managemnet company strategy managemanet Web3 Could Change the Business Model of Creative Work

Web3 Could Change the Business Model of Creative Work

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For most of the industrial age, technology has acted as a tailwind for creators, powering an age of mass culture that supported a professional class of working artists. However, more recently, the rise of digital technology — specifically, the internet and AI — has become a source of economic dislocation.

Web1, the so-called “read web,” was a digital printing press that democratized access to information, but it also commoditized art and music and undermined creators’ rights as their IP got laundered in the web’s swirling washing machine of content.

Web2, the “read-write web,” made it easier to publish content, share ideas and access a broader audience (i.e., “write” to the internet) but it also confined creators to tightly run platforms they did not trust or control and where they lacked transparency into the economic impact of their work. Either that or risk the wilderness of the web where their creations could be copied without recourse. Digital artists had no easy way to monetize their creations and could not benefit when works were resold.

The platforms that control content distribution have grown richer and more powerful, with precious little of that windfall trickling down to creators. Consider the strikes of the Writers Guild of America (WGA) and the Screen Actors Guild–American Federation of Television and Radio Artists (SAG–AFTRA). Streaming has already shortened television seasons, shrunk writers’ rooms, and eroded artists’ traditional residual revenues; and generative AI and 3D modeling give companies more tools for further minimizing their use of writers and actors.

By contrast, Web3 — the read-write-own web — offers new tools to earn and own assets, build wealth, and wrestle back control from powerful platforms and intermediaries. Web3 could simplify how creators fund their ventures by crowdsourcing new titles directly from their fans. It could offer new ways to earn a living, not just on the first sale of a work of art but in perpetuity thanks to programmatic royalty streams paid via smart contracts, self-executing code that can move and store money. In other words, it might offer a new model for creative work.

AI: Risk or Opportunity?

Now, new technologies — namely, generative AI — pose new challenges for composers, screenwriters, visual artists, and other creative workers. It is too early to say whether AI will be all bad for all of them; it may expanding the ranks of professional artists or grow the market for culture and creating opportunities for humans to co-create or collaborate with AI on an equal footing. But it could also starkly devalue the work of copywriters, composers, and artists, and relegate these workers to supporting roles, such as polishing scripts or adding some depth of feeling to digitally rendered art. Cezanne said, “A work of art which did not begin in emotion is not art,” but plenty of studio executives see AI as a way to cut costs.

By analyzing hundreds of thousands of scripts against their viewership patterns over time, AI will get better at mimicking the stickiest and most bingeworthy of screenwriters’ styles, characters, and plots, not just to extend the arcs of existing stories but to synthesize all-new series and recommend the optimal cast or mix of character types. Ditto on the virtual replication of actors, with tools like FaceSwap already in use to de-age stars like Harrison Ford for his latest portrayal of Indiana Jones. But such big names likely consent to such innovations on their own terms. As Vox put it, “If people don’t lock down control of their digital twins, then nothing else matters.”

Oscar winning director Stephen Soderbergh told the Hollywood Reporter that, more than AI or visual effects, what keeps him up at night is the opacity of streaming data: He speculates that the studios are doing really well and don’t want to share the wealth, or else really poorly and don’t want their stocks to tank.

Artists hoped that the internet would help to disintermediate gatekeepers and middlemen, and change power dynamics in creative industries, but instead it added new intermediaries like streamers and platforms that distanced artists from their fans and obfuscated their economic impact. We need something different.

Culture Needs a New Business Model

If technology is upending the longstanding business model of creative industries, it’s also offering opportunities to establish a new one that can work better for creative workers.

Web3 technologies can simplify how creators track the usage of their IP and to monetize it, ensuring they get paid promptly and fairly for their work. For instance, Web3 technologies could allow artists to grow and perhaps even thrive along with AI, rather than suffer at its expense. For example, smart contracts can create avenues for artists to be compensated when their work is used to train AI like a large language model.

Web3 adds an economic layer and a rights layer to the Internet stack, where users can not only track the provenance of information and intellectual property but also protect, manage, and monetize these digital assets themselves with transparency peer to peer. These innovations can also change how creative ventures are funded, removing industry gatekeepers and amplifying underrepresented voices. In the Philippines, independent game studios are selling NFTs of in-game assets to gamers directly to fund new titles, disintermediating big studios and traditional financial backers.

For Jules Urbach, CEO of cloud graphics company OTOY, Web3 is fit for this purpose. OTOY’s flagship product, OctaneRender, is what’s known as an “unbiased, spatially correct graphics processing unit (GPU) render engine,” which is the industry’s way of describing powerful software that can render more lifelike images and video than what came before. Marvel Studios used OctaneRender in the opening of Ant-Man and the Wasp, according to Urbach.

Using the cloud, OTOY is able to harness dozens — and sometimes hundreds — of GPUs at a time in its network to break down projects into smaller parts.

By breaking up tasks, OTOY helps democratize the compute-intensive process of rendering, allowing artists to render in a couple of minutes what used to take hours on expensive hardware setups. Most important, anything created in the render network creates a hash on a blockchain, for the verifiable provenance essential to managing artists’ IP rights and moving digital goods from platform to platform. With such capabilities, artist guilds could create a set of smart contract templates for their members to use in managing such life-like renderings of themselves — their digital twins — and collect privatized data on industry usage that would give them bargaining power in future negotiations. The contracts could represent the artist guilds’ negotiated terms, plus whatever the individual artists or their agents have negotiated.

From Hollywood to Everywhere

This technology also offers artists ways to flip the traditional top-down model where studios and streamers try to control everything from IP to distribution. Hollywood screenwriter Jessie Nickson-Lopez has brought some of modern TV’s most indelible characters to life. As a founding member of the writing team on Stranger Things, she developed the story line for the character Eleven. Recently, as cofounder of Web3 startup MV3, she launched a collection of 6,500 non-fungible tokens (NFTs) of different characters, the building blocks for what will be a richly rendered narrative “universe,” originally created by Nickson-Lopez and her team. Set in the “dystopian cyberpunk society” of 2081, after the “climate has gone to hell,” MV3 focuses on “a ragtag group of idealistic” rebels struggling to “take power from the corporation that owns the city.” NFT owners will participate in the IP, have a say in their character’s arc, and even co-create the story with the MV3 team. These different character assets could ultimately appear in film, TV, and other storytelling media. They could be playable characters in videogames or avatars in the metaverse.

Knowing that fans will support a project is key for firing up the Hollywood machine to spend $100 million or more on a film or TV show. Nickson-Lopez said, “So we reverse-engineered it, and I created the world of Eluna City and the characters that reside in it.” Though Nickson-Lopez architected this world and crafted story lines for main characters, MV3 will not decide the direction of the story. “For me, what’s been most exciting is seeing how much creativity we’re inspiring in people who have never created before but are consumers of dystopian worlds and of fiction. There’s this hunger to play. Our fans are our community and our co-creators. Because they’re invested in the world and in the characters, they’re really excited to build it up with us.”

MV3 inverts the Hollywood model. “As my lawyers say, ‘It’s like you’re ripping off pieces of value and just giving it to people.’ And we’re like, ‘Exactly! That’s exactly what we’re doing.’” Recently, the founders handed control day-to-day control of the MV3 universe to the community.

. . .

Ultimately, projects like OctaneRender and MV3 will work because they engage their communities not only in the economic upside but also in the governance. Handing over control and economics to fans is antithetical to the Hollywood model, and Nickson-Lopez recognizes that. Engaging people in the creative process, for love of the experience and not just for money, is what clearly drives these creators and gives their projects purpose and meaning.

Technology tools and human capital are more distributed than ever. If Web1 and Web2 democratized access to information and made it easier to collaborate online, Web3 equips creators with a new toolkit to build real wealth from their work, on a globally level playing field. As the saying goes, the future is not to be predicted; it is to be achieved. For cultural industries and much else, Web3 can help us do it.

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