To elucidate why content material creators proceed to lose by the hands of distributors/platforms, it’s useful to grasp the three mutually reinforcing networks that characterize most tech platforms.
A profitable tech “content material aggregation” platform has three networks: content material creators, customers and advertisers. Many networks have so-called optimistic externalities, which successfully imply that development builds extra development and value. A phone community that means that you can name solely half your pals could be far lower than half as invaluable as one which allowed you to name all your pals.
The community results of a platform are extra difficult as a result of every element reinforces the others. The extra content material, the extra customers; the extra customers, the extra content material, and so forth. As soon as the platform has sufficient content material to get sufficient customers, then it will probably additionally get advertisers. If the platform shares advertisers’ cash with the content material creators, extra content material will get created, which attracts extra customers, which attracts extra advertisers, and so forth. If the adverts are related, nonintrusive, and don’t invade one’s privateness, that’s good for customers, as a result of the advertisers are paying for the content material. It is usually good for content material creators, as a result of extra customers will work together with content material they don’t must pay for. It may be a virtuous cycle.
Nevertheless, when the platform extracts an excessive amount of and shares too little, it harms the remainder of the ecosystem. As soon as a tech platform has a essential mass of customers, it will probably begin squeezing content material creators. Most individuals can’t afford to work without spending a dime, so that they give up creating. How, then, does the tech platform proceed to develop? Usually by sending customers to lower-quality content material that’s free or nearly free to supply. For instance, songs seemingly created by A.I. are apparently being uploaded to Spotify and advisable to listeners. And naturally, the platform might merely serve irrelevant, intrusive, privacy-invading adverts and even promote their customers’ knowledge.
Let’s recall what Spotify did to the music business. Streaming royalties are a pittance in contrast with à la carte gross sales — the pricing mannequin modified to Spotify’s present $10.99 monthly for entry to tens of millions of songs from round $10 for a downloaded album, $13 for a compact disc and $24 for a vinyl report a decade in the past. The consequence? Many would-be musicians can’t afford to pursue their artwork. That’s the reason, as of 2022, the marketplace for new music is shrinking; the expansion available in the market is coming from previous songs.
