Licens Whitepaper

Version: 1.0, last update: Nov 1, 2022

The Flaws of Web2 Creator Economies

The primary challenge in the creative licensing market today is the increased level of centralization, which leads to an array of problems for the creator as well as the licensee.

Centralization & Monopolization

Existing infrastructure for Web2 creator marketplaces has enabled a few companies to consolidate in recent years to the point of having an overwhelming market share:

Market consolidations are taking place as the industry experiences 6.5% YoY growth, leading to a few industry giants decisively cornering a monopolistic share of the market. Creators and content users in these marketplaces pay the price for this level of centralization on multiple fronts:

High platform commissions

Centralized content licensing marketplaces take a large cut from the creator sales, 55%-85% on iStock10, 60%-85% on Shutterstock11, and 75%-77% on Adobe Stock12. Not only are they cornering the market, but these handful of public companies have established a monopoly over the revenue of each creator.

Zero transparency

Licensing is controlled by the company and both creators and licensees are unable to access historical data on the content listed on the marketplace. Businesses and entrepreneurs cannot easily review an image’s or video’s history of usage before purchasing it for their own brand.

Lack of control

While digital creations are the root of the business model, the creators themselves have zero say over how the process works. Web2 creator platforms own the creator’s audience, data, and most of the revenue while fully controlling how the audience is serviced and how revenue is generated and distributed. They use a subscription model to maximize their own revenue and profitability while the creators’ payout gets diluted with each download, often resulting in creator earnings of only ~$1 per download.

Breakdown of Creator & Licensee Pain Points

For Creators

For Licensors

4. 19 Essential Canva Statistics You Need To Know in 20225. Canva Web Traffic Statistics6. Shutterstock Mergers and Acquisitions Summary7. Getty Images to Acquire Unsplash, the Preeminent Image Platform for Global Creators8. Adobe Reports Record Revenue in Q3 Fiscal 20229. Adobe to Acquire Figma10. iStockRoyaltyRates11. Earnings Schedule - Shutterstock12. Adobe: How Royalties Work