We're now living in an era where having 100 true fans is far more valuable than having 10,000 sets of eyes.
For most of the internet's history, the way to monetize it was 1) steer as much traffic as possible to your website 2) find a company that will pay for an ad on that website and 3) make sure as many sets of eyes as possible see that ad. It was purely a game of quantity. Overall engagement with website visitors was low since the goal for the company was only to generate as many micro-interactions with these visitors as possible to continue supporting ad sales. Having 10,000 sets of eyes was more valuable than having 100 true fans.
But America's digital economy has experienced a paradigm shift. Exploitive data mining and brokering have gone out of fashion, which hurts the effectiveness of targeted advertising. Services like Netflix and Spotify have taught us not to tolerate an intrusive number of ads in our content and have gotten us comfortable with the idea of digital subscription services. Companies struggling to find additional earnings growth like Apple and Amazon are becoming more and more attracted to the idea of recurring revenue from users. And sites like TikTok and YouTube are generating value not through a series of micro-interactions but through ensuring they have the sustained attention of their core users. In other words, companies and creators are being valued not by the quantity of users they can drive to their site but in the quality of users they can attract and how deep within the ecosystem those users want to embed themselves.
All of this is creating an environment where I think small creators and companies will find it much easier to make their livelihood by finding 100 true fans instead of 10,000 sets of eyes. This feels like "Monetization 2.0" of the internet in many ways where rather than just indiscriminately monetizing a user's presence, we begin monetizing a user's engagement.
Imagine you're a YouTube piano instructor. Monetization 1.0 of the internet would have been publishing a smorgesborg of half-decent video tutorials, all sponsored by some JV music notation app that is desperate for attention and advertises before every video. These videos may all get a significant number of views, but the monetization possibilities are pretty limited given that your income is completely tied to that ad's performance. Now imagine instead of doing this you start a monthly membership where for $5/month customers can request video tutorials of songs they want to learn and get access to exclusive Twitch streams where you answer any questions from the group about learning to play piano. Not only is that a better experience for the customer, but it's a more predictable revenue source for the creator and an opportunity to start building a more dedicated audience.
Monetizing engagement over presence feels like such a win for everyone involved, and even if it will probably lead to fewer internet services being offering for free, I think it's a great step in the right direction towards turning the internet into an overall less exploitative place to exist.
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