Paywalls are Stupid

Preston Brown

9 months ago by prestonbrown

A trend I’m noticing in this BSV space is a reliance on paywalls. Simply put, paywalls are small-brain. A paywall is a zero-sum business offering. It does not increase the size of the economic pie, rather, it just makes one more efficient at cutting out their slice. It’s not evil in the way some would describe economic exploitation - it’s just stupid. A better, more contrived clickbait title would be “An Affront to Creative Capitalism.” Other ideologies are equally focused on how to divvy up the economic pie, but capitalism focuses on growing it. So a business offering that mooches its slice from the existing pie instead of fabricating new pieces on its own is soy and beta, and whatever other negative meme-words exist.

Let’s take a look at one of the most popular paywalled sites: Streamanity. The value in Streamanity is some fraction of the total amount of money people are willing to pay for videos it hosts, and no more. The generating function of Streamanity’s value is bound to scraping off the top of their creators. Streamanity’s service is in UI and data hosting, with UX for paywalls and comments. This would have been a huge value added in the early days of content hosting. But, the paradigm is shifting with decentralized storage available on BSV itself. When everyone can store their comments and videos directly to the blockchain, social media will ever-fractionalize until the interface layer looks less like a service - as it does today, and more like a tool that lives fine-tuned on each individual’s machine.

Moreover, how does one compete with Streamanity? The value proposition of the product is solely focused on maintaining a tight grip on the available data. One could reproduce Streamanity exactly as it is, and lower the fees, or charge no fee at all. Now Streamanity’s information illiquidity is the only remaining bastion of “value” in the product. What happens if creators move their videos, or start uploading to both sites? This is a nonexistent economic moat.

What if Streamanity were to augment the value of the existing video, focusing on a positive-sum business offering? Data models containing the relationship between creators, consumers, comments, and video could produce better search results, recommendation, audience insights, all as a service. The emergent core component being the blockchain transactions that provide the transparency of a product well-aligned with its users.

All of this is just a thought experiment, and not as a dig at Streamanity. They are a first-mover providing a service in a vacuum users typically demand. However, thinking about services like these and how they can keep up in an ever evolving world of decentralization is interesting and fun. Moreover, they are more susceptible to the early paradigm shifts unlike companies such as YouTube that can just throw cash and ignore the problem as the ship sinks. Staying on the bleeding edge means staying adaptable.