Six Ways New Social Companies Will Monetize | Andreessen Horowitz

Incentives align when the creator is an expert in his or her particular product category: the platform takes a cut, the third-party brand makes a sale, the creator monetizes their expertise, and the consumer purchases products with higher confidence (and often, entertainment value).

Commerce: Platforms that help creators sell products. There’s also ample room for new entrants. Platforms like PopShop, Whatnot, Huddle and Lit Live are tackling livestream shopping—already a popular phenomenon in China—while others, like The Landing and The Newness, focus on vertical categories such as interior design and beauty, respectively.

Virtual live experiences: These can take the form of “ticketed” shows, one-on-one interactions, or group meet-ups.

Tipping, donations, and microtransactions. Since Twitch launched tipping in 2017, we’ve seen early signs that it’s catching on in the U.S., often via donation platforms or common P2P apps like Venmo and PayPal. Clash, for instance, is a short video platform similar to TikTok where tipping is a key revenue source for creators (and Clash takes a cut)... See more

There are two avenues for this model: direct subscriptions to the platform or subscriptions to a specific creator

Zebra IQ, for example, is a VIP membership platform where creators can try out experimental content on a smaller, devoted audience, as opposed to pursuing virality for the sake of ad impressions.

Digital goods and in-app currencies: With this model, emerging social platforms can monetize without relying on creators or exclusive content. While digital goods and in-app currencies are still comparatively rare in the US, they’re becoming increasingly popular in games.

Interest-based paid communities: These companies allow users to engage with others that share particular interests or face similar challenges, often centered around mental health, wellness, career guidance, or fitness.

The reigning ad model is becoming less viable for emerging social platforms—and less enticing for creators.