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  • #28: Marketplaces Are Robbing Creators of Royalties

#28: Marketplaces Are Robbing Creators of Royalties

Also: Converting Fame to IPO Is Not Easy

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One of the big promises of NFTs was the revenue model that provided the creator with a cut of resale price whenever their piece was traded. Unfortunately, that’s not the case anymore, as OpenSea - the biggest NFT marketplace by user base - announced a plan to transition from enforcing royalty fees to making them optional tips in an effort to remain competitive against rivals. Investor Mark Cuban, and largest NFT project Yuga Labs are not happy.

Just two weeks ago, a new crypto social network friend.tech, has blown up in crypto circles, and started attracting big-name crypto influencers, NBA players, and OnlyFans creators. The app lets users tokenize themselves and sell “shares,” now dubbed “keys,” to fans and followers, earning revenue depending on the creator’s popularity. While the hype appears to have been short-lived (the app’s daily revenues have dropped by over 95% since August peak), some acknowledge the potential of its incentive model.

Typically, a successful creator with millions of followers and millions of dollars of ad revenue looks to turn their devoted fan base into a business because: “even the most successful content creator lives at the mercy of social media company algorithms, moderators and the vicissitudes of digital advertising. Whoever owns the platform sets the rules.” Turns out swapping virtual fame for the real world is a bit tricky, as it requires an operator skillset, dealing with lawsuits and need to build brand outside of social media

Social media has become less social as they turned into curated platforms with meticulously planned content. Users are tired, post less frequently, and gravitate toward private posting and closed groups, seeking less pressure, more authenticity, and more closed, niche communities.

Sex workers in the US have long faced financial discrimination from financial institutions that fear reputational damage and liability for illicit activity. Turning to crypto initially had privacy benefits, but now workers are encountering issues converting it to cash because crypto exchanges are also dumping them.

The LA-based media company, with unregistered securities offering in their 2021 NFT launch and raising $30M. SEC interpreted the claims of future growth and project development as investment contracts, and forced Impact Theory to settle for $6.1M, refund money to “injured investors”, and destroy all the remaining NFTs it possesses. While unfortunate, this may help accelerate non-financial use cases of NFTs…

  • Crocs and Doodles collection announced a footwear collaboration.

  • McDonald's Singapore is introducing Grimace digital collectible.

  • Shopify integrated Solana Pay plug-in for stablecoin payments.

  • F1 Dutch Grand Prix offered ticket-linked digital collectibles to attendees.

  • Tomorrowland earned $2.2M from NFTs linked to festival utility.

  • The Weeknd global tour offers fans Souvenir NFTs.

  • Donald Trump NFTs spiked following a Wednesday interview.

  • Hawaii artist is fundraising for Maui with open-mint digital collectibles.

  • Seaport launched a digital collectible scavenger hunt in Lower Manhattan.

  • OnlyFans’ profitability proves the creator economy boom was real enough.

Averaged across all artist sizes, super listeners make up 2% of an artist’s monthly listeners, but account for over 18% of monthly streams. “Super” listener, indeed.

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Author Bio

Kuba Szewczyk is a Director of Strategy & Ops at ConsenSys, helping build NFT tools for creators and brands. He previously worked at Bain & Co. Digital Assets and earned Harvard MBA.

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