To clarify why content material creators proceed to lose by the hands of distributors/platforms, it’s useful to know 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 folks can be far lower than half as invaluable as one which allowed you to name all your folks.
The community results of a platform are extra sophisticated as a result of every part 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 could 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’s also good for content material creators, as a result of extra customers will work together with content material they don’t should pay for. It may be a virtuous cycle.
Nonetheless, 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 vital mass of customers, it could begin squeezing content material creators. Most individuals can’t afford to work without cost, so that they stop creating. How, then, does the tech platform proceed to develop? Typically by sending customers to lower-quality content material that’s free or nearly free to provide. For instance, songs seemingly created by A.I. are apparently being uploaded to Spotify and really helpful to listeners. And naturally, the platform might merely serve irrelevant, intrusive, privacy-invading adverts and even promote their customers’ information.
Let’s recall what Spotify did to the music trade. 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 thousands and thousands of songs from round $10 for a downloaded album, $13 for a compact disc and $24 for a vinyl file a decade in the past. The consequence? Many would-be musicians can not afford to pursue their artwork. That’s the reason, as of 2022, the marketplace for new music is shrinking; the expansion out there is coming from previous songs.