most to them. Thank you to Adrian Johns, Jesse Pollack and Julian Hogan. This is Evolving Money, a podcast from Coinbase and Bloomberg Media Studios. If you like what you hear, subscribe and leave us a review. I'm Maggie Lake. Thanks for listening.