Digital Land

Content is Digital Land Ownership

I was talking to my parents this week about buying vs renting a home. The age old debate.

And while on the topic, I had an interesting thought…

Making content is kind of like owning digital land.

A quick aside…during the web3 craze, there were NFT projects like Decentraland and Sandbox that were selling parcels of land as NFTs.

The appeal was that if there was going to be a “scarcity” of plots, and this was where everyone ended up spending time in the metaverse, then owning a plot would be like owning property in the real world.

I almost fell into that trap, but then realized that things like proximity to roads/neighborhoods don’t matter if everyone is one click teleporting into virtual spaces, the creators of the world could make more plots whenever they wanted, etc.

But the reason I share that story is because I do believe the concept of “digital land” exists.

More millionaires have been created from real estate than any other investment class. This is mostly due to the fixed scarcity of physical land and the increasing demand for it.

Certainly if most people spend the majority of their time online today, there must eventually be some form of digital real estate as well.

Well there is…

The scarcity in the digital world is attention, and the digital real estate that captures it, is content.

But it’s a different kind of real estate with very different properties.

As I mentioned, the appeal of physical real estate is the permanent scarcity of the land. There will never be more (until Elon gg’s us to Mars).

With content, there will always be more. In fact, the number of new pieces of content will probably go up, increasingly, over time.

But that doesn’t change the fact that renting space on your content is akin to cash flowing from a rental property.

When I make a video, it’s like I build a digital house and put it into the world.

My “tenants” are the brands and sponsors that pay to be mentioned in the video.

Some videos have no tenants, but they all could if I was big enough and that was the format/strategy I chose to pursue (see Joe Rogan podcast episodes).

But the key difference between physical and digital property that works in digital’s favor is the variable nature of the property type and the frequency it changes.

With physical property, you buy it once every 10-20 years (unless you’re a flipper). If you buy beachfront property or a Brownstone in NYC, amazing, but you had to pay up for it because the market already accepts it as premium. Beachfront is beachfront and that won’t change.

With digital property, I get to build a new house every single day, and because of social algorithms, I can generate beachfront property (e.g., 1M+ view videos) with the investment of a mobile home (cost to create).

Advertisers will pay me more if my videos do better, but each video costs me the same amount of money to make.

This would be like if buying a physical house was a slot machine where the price to spin was $250K for everyone and you were equally likely to get a 2 acre beachfront plot in Hawaii or a shack in the ghetto.

But this is obviously not how it works. In the physical world, more cash means better property means better cash flow.

In the digital world, more skill means better content means more cash flow. And skill in ≠ cash in.

Anyone can acquire skills if they allocate time to developing them. In my opinion, it’s easier for beginners to build skills than to acquire money.

The idea of content being digital property completely changes how I view it.

If this is true and the metaphor holds, we should all be rushing to learn the skills that enable us to become digital land barons, creating as much high quality content as possible.

One other factor that gives content creators an unfair advantage…

Wealth in digital property can be earned through skill at an increasing rate from week to week. Wealth in physical property can only be bought, and the variability of the earning potential is fixed.

For example, I can grow my average views from 50K to 150K from one week to the next. This means my “digital houses” will earn 3x more in rent income in just 7 days. This could never happen in physical real estate..rents stay the same for at least 12 months at a time.

The point where this comparison breaks is when considering the durability and half-life of the property on each side.

A physical beachfront house will be there forever (unless the aliens come). A piece of content, even if it’s the best thing in the world, will fade from attention in a matter of days.

That means the cashflow potential of each digital property isn’t passive and recurring, it’s active, in bursts, and decays extremely quickly.

I suppose a better comparison to the recurring cash flow of a physical house is the ability to generate consistent active cash flow bursts every day from the content machine (you).

One physical house cash flowing monthly is kind of like one “of you” creating 20 digital houses every month.

The difference, as mentioned above, is that the cash flow from the physical house each month will remain the same and will only increase slightly over time. The cash flow from you as a digital land producing machine could scale very quickly depending on your results.

Also, certain pieces of content, like Mr. Beast’s Squid Games video or Joe Rogan’s podcast with Naval, do act more like a physical beachfront property.

I’m guessing Beast and Rogan still make five to six figures passively every month from those videos alone.

All that rambling above to say this…if physical real estate minted the most millionaires in the 20th century, digital real estate will be what mints the most millionaires in the 21st.

And digital real estate…is high quality content.

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