There is no FREE money in Steemit
Recently I was reading this article on medium and one particular line got me thinking.
"The only source of money that is coming into the system is the money that other content writers invested in. That means that by upvoting some post you redistribute OTHER’s money (writers, not readers)."
While most of the article was interesting and insightful I was not sure what to construe of this. If you think a little I think this is true. But I don't think we need to be alarmed. Whether it is SBD or STEEM or STEEM Power they are all tokens. A token means a share in the company/platform. Your share is worth something only when the platform makes money. The platform may not be making any money today but still the tokens are valued around 1USD because there are enough number of people who believe in the potential of the platform.
Steemit is a publishing platform
Steemit is a publishing platform. I would put TV channels, Radio stations, Newspapers, Facebook, Twitter, Instagram, tumbler, medium steemit and all the the similar websites in the same bracket. If content is created(by a single individual, editorial team or masses) and is consumed by people, I would call it a publishing platform. By that definition Steemit is a publishing platform and publishing platforms have only two ways of making money.
How does publishing platforms make money
Any publishing platform in general and Steemit in particular can make money in two ways
- When advertisers pay them.
- When readers pay to consume the content.
TV channels and Newspapers are the examples of publishing platforms which make money using both these. In case of newspaper it is the revenue from advertisers that subsidises cost the end users pays for the newspaper. The same could be said for TV channels as well. Excluding these two every other platform makes money from advertisers. Especially on the web making users pay a fee for content is turning out to be a herculean task. Even the best and popular newspapers were not successful in this. The same holds good for the Web 2.0 companies as well. The publishing platforms that were abel to monetise have thrived and others have withered away or are on the verge of withering away. While Google and Facebook are examples of the companies that made it big using the Strategy 1, Apple and Netflix are examples of companies making it big using Strategy 2.
How does steemit make money
While Steemit may not be making money today going forward Steemit will find more ways of monetising user attention spans. In this Steemit might be more similar to Facebook as the two ways infront of Steemit are
- Promoted Posts
- Advertisements
Facebook has used both of them very effectively. For at least couple of years I think Steemit will stick to promoted posts. The maximum they might adventure to will be interlacing some promoted posts in the tabs like home and trending. Before looking at Advertisement Steemit should consider differentiating individual accounts and company accounts so that they can safely test the Advertisement concepts and also use it as a playing ground to prove to the advertisers that they will get their return on investments through promoted posts. When steemit really gains the momentum and steem tokens stabilise to the range of stability we see in the shares of the companies then Steemit might consider Advertisement. But the major differentiator will be in case of steemit it will be the platform making money and not the company. So the returns will also be redistributed to the users of the platform.
Should Steemit stick to only promoted posts
In my opinion yes. Ads in general are irritating and intrusive. Irrespective of whether it is an image, post or video an Ad is still content. The only way to make sure that this content doesn't become irritating and intrusive is by making it compete with other content. This way the quality of ads can also be improved. The business behind the ads will put more thought into it and make it targeted and tag it properly. A side benefit of this would be if the content of the Ad connects with the consumers they will upvote the content and the Ad maker can even recover the money invested in the ad. This will further trigger the cycle and lead to better ads.
Yes.
Steemit Devs should think and make advertisement platform for steemit.
I thought of the same. Advertising is a very lucrative business
Advertising needs to be non intrusive.
@Coincentral invites you to join 7 NEW SteemCentral Projects:
🐳MarketCredit Coins (ICO)
🐳FreeExchange
🐳FreeMall
🐳Marketing
🐳Security
🐳Developer &
🐳Mediation Centers!
Get our Whitepaper from the web link in our profile.
true
Well explained.
You make some great points, @gokulnk. I think if there were a clearer and easy to find FAQ on how the whole Promoted section works, more people might use it. Like for example, I still am not clear on whether or not Promoted posts only show up in the Promoted tab, or if they also show up in the New categories, or personal feeds, for that matter.
I am planning on writing a post of promotions. I would like to share my learnings from going for a promoted post.
Currently the promoted posts don't show up in New tab or personal feeds. They however do show up in the Promoted tab of the category that your post is in.
Thanks for sharing that. That is actually quite discouraging to hear that Promoted posts only show up in Promoted section. I would think if someone is paying, that their post should show up in more areas. I say this because frankly, I hardly ever think to check the Promoted section for anything.
You need to think about steemit as a group miner. When you up vote someone you pay them the fee that steem charges when it is used in the block chain. When we mine currencies we power the system and get a small payout for using our mining power. Same thing with steemit upvotes it acts as mining steem and you get paid out the fee you made off of helping power steem.
Agree that steemit upvotes act as mining steem. But steemit should make sure that only upvotes for good content or genuinely popular content will count as mining and that is why curation rewards sould be reworked. Recently I wrote a post about why resteems should be part of curation rewards.
Im new to steemit but iv been looking into how it works because as we all know nothing in life is free, nothing. A rework is a great idea because as of now iv noticed that people will post anything just to post. I havent looked into your post but ill be checking it out shortly. Very nice community on steemit glad to hear from smart individuals. upvoted
Agreed. If curation was more transparent and less annoying (the 30 minute rule could use reworking), that would be great. Preferably, it would be more rewarding than self-voting spam comments, which seems to be one of the primary forms of current abuse (that and reposting spam into trending ala BookingTeam.)
Excellent description of how Steemit works. Well done.
makes sense. thanks for the insight...
As long as they're not as obnoxious with their ads as Facebook!
Just imagine if steemit had the size of Facebook, or at the very least Twitter... it would be madness! Hopefully someday it will surpass them.
Thanks for posting!
I see all of Steem's value as from investors into this platform; whether that's writers or people that believe this is a magnificent future innovation; us early adopters are being rewarded for accelerating the growth of very useful software!
Once the value of steem rises these rewards are going to be higher. What I don't really understand is when there is a good working site and a proven model why is Steem not taking off. I don't worry too much as it gives us an opportunity to buy when it is still low :)
right; appreciation to counteract the dilution; exactly how bitcoin works; demand overreaches inflation by huge degrees.
EDIT: Maybe because not a mainstream celebrity has jumped on yet right? that would be BIG
Upvoted because, yes, steemit is a form of media and as such has two revenue streams which you listed (advertising, consumer $). I think we may be missing something a little more obscure though. Steemit is a marketing tool for steem. It gives the platform a 'viability', some substance in very competitive and new field (cryptocurrency). Where bitcoin was a pioneer and relied on it's initial 'catch all' versatility, we are now seeing product launches for this currency which specializes in niches like NLC2 targeting the fantasy sports market. Steem has made a very good play here with steemit, steepshot, zappl and chainBB (probably getting some of these wrong) in digging their heels into the booming social media market. Their 'branding' cost is covered by volunteers who choose to use their product and promote it for both their gain and the gain of Steem (content creators like you and me). It really is some nicely done business. It sets the chess board for social giants like Twitter and Facebook to answer in kind for content, not play a shell game with their users, adjust the rules and then demand a portion of income these user make....
Are they going to overtake Instagram or Twitter? Probably not, but they put themselves in a strong position to be the currency of choice when these giants finally concede to rewarding their content providers in the future. Hold onto your Steem. even if steemit doesn't become the next big platform, the currency model is forcing acknowledgement for the powers that be, and this marketing plan has put this crypto in the forefront to be the currency of choice for the next generation of social media trends.
Just a thought... where do most entrepreneurs live? In the social media hemisphere. How many of them are looking at low cost, high impact, high involvement for their next project? How do you bring on a million highly involved employees who will promote your product and not pay dime in healthcare or social security or whatever? Very attractive for new product and service launches...
With the rollout of steemit (and dapps), looks like Steem has made a very good move.
Peace
If Steemit becomes the currency of choice for rewarding social engagement on internet we have a giant in making :)
This post was in the promoted section hahaha
My second attempt at trying promoted posts. I have a couple of learnings and will share it in the next post.
Steem should focus a bit more in promoted posts, maybe add a few more sections and give more visibility to it, imagine some day Apple or Coca-Cola advertising in a promoted post, who knows.... hahaha
But right now promoted posts are not very visible, unless we open the "promoted" section.... Which few people do...
For the first time I have come across your article and believe me you have turned the tables! Very nice concept bro @gokulnk I agree with your opinion that u have provided in the concluding paragraph of your article. Yes Steemit should substantiate a better platform such as quality ads for the betterment of most of the users and for the maintenance of quality as well.