It is now almost two years since the COVID-19 pandemic first spread like wildfire worldwide, to devastating and unprecedented effect. While the human cost of the pandemic has been incalculable, the damage it has done to a wide range of industries can be quantified – and the numbers involved are truly eye-watering. With people spending large parts of 2020-21 locked inside their homes, the hospitality industry was devastated: by June 2021, the UK hospitality industry had suffered £100billion in unrealised sales. The tourism industry has been similarly affected: international tourist arrivals declined 73% in 2020, with an estimated $2trillion in lost revenue in 2021. 

However, for some industries, the outlook has not been so bleak. While most of us have been eating out and travelling abroad far less, we’ve spent far more time looking at screens of all shapes and sizes. When it came to both social interaction and recreation and remote working, of course – digital devices were our lifelines through the pandemic. They helped us stay connected, informed, and entertained in a world that seemed to be spinning out of control at times. 

As a result, screen time soared. A report by WARC found that digital consumption increased by 30% during the pandemic. The increase was particularly stark among young people – the average daily screen time for US adolescents doubled to eight hours. In recent years, social media, suffering from negative media reports and declining usage, saw its fortunes restored somewhat with increased use and engagement.

This increase in digital consumption has had clear economic consequences. In particular, it has been a major boost for the creator economy, the vibrant and rapidly growing industry built on the work of some 50 million content creators across a range of digital platforms. From gamers streaming on Twitch to teens lip-syncing on TikTok, from vloggers on YouTube to influencers on Instagram, much of the content sustaining our growing screen time relies on the work of this amorphous, ever-growing group of digital creatives.

As you might expect, the value of the creator market has grown correspondingly during the pandemic. With the market size now estimated at $100billion, and a further $800million invested in creator economy start-ups since late 2020, you might expect that content creators are reaping the rewards of their increasingly important role in how we spend our free time.

But you’d be wrong. In fact, though a small number of creators can reap lucrative incomes from their activities, many are not able to make a livable income from their work despite significant followings. But, just as importantly, creators are often required to sacrifice the freedom to make the kind of content they want to make to ensure they can reach their audience.

This is because the creator economy was built on a small number of mass-scale platforms – with Instagram and YouTube key amongst them – owned and operated by some of the largest companies in history. These companies, and the platforms they own, continue to set the terms for the content that creators produce and share and the revenue they earn from doing so. And the focus of these companies is not freedom of expression or encouraging participation; their focus is maximising revenue.

Nowhere is that more evident than in continual – and ongoing – battles over YouTube demonetisation.

The Web 2.0 business model

YouTube operates according to the same fundamental business model pioneered by its parent company Google in 2001 and adopted by Facebook toward the end of the decade. In each case, a free service is provided in exchange for users being served targeted ads. This targeting is rendered ultra-specific and pinpoint-accurate by the data collected on users as they use the service – as they make Google searches, for instance, or navigate pages on Facebook. 

This strategy has made Google and Facebook the unquestioned giants of digital advertising. Google has a 29% share of the digital ad market, with Facebook behind them at 24%; the third-placed company, Alibaba, has a mere 9%. The result: Google’s parent company Alphabet generated almost $183 billion in 2020, with 80% coming from advertising. Facebook, meanwhile, owes a staggering 98% of its revenue to ads.

YouTube follows almost the exact same model. Users can navigate to the website or use the mobile app free of charge, watching as many videos as they like. (YouTube has begun to offer rental and purchase options for more traditional media content such as films or TV shows, as well as premium subscriptions, but this remains marginal.) Sign up for a YouTube account (or rather, a Google account linked to YouTube), and you can post your own videos – again, as many as you like, with each being up to 12 hours in length.

The downside? Adverts, of course. For some videos, your viewing experience will be paused at certain intervals, and you’ll be served a short advert (or two) targeted to your interests. At other times, small pop-up ads will appear over the video itself. 

Even this has its positive side, however. Unlike platforms such as Instagram, YouTube allows creators to get a share of the revenue generated by these adverts through the YouTube Partner Program. 

As a result, YouTube has been a central platform for the creator economy. It has not only provided a breeding ground for major figures in the industry like PewDiePie and Logan Paul, but it has also sustained a vast number of creators across a range of different fields, allowing them to make money sharing their passion with the world.

But YouTube, more than any other platform, also reveals the dangers that creators face when dependent upon powerful, revenue-driven, and often secretive corporations to reach their audience. 

The “ADpocalypse” begins

The first glimmerings of danger for the still-nascent community of YouTube creators became visible in early 2017. A report in The Times in February highlighted that not only was YouTube awash with content promoting extremist groups but that advertisements for major companies often accompanied this. To illustrate the point, the article featured a screenshot of a video promoting a violent pro-fascist group accompanied by an advert for the British retailer Argos.

As a result of the ensuing outcry, YouTube began to give advertisers more control over the kinds of videos their ads would appear against and take more decisive steps to regulate the content posted on the site. The issue for YouTube was clear and was put in surprisingly revealing terms by the vice president of product development, Ariel Bardin: “there’s a difference between the free expression that lives on YouTube and the content that brands have told us they want to advertise against.”

YouTube found a simple solution to this problem: demonetisation. Or, as the creators themselves would begin to call it, the adpocalypse

Essentially, this term refers to a series of steps YouTube took – and continues to take – to determine which accounts are eligible to join the Partner Program (making them, as mentioned above, eligible to earn money from their videos) and which videos are suitable for featuring ads.

Unfortunately, these steps have been piecemeal, hard to follow, and often inscrutable for those they affect. For example, from the earliest days of the adpocalypse, creators complained about plummeting revenue with no clear indication from YouTube of whether their videos or even their whole channel had been demonetised – and if so, why. While appealing demonetisation was possible, the process itself could take months – which, for the often strained financial situation of smaller creators, could be fatal.

YouTube, however, was beset by further scandals – from an overwhelming surfeit of creepy videos targeted at kids to superstar vlogger Logan Paul uploading footage of a man who had recently hanged himself in Japan’s Aokigahara forest as part of his daily vlog. The choice between free expression and advertisers was, in the end, a straightforward one.

Demonetisation or decentralisation: A stark choice

Over the subsequent years, YouTube has continued to refine its monetisation policies, including how a channel becomes eligible for the Partner Program and what kinds of content can lead to demonetisation. And herein lies the fundamental problem. YouTube, not the creators, decide which videos can generate revenue – and which content, therefore, can be a viable source of income. 

These decisions are subject to change and often hard to understand. They are framed in highly ambiguous terms, such as the restrictions on videos that feature topics deemed not to be “advertiser-friendly”, including “sensitive events” and “controversial issues”. Lacking some clear definition of these terms, creators seeking to earn a living from the platform are encouraged to simply avoid anything that might be construed as “sensitive” or “controversial”.

And that’s setting aside the ever-obscure, continually adapting YouTube algorithm. Key to YouTube’s success – which is to say, its capacity to capture and keep ever-greater numbers of users on the platform for ever-longer periods – is its recommendation system. All videos are accompanied by a side panel of recommended videos tailored to users’ preferences – the kinds of videos they usually watch, the things they search for, etc. Appearing in the panel is vital for attracting new viewers to your channel and thus securing a stable income from the platform. Decoding and interpreting the algorithm’s process – the kinds of videos it chooses, their length and format, even the thumbnails to use – is vital to building an audience on YouTube.

The result? Creators seeking to avoid demonetisation and appeal to the algorithm make increasingly similar types of content and steer clear of issues that might fall foul of evolving policies over advertiser-friendliness. The average length of videos converges; simple, repetitive formats begin to take hold; specific topics largely disappear from the site.

Of course, there are alternatives. Creators seeking more creative freedom can simply opt out of the YouTube Partner Program and give up on making a living from their content – which, in many cases, means making less content, making it on a smaller scale, or not making it at all. Even if they do remain active, their videos will struggle to reach the top of the search results on the site, won’t appear in the recommendation panel, and may, in some cases, simply get flagged and taken down for content policy violations. They can try to find other channels for revenue – merchandise, for instance – but these are largely only tenable for channels that have already built a sizable audience. And this means, of course, channels following the rules up to this point.

For this reason, there are many industry observers for whom YouTube is a monument to the broken promises and misplaced hopes of the Web 2.0 era. What had initially been a vibrant, somewhat anarchic platform full of amateurs, hobbyists, obsessives, and weirdos sharing exciting, unpredictable content has mainly become a place for music videos and talk show clips, with only the blandest, safest, and most polished channels allowed to sustain themselves. All this is in the interest of the one thing that truly matters to YouTube and its parent company: keeping the advertisers happy.

YouTube, then, shows us the best and the worst of the creator economy at the start of 2022. And what it shows us more than anything else is that, unless creators themselves can exert control over the platforms they use, unless they can take ownership of their content and how it is monetised by themselves and others, the true potential of the creator economy will not be realised.

Thankfully, genuine alternatives are beginning to emerge at last.

The creator economy and Web 3.0

The pandemic era has seen a massive increase in digital media usage and the flourishing of alternative visions of how the web of the future might work. Under the name of Web 3.0, the technologies powering the cryptocurrency revolution have been envisioned as providing the foundation for an entirely new way of living in an increasingly online world. The much-discussed metaverse will potentially form part of this vision – though the existing big tech players are seeking to influence its development.

Unlike the Web 2.0 era, which centred on a few key platforms owned by powerful corporations and tailored mainly to their needs, Web 3.0 will mark a re-decentralisation of the web. That is, the web will be brought closer to the initial vision of an open, decentralised, and permissionless space with no single point of authority able to make decisions. This includes, for instance, decisions about what kinds of content are or are not appropriate to be shared. Blockchain technology is foundational for this vision as it supports a massively distributed, decentralised and secure way of achieving consensus.

But what does this mean for the creator economy? While specific implementations are in the early stages, the possibilities are enormous, and the benefits are clear to see. Blockchain protocols can establish clear and definitive ownership of digital assets, allowing creators to sell their work directly in the form of NFTs, as well as assert immutable royalty rights. This means that they won’t be dependent on the good graces of YouTube to decide whether their hard work deserves remuneration.

Perhaps more significantly, decentralised platforms built on the blockchain would allow participants to exert direct, democratic control over the platform itself – its rules and procedures, future developments, levels of moderation, and so on. This is achieved by using governance tokens tied to a particular platform. Such tokens will directly reward participants for their involvement and act as a way for them to exert control by giving them voting rights on major decisions.

Rather than YouTube unilaterally changing its terms of service to satisfy advertisers and randomly demonetising videos without explanation, a Web 3.0 platform would allow token holders – that is, those with direct investment in the platform – to make collective decisions that benefit everyone.

On this basis, Web 3.0 has the potential to preserve the undoubted benefits of the Web 2.0 era – without which the creator economy would be unthinkable – while removing some of its more problematic factors. Indeed, it has the potential to finally bring about the mass-scale participatory culture that early proponents of the social web imagined and which the tech giants have continually undermined.

You can support our decentralised solution

If this vision of an equitable, open, and decentralised creator economy is to become a reality, we need to build the tools to sustain it. And this is something that you can help to achieve! 

Cudos is preparing to launch the mainnet of its secure, sustainable, and user-friendly blockchain solution. View the live countdown here and get ready for the big day! Once the mainnet is live, developers will be able to begin building a range of decentralised applications on the blockchain – including decentralised content sharing solutions!

You can get involved right away by following the links below:

Lastly, if you are a CUDOS token holder, consider earning more by staking on our platform to help secure the Network and receive rewards in return. 

About Cudos

 The Cudos Network is a layer 1 blockchain and layer 2 computation and oracle network designed to ensure decentralised, permissionless access to high-performance computing at scale. It enables the scaling of computing resources to hundreds of thousands of nodes. Once bridged onto Ethereum, Algorand, Polkadot, and Cosmos, Cudos will enable scalable computational and layer-two oracles on all bridged blockchains.

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