Creator Economy - Are NFTs the Future of Subscriptions?
Dear subscribers, Many creators and brands rely on subscriptions to make a living. But traditional subscriptions are built on platforms that could change rates and policies at any time. I believe that we’ll see a rapid shift to NFT memberships in the near future. This shift is a massive opportunity for web3 companies. Let’s explore:
Today’s post is brought to you by…Unlock Protocol Unlock makes it easy for creators and brands to start an NFT membership program with no code. Unlock NFTs can be applied to token-gating, content paywalls, newsletters, software licenses, and even the IRL event ticketing. Why NFTs are better than traditional subscriptionsIn the creator demand curve, I wrote about how creators and brands can maximize their earnings by targeting different fan willingness to pay:
But I now believe that NFT memberships are better than traditional subscriptions. Here’s why: 1. Creators and their communities own the NFTImagine that you’re a live streamer on Twitch. With traditional subscriptions, Twitch sets your subscription price and share of earnings. If Twitch decides to cut creator payouts, there’s no easy way for you to move your community to another platform. With NFT memberships, you own the NFTs with your community. No platform gets to dictate how you interact with your fans. 2. Creators can personalize the NFT membershipWith traditional subscriptions, the benefits and terms are often pre-set. On Twitch, for example, you can only offer perks like custom emotes to your paid subscribers. With NFT memberships, you can personalize your NFTs’:
Because NFTs are programmable, what you offer is only limited by your creativity:
3. Creators and their communities share in the upsideWith traditional subscriptions, fans who have supported a creator since the beginning don’t see any upside as the creator becomes more popular. With NFT memberships, both creators and fans can share in the upside as the NFT becomes more valuable with the community. Drawbacks of NFT membershipsAs the saying goes, “With great power comes great responsibility.” Since NFT memberships give creators and communities control over their outcome, it’s important to be aware of a few common pitfalls: 1. Traders could flip your NFTs and ruin the vibe of your community.Traders could come into your community and snatch up all the NFTs without giving your real fans a chance to share in the upside at all. To avoid this, you could offer whitelist spots to fans and set parameters so that no single person can buy too many NFTs at once. 2. Fans can get priced out of the NFT membership.If things go well, your NFT collection will increase in value as your community grows. As a result, new fans might get priced out (not to mention the gas fees!). To avoid this, you could issue subsequent NFTs at lower prices for fans who can’t afford the OG collection. You could also use L2 and other L1 chains to avoid gas. 3. Fans might react negatively to NFTs.Unfortunately, many creators and fans have a bad impression of NFTs due to scams and people looking to make a quick buck. As a result, you might alienate some fans if you pursue NFT memberships without clearly communicating the value prop. Fans can see through your true intentions so ask yourself this question:
How this could work in practiceLet’s imagine again that you’re a Twitch streamer:
To summarize, I think NFT memberships are the future of subscriptions because they let fans share in the upside and let creators target multiple fan willingness to pay: I think this is one of the most exciting trends in web3. If you’re building a solution for NFT memberships, I’d love to get in touch. If you liked this post from Creator Economy by Peter Yang, why not share it? |
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