Maybe you think “that’s
a weird question”. But when we talk about the Web 3.0 and user generated media
business, both startups and Venture Capitalists will ask exactly this question:
what is the real value potential for empowering everyone to earn money from creating
content?
There are many
ways to approach this topic – most prominently, using the current size of the
market or that of neighboring industries like the book market. If the US book market
has a total turnover of, let’s say, $50 billion, we can start making
assumptions about how much of this amount is generated online, and what the
potential of a self-publishing author vs. a professionally published author is.
I think this
approach is wrong.
Because the
content industry, as of today, doesn’t really exist. Content today is created
and processed in a manual, highly inefficient way. Media products are not part
of a larger processing and application system. Knowledge, as the most
significant source of value in the industry, is still in a baby state, not much
higher developed than in ancient Greece 2500 years ago. There are no systematic
problem identification systems and markets, no large scale knowledge unit mass
production, no automated knowledge application, feedback loops and
re-engineering processes. A publishing company today has as much in common with
an advanced knowledge company as Johannes Gutenberg’s printing machine had with
a blogging platform.
To estimate the
true market potential of a future content industry, we first need to define and
understand what content actually IS. Content is actually everything people can publish,
and that other people can absorb into their brains. It is mindware – the stuff that
makes up our minds.
The value of mindware originates from two sources: from the mere
pleasure it creates through logical insight or emotional inspiration, and from
allowing us to create more value in the physical world by providing us with the
mental and behavioral patterns that solve problems.
While the first
source of value is similar to other goods in the sense that it is limited to satisfying
a part of our need portfolio, the second one is special. If content includes
all mindware that helps us to solve problems and basically create all other
kinds of content, it is different from nearly all other goods we know. Because
in this case, it’s market potential is unlimited. Let me explain why:
The idea of a
market potential stands in direct correlation with the idea of value creation. The
market potential of an industry equals its maximum level of value creation and
contribution in the total economic mix of things. For example, the auto-market has
a certain maximum size, because it’s unlikely that people will commit more of
their resources to it than the healthy equilibrium between the other goods they
want.
But when it comes
to content as the tool to generate solutions, things change. Because what
exactly is the amount of money people would possibly spent on solutions? Right,
it’s 100% of their money. Because everything people want are solutions:
solutions for their needs and problems. Now, we have to consider that knowledge
is only part of the solution. The other part will be the physical goods and resources
required to build the solution. But knowledge always is a part of any solution,
and probably the most important part.
If we apply some
simple metrics to the value of knowledge – or conceptual content – in environments
where there already are higher developed content based approaches such as
construction, machinery and others, the fair share of value conceptual development
gets is normally roundabout 10-20% (think about your architect, or engineering blueprints).
If we assume that
the Web 3.0 – a web that effectively unleashes large scale content and
knowledge production for all areas of life – is capable of turning our society
in an advanced knowledge civilization in that literally every challenge and
problem is solved through systematic production and exchange of knowledge, and
that the fair share of value the content behind it gets is the same as in
developed knowledge industries, that would end up being 10%-20% of… everything.
Everything equals the world GDP, which is something around $65 trillion.
Do I seriously believe
that the Web 3.0 has a market potential of $6.5 - $13 trillion? Yes, I do.
Because these are not empty figures – these figures represent the largest civilizational
leap humankind has ever experienced. If everyone starts systematically
producing knowledge, aligning his or her thinking capacities to the market
regulated needs of all others, and get’s rewarded instantly based on the true
value that was delivered, a few trillion dollars are the least spectacular thing
we will witness.
