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Can Niche build another decentralized social platform? Heres why it matters

Meet Niche, a novel decentralized online marketplace and social media platform rolled into one.

Unlike virtually all other social platforms, the app neither harvests data nor sells advertising because of its revenue. Nonetheless it will require one to join a club membership by means of a non-fungible token, needless to say. And when you make any sales and purchases in these groups, the business requires a small cut.

Heres the twist: Because Niche is made on a blockchain application called NEAR, the business doesnt actually own the groups or its content. Members will own them, somewhat comparable to owning stock in an organization. Conversely, current social media marketing platforms own, moderate and monetize their user content; Facebook, TikTok and Twitter generate vast amounts of dollars in ad revenue each quarter.

The only method that [social media] found to monetize these networks was to basically turn [everyone] into generators, Christopher Gulczynski, CEO of Niche, told Digiday. And thats driving poor content. Its proving to be detrimental to society, just like the morality of it, which inadvertently promotes misinformation and a variety of stuff.

Where Niche shares similarity with other social media marketing is in its take on Facebook Groups and Marketplace to create a social media marketing community. Users are grouped by interests, whether thats home gardening or Star Wars, and there’s a short application process to become listed on free of charge. After launching on Aug. 2, Niche said in the initial week about 1,000 people requested the waitlist, which is used to curate a small number of groups and subjects predicated on demand. Niche can be partnering with content creators to lead some groups and drive engagement because the private beta rolls out.

I believe an extremely big trend in social media marketing would be to get a bit more intimate, just a little smaller in your networks, Gulczynski said. Were focusing it around interests, background items that you garner identity from the groups that youre in.

Los Angeles-based Niche was cofounded by Gulczynski and Zaven Nahapetyan, chief technology officer. Its no coincidence that Niche sports Facebook or Instagram elements: Nahapetyan was a senior engineering manager at Meta, the platforms renamed parent company. Gulczynski also offers a background in social apps, having led product at dating app Bumble and cofounding Tinder (he could be a patented co-inventor of its swipe feature).

Niche founders Zaven Nahapetyan, CTO, and Christopher Gulczynski, CEO. (Niche)

The duo recently closed a $1.8 million pre-seed funding round, with investments from MetaWeb, Alumni Ventures Group and NEAR Foundation. For the present time, Niches founders said they arent worried about revenue generation just as social media marketing giants are chasing growth. But because the platform populates with users and clubs, Niche may generate sales on digital assets, events or memberships transactions happening on the platform.

Theres a chance to generate revenue through going for a small percentage of these transactions, Nahapetyan said. If their net worth is certainly going through to the app, theyre likely to more events, theyre selling more NFTs with their community they are owners of, which becomes more exclusive thats whenever we benefit. So we think thats the proper model here.

Like attracts like

Niche is betting that folks could be more engaged and motivated to transact in groups with like-minded people, whether its around niche interests like conscious cooking or hardcore gardening. Nonetheless it is not any easy feat breaking into an already saturated market, dominated by Facebook, Instagram and TikToks vast amounts of users globally.

Niches first hurdle will undoubtedly be building this user base and creating alternate types of value as a result. The biggest platforms are established making use of their key differentiators TikTok has shortform entertainment, while Instagram has large communities and commerce. Niche must be in a position to create this kind of network effect, said Peter Kennedy, founder of influencer marketing company Tagger Media.

The network effect is why is these internet sites so valuable, Kennedy said. Only if 10 individuals were on Instagram, it will be worthless. In a simplistic model, the worthiness is heavily correlated to the amount of users on the network.

Yet average users probably arent too worried about the advantages of centralized networks versus decentralized. Niche must differentiate itself beyond just being truly a decentralized version of social media it needs to provide some content value. All [people] wish to accomplish is scroll to take a common content, Kennedy said.

Once a user base starts forming, the target for internet sites is turning people into active users. Active users means monetizable activity, but even the largest platforms see stagnation and competition with regards to growing their user base. Sean Lynam, director of strategy at New York-based digital agency GLOW, said Niche could also find itself against other membership and subscription platforms since it taps into creator partnerships.

It appears as if theyre comparable to Patreon or OnlyFans in which a lead creator will there be to talk about content and the others is there as their customers, Lynam said. If that is entirely user-owned, then it’ll need to be user-driven, and that may not allow you to get far enough to possess enough content activity to become a thriving space. So the investment had a need to build there could not be worthwhile or ever break even.

Niche founders said their platform differs from its competitors. Users typically discover influencers and creators on social media marketing and then head to another platform, such as for example Patreon or OnlyFans, to aid them with a donation on recurring membership. Niche said their users can perform the same using one platform by directly paying creators within their groups.

a gif of a broken chain

From users to owners

Perhaps another argument for decentralized media is changing the ownership structure for content creators and users. With a decentralized application, Niche can distribute ownership of the groups and content to individuals inside them, because activity could be verified on the blockchain. The mechanism is comparable to how cryptocurrency runs on the network of systems to verify transactions, which may be anything from a skill file to a subscription fee.

But all this is going on in the backdrop as users connect and buy on the platform. Existing services utilizing the NEAR blockchain include Mintbase, a platform for creating NFTs (like event tickets and crypto art), and Paras, something for exchanging collectible cards.

Which means they will have ownership on the content, over whos showing what and who runs the group. It cant be shut down by someone getting up 1 day and saying, Were likely to shut your group down, which coincidentally could impact peoples revenue streams, Gulczynski said.

Experts contend that letting users own this content created on a social platform could shift power back again to users, instead of corporate giants. Thats grounds why some are hopeful in regards to a decentralized internet called Web3, an upgrade from our current centralized Web2 with services dominated by tech giants, from Google to Meta to Amazon.

This implies [users] not merely have the proper to sell this content, but can build in terms good for them because the creator for anytime this content changes hands, thus developing a royalty, Kennedy said.

So when far as creators and agencies are worried, more ownership is way better. It offers creators and companies more stability in revenue and control over customers. Decentralized business models are on many agency and talent leaders radars, said Victoria Bachan, managing director of Whalar Talent, particularly when it involves how communities on platforms can drive commerce.

Everything you ultimately want by the end of your day is usually to be in a position to retain more of one’s IP ownership, which at this time is similar to the big gray area, with most of the general article marketing and social media marketing platforms, Bachan said.

Another potential upside to using Niche is leaner transaction fees on exchanges and payments. This can be particularly attractive to creators thinking about selling their digital content, whether thats minting a bit of media into an NFT or selling goods and services within the group. Because payments get processed on its system, they’ll be faster and cheaper than traditional payment systems that typically take 2% or 3% in fees. Niche said its exchange fees is a fraction of a single thing.

What I believe will likely be interesting about Niche is its likely to be considered a transaction versus this notion of just having millions or vast amounts of users, Bachan said. Its having an extremely, highly engaged, maybe smaller user count, but youre getting ultimately more engagement out of these.

The continuing future of social?

It remains to be observed if that model will continue to work. Others want to prove their business design using decentralized platforms, from watch-to-earn streaming platforms to play-to-earn video gaming. Its the theory that companies can redefine what’s valuable in a social community, by rewarding viewers and gamers with digital assets or currency on those platforms.

[Niche] could become or be construed as a pay-to-play model instead of an ad-supported one, GLOWs Lynam said. Revenue scales because the community scales, which is Niches biggest challenge scaling large enough to become relevant and much more than niche. Eventually Niche will have to earn money, and guess who itll likely result from.

In Niches case, thats an admissions ticket into exclusive clubs for connecting with a like-minded community. As soon as youre there, the hope is you stay engaged enough to get collectibles or take part in events.

While you can find certainly plenty of big conditions that a decentralized platform could tackle, from misinformation to identity theft, the brand new platforms cant exactly escape content moderation. Niche said it anticipates needing to create a content policy within the next year since it approaches the general public launch.

But Niche believes its group model actually helps it be simpler to moderate content and deter bad actors in comparison with mainstream social platforms. Because groups are contained with this platform, misinformation and viral content will be harder to spread. Nahapetyan said he thought a whole lot about content moderation after focusing on election misinformation in Brazil at Facebook.

What we saw was everyone connected through six examples of separation, Nahapetyan said. Its quite simple for bad stuff to spread. By siloing off these communities, we actually limit the impact of these. So if there exists a really problematic community, thats just self-contained. Only individuals who wish to opt into that content will dsicover it. It doesnt spread beyond that group virally.

Decentralization may possibly also lead to a far more democratized platform, where users may take part in the moderation or other updates on the platform. With out a corporate owner, users can influence changes, instead of be at the mercy of features getting killed or algorithms changing on the mainstream apps, Lynam noted.

Youll likely have a say on platform changes, meaning not only decentralization, but social democratization, aswell, Lynam said. Things such as Facebooks algorithm changes, Instagrams constant feature updates, or the noise on Twitter could become nonexistent issues on Niche.

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