As the song proclaims, the times they are a-changin.
We are watching a technological marvel happening before our eyes. The shift that is taking place is massive. Here we are seeing software driving disruption, a great deal which we discuss in these articles.
One of the biggest innovations is the next generation of the Internet. This is a logical progression of the medium that completely changed the world. At its core is a different ownership structure that will make data free flowing. This is the major hindrance to the present configuration. Innovation was stifled due to the fact that everything became centralized.
YouTube was one of the major disrupters in the generation. The impact upon the broadcast and video industry is unfathomable. It set in motion a wave of disruption that is not yet completed.
That said, it appears that YouTube is now the target.
It is hard to envision behemoths being toppled. For whatever reason, we believe these entities will go on forever. This was probably compounded by the "too big to fail" mindset that has infected the world over the last couple decades.
Nevertheless, history shows us that even the biggest can fall. YouTube is no exception and we can see things starting to transition right before our eyes.
Before going any further, let us be clear: we are not making the case YouTube is going to vanish anytime soon. It is not. The influence, however, is already starting to decline.
This is something that will continue.
Here is a headline from Business Insider:
The article explores how YouTube is becoming extremely challenging to navigate if one is a content creator. The AI generation is starting to hinder the ability to earn on the platform. It goes through a few of the larger creators who cashed out by selling their channels. Basically, the theory is that YouTube is going to be a place for mega-content creators and bots.
This is no a forecast that is unrealistic. We already see the shift in that direction. The percentage of people who are making money on YouTube, as a percentage of the accounts, is minimal.
Here is the Web 3.0 opportunity although most do not realize it.
This is not something that happened overnight.
TikTok was the first platform to really fire a warning shot. The emergence of shorts caught Google on its heels. Over the last decade, this alternate platform started to pull eyeballs away. This led to similar features show up on Facebook and Twitter (X).
What YouTube lost was the moat. We are rapidly moving towards a time when there are plenty of alternatives, especially for the longer form content.
Many are pointing to Rumble as the replacement. While this platform has done exceptional, it is really a mirror image of YouTube. The only difference is who is running the show.
Hence the dilemma all these Web 2.0 companies find themselves in. They simply cannot get away from the structure that is in place. That means, in my estimation, they are going to keep fighting over a declining number of users.
In this regard, there will be one or two platforms that end up milking from the rest. No longer are we seeing the old segmentation of video, long form, microblogging, and social activity. Basically, all platforms are going to provide similar services.
That means the winner, will be the ones that bring differential to the table.
Web 3.0 doesn't deal in this mess.
The bottom line for all content creators, no matter which Web 2.0 platform we use as an example, is they own nothing. There is no ownership of the content, data, or platform. Nothing is granted by using the service. While income might be derived, that is the extent of it.
As we stated in a number of other articles, Web 3.0 offers a completely different ownership structure. When one engages with a Web 3.0 platform, there is the ability to have stake in it. Depending upon the tokenomics of that Network, one can directly benefit financially from the growth.
This is not the case in Web 2.0.
So why does YouTube decline help Web 3.0?
This has to do with something very basic.
To start, we are dealing with the altering of habits. Humans are repetitive creatures. One of the hardest things to do online is to get people to switch where they are doing things. It is why Web 3.0 has such a challenge. Even those who talk about Web 3.0 and are supposedly involved in it are spending most of their time on Web 2.0 platforms. Their engagement is almost non-existent on Web 3.0.
The other piece is the network effects.
Here is another topic we have gone into great detail with. The key is the multiplier effect, as spelled out in Metcalfe's and Reed's Laws. They both show how each additional node to a network has a greater than a 1 impact. These stems from the basic network effects derived from the connections that can be established.
Here is the crux of the matter for YouTube: it works in reverse also.
Each lost user has a greater than one impact. This is true whether the person moves to Web 3.0 or Rumble. Each video appearing elsewhere has the potential to garner attention. That is time away from YouTube. This is no different than what happened to broadcast television and the hours of viewing that YouTube captured.
History repeating itself. The difference is the disruptor is now potentially the disrupted.
Once habits break and network effects start to appear elsewhere, things tend to snowball.
Ultimately, my view is that we end up seeing fragmentation as the basis of the next generation Internet.
Web 3.0 is going to bring tribalism to the forefront, something that seems natural for humans. We are not going to be all on the same platforms as we saw with the silos that became commonplace on Web 2.0.
What this means is networks are going to offer their own content, with their own data. Creators are going to be drawn to certain communities based upon characteristics that align with what they seek. Compensation will be available in many different forms, something that is likely to factor in the decision of where to "set up shop".
networks are going to be abundant. There will be no moats in the digital world. That means people are free to move wherever they desire.
Of course, this looks problematic from the eyes of companies. We have to remember, these networks are not corporate owned. Through tokenization, the ownership is distributed among the coin holders. This could also be true of the digital platforms that are build on TOP of these networks.
The most successful networks are going to be those that offer the services that retain people. When people can switch without barriers, it is vital the community provide what other members need. Of course, this translates into opportunity for those who are paying attention.
In short, if the network is lacking in something, fill the void.
This fragmentation means that platforms like YouTube are going to decline unless they radically change. I fail to see how they can compete with the structure of Web 3.0. That said, there is still the opportunity for a decade or more of profitable activity if they cannibalize the other platforms.
Will YouTube do this? That is anyone's guess.
The challenge is that, as more people find new homes, they are facing a decline. This is a game that is played in minutes. Each time someone watches a video that is not on YouTube, that is another "paper cut".
For now, YouTube is a powerful force.
One advantage it has is an enormous library of content that was uploaded over the last couple decades. This is similar to the position major movie studios find themselves in. The fact that a Warner Bros have almost 100 years worth of movies is something that has value in the marketplace.
However, as with that industry, we are seeing a massive shift. Technology companies are starting to enter the broadcasting realm, something that is having an effect.
Web 3.0 is the epitome of technology. There is nothing non-technical about it. This means that, as it expands, the ability to disrupt grows at an exponential pace. When we couple this with open source, the situation starts to compound.
At some point, it will be too much for even a behemoth like YouTube to fend off.
The times they are a-changin'.
