What will it take for Web 3.0 to become mainstream?
This is obviously a loaded question. However, we are starting to gain some insight into how things are unfolding. Like anything with technology, nothing operates in a vacuum. For that reason, being aware of what else is taking place can be a good indicator of how things are changing.
For a number of months we discussed the idea of media and how Web 3.0 is primed to disrupt this industry. Actually, we are seeing a lot taking place in the content creation world, most of it tied to artificial intelligence. We are undergoing a transition like none that went before.
This means the entertainment industry, in particular, is going to get obliterated.
It is what happens when technology enters a market. The lessons from history are clear here. Disruption is a powerful, and unforgiving force.
CVL Economics put out a report detailing its finding within the entertainment industry. It provides insight into what executives are thinking regarding the future.
This is the first wave of displacement.
What we have here is pretty straightforward stuff.
Technology, in this instances software, is providing an opportunity to reduce or eliminate costs. As it gets more powerful, the net it casts only gets wider. This is appealing to executives to who make their business division more profitable by putting out the same (or more) with less people.
We saw this happen 35 years ago with manufacturing. As robots entered our factories, humans were displaced. Output skyrocketed along with a decline in defects, enhancing the numbers for the corporations.
This is following a similar path except that it is the white collar jobs at risk.
Chatbots are the rage and for good reason. The ability for generative AI to start "creating" is improving each day. While it might not be up to human standards, give it time and we will see different results.
What we have is a case where the assistant will take over.
For the time being, it is likely that these tools will aid the workers. However, there will come a point where the ability is such that the humans are no longer needed.
The difference is, unlike the past, the speed which things are advancing.
So far, we are focusing upon what the existing firms are looking at doing. This is only the tip of the iceberg.
Disruption is widespread. When it enters an industry the fallout is massive. It not only affects the workers but also incumbent companies.
This brings up a particularly interesting challenge. Whereas, even with automation, few were going to get into the automobile manufacturing business, the same is not true for entertainment. The barriers to entry are much lower (and going down).
Generative AI is not a monopoly of larger firms. Think about how anyone, for around $20 per month, can access the latest OpenAi has to offer. The same is true for other media creation.
As the quality improves, we are likely to see different players starting to emerge. The major media companies no longer control the distribution channels. Now we are seeing advanced tools for content creation.
What we are about to witness is a disruption that was even bigger for this industry than the Internet. That altered how media was accessed.
Now we are watching one of the main barriers falling, the production studio. If anyone with a computer can essentially have one virtually, what does that mean for the industry?
I think we know the likely answer.
Of course, there is another layer to this.
So far this discussion is nothing more than Web 2.0 stuff. The business structure is no different than anything over the last couple hundred years.
These new firms will be owned by a few individuals, operating in isolation. At least this will be the first wave.
My expectation is the attention economy will eventually take over. Web 3.0 provides an interesting premise since we can see the formation of the network-state. Here is where things get completely upended.
Few have really delved into the concept of Producer-Consumer-Owner.
Here is where the second wave of disruption comes from. Essentially it boils down to who are you catering to? What is the target audience?
While the present focus is anyone in a target demo, this will not be Web 3.0. People will be focused upon their Network. What we have here is a built in audience. The eyeballs are there, not only as consumers but also owners.
Therefore, while they might not have stake in the company producing the content, they could in the network it is integrated with. Ultimately, we could see platforms with these ecosystems being, at least in part, media companies.
Naturally, with the expanding power of the tools available, this means that anyone can start to generate content that can attract attention. While we might not see the next Disney or MGM, there sheer volume is enough to pull attention from the traditional media entities.
Most understand this concept when it comes to money. Stop spending at a certain place and the company feels it. Right now, attention is the new currency. Where are your eyeballs? That has value and is being monetized.
The question is whether any part of the monetization is finding into the users pockets.
Here is where the incentive structure is much different. When people start to focus upon their network, and the services created and offered there, it becomes difficult to pull people away. Traditional entities simply cannot compete because the equity incentive is not there.
It can be with Web 3.0.
Entertainment is a wide open field. It has few protections other than the content creation capabilities. Over time, we are seeing this altered. Generative AI is really going to disrupt things and likely sooner than many envision.
Executives at the companies already have an idea of what is coming. Of course, they are looking to profit from this. What they might be missing is they are the prey also.
