Perhaps you've heard the term "attention economy." It refers to a business model in which the primary purpose of marketing content, such as social media news feeds, is to expand the number of hours users spend engaged with a specific product or service as noise increases within a platform.
Most of today's most popular social media channels, including Facebook, Twitter, Instagram, Snapchat, and YouTube, operate according to this archetype because they directly translate the time users spend with their product into revenue. Most of this revenue goes directly into the pockets of the aforementioned social media giants. Unfortunately, only a fraction of the profit from these platforms ends up in the pockets of those who deserve it the most – the creators of the content.
This has worked out well for Facebook, which also owns Instagram and WhatsApp, and Google, which owns YouTube. The two major tech companies recently posted $12.78 billion and $22.4 billion, respectively, for their ad revenue in the fourth-quarter of 2017. Twitter just achieved GAAP profitability for the very first time. Snap Inc., though still struggling to bring its revenue up to par with its expenses, still generated $286 million this past quarter.
The biggest losers in all of this are the users. Instead of these platforms being user-centric, the users and their content have become the products. These social media giants are ad-centric and care only about the amount they could charge advertisers for their next feature. In fact, they are making it even more difficult for content creators and micro-influencers to monetize than it already was before. Last month, for example, YouTube raised their Partners Program monetization requirements from 10,000 lifetime views to 4,000 hours (240,000 minutes) of watch time within the past 12 months, and a minimum of 1,000 subscribers. Small YouTubers and content providers are feeling the squeeze of demonetization.
The quest for increased ad revenue and time spent in-app has also driven social media giants to reward users for eyeballs over quality content, and created an attention economy that encourages meaningless context. Famed internet personality, Logan Paul, for instance, posted a video of a hanging body in a suicide forest that rose to the top trending video on YouTube. YouTube reacted by first demonetizing that single video, and then Logan Paul's entire channel -- but only after receiving public pressure and worldwide outrage. The current system is clearly dysfunctional.
At the World Economic Forum in Davos this past month, tech leaders under public and political heat to reign in on their attention economy model, kept referencing the need for further governmental regulation. This is undoubtedly because they are trying to protect themselves and continue their manipulative and unfair attention-economy business practices, which are designed to force users to unwillingly give up their autonomy. Other industry tech leaders questioned the illegitimate system and demanded for more fair regulations for the sake of consumers from these ruling social media companies at the meeting in Davos:
"There is some regulation, but there probably will have to be more," said Marc Benioff, the founder of Salesforce.com.
"Social media companies exploit the social environment," said billionaire investor George Soros. "Facebook and Google effectively control over half of all internet advertising revenue...They exploit the data they control, bundle the services they offer and use discriminatory pricing to keep for themselves more of the benefits that otherwise they would have to share with consumers."
Davos participants appeared to single out tech companies. However, the truth is, profiting off the backs of the smaller and weaker is nothing new. Taking advantage of positions of power is par for the course for monopolistic organizations in general. It's a problem that arises when one entity gets too big and has too much influence when it develops into a gravitational force field that overpowers everything in its path. It's a problem that arises due to centralization.
If centralization is the problem, it's not regulation that will cut to the heart of the issues and fix what's broken; it's decentralization. Decentralization knocks down the walls protecting the few and creates a more open, global environment. Blockchain technology, utilizing secure and linked ledgers, helps replace the typical central authority, recording and validating information (and/or transactions) in a decentralized manner.
Blockchain technology is revolutionizing a variety of industries. Most prominently, how Bitcoin has changed the way society looks at money and has helped citizens of struggling nations (e.g. Venezuela) retain their wealth in the face of sharp inflation due to their local currencies.
Blockchain ledgers can be used for many other things, including keeping track of health records or education credentials, so that no matter what happens to a refugee or where they end up in the world, they can still access their medical files or get a job using their decentralized record of education and experience.
In Davos, Soros himself mentioned how he is harnessing the power of blockchain to help refugees, saying, "we use it actually in helping migrants to communicate with their families and to keep their money safe and to carry it with them."
Decentralization can also solve the current structure of the attention economy and fix the exploitative business models currently promulgated by social media companies, which at the end of the day, hurts users and content creators the most.
Synereo is one company that is working on a blockchain-based social network to solve the present models. Synereo's first product, WildSpark, operates as a meta-layer on top of existing social media and publishing platforms. Through WildSpark, creators can be rewarded with AMP, the platform's digital token issued by Synereo. Those who share content, better known as curators, get rewarded with AMP, as well. With WildSpark and its incentive system through AMP, there is no central body serving as an intermediary that can take a significant percentage of the profit generated from content. Earnings are exactly in accordance with one's contributions to the community and WildSpark economy, and the community polices itself. For example, a controversial video like Logan Paul's would not gain traction and trend unless the community allowed it to, since there would be no central authority pushing to approve distribution. Rather a decision would be reached by community consensus.
Additionally, as a digital currency, AMP has no borders and easily serves as a currency to connect content creators, curators and users around the world.
For these reasons, Synereo calls WildSpark and its AMP an integral part of the "Liberated Attention Economy."
Undoubtedly, cryptocurrencies are taking the world by storm. In the past 12 months, the total cryptocurrency market cap has gone from approximately $19 billion to $430 billion. In 2017, Bitcoin's value rose around 2000 percent, and Ethereum and Ripple skyrocketed by nearly five times that amount. In the past year, AMP has gone from $0.047 to $0.35 -- more than 600 percent.
The greater blockchain technology sector is also booming. A market trends report from Wintergreen Research called "Blockchain: Market Shares, Strategies, and Forecasts, Worldwide 2018-2024," revealed that the global market for blockchain reached $708 million in 2017 and is expected to reach $60.7 billion by 2024.
Blockchain technology has the power to change so many aspects of our lives, from business, banking and finance, to healthcare delivery, education and digital entertainment, including staying connected on social media. Synereo's WildSpark is just the beginning. The revolution towards decentralization, the Liberated Attention Economy, and the entire liberated economy in general across all sectors, has only just begun.
About the Author
Dor Konforty, CEO and Founder of Synereo, creator of decentralized attention-economy solutions and the company behind WildSpark, a blockchain-based content monetization and distribution platform. Dor is an expert on decentralized organizational principles with many years of experience in the industry. He holds a master's degree in neurobiology from Tel-Aviv University's interdisciplinary brain research program. His background includes the working of neural networks and knows what makes distributed economies flow, from neurotransmitters to cryptocurrencies. Dor is also a graduate of the Israeli Air Force IT unit.