Session: Empowering User Generated Content in Digital Economies - Catherine Porter, Tilia

[Music] thank you [Music] so we're switching to the metaverse magic track now and to kick off this track I would like to invite Catherine Porter to the stage who's going to be talking about empowering user generated content in digital economies hi hi uh we're almost to good afternoon and I just want to make sure I know how to advance the slides here okay great hello uh I'm captain Porter I'm the chief business officer of telia and Tilia is a payments platform

um in the previous track we heard a lot about the tension between growth in ugc and how important user-generated content is for our digital economies and how the payment means for creators who are arguably powering all of this ugc digital content hasn't caught up so that's the topic that we care about deeply at Tilia and what I will be talking about today so I spent before I came to telia I was five years at meta and I spent four of those years building out the DM what was the DM economy on crypto and on blockchain and then we were looking at trying to solve movement of money in a way that would make money movement instantaneous and low cost because we are forevermore living Our Lives online so the farther we go into the vision of the metaverse whether it's here today or whether that's 10 years from now it's

inarguably true that that's where we're living and so all of our Commerce is now going to need to adapt to be salable in this new digital economy the largest digital economy that we live in and as I said paying creators when you look at games alone whether it's a hundred billion dollars or it's 200 billion dollars you can look at a lot of data that says the size the overall Tam of creation for games in the digital economy is huge but creators aren't making money today the barriers for creators to get paid are really high because of forget blockchain and whether or not that scales I'm a Believer but I think it will take a lot of time traditional Fiat today is really difficult to move money quickly instantaneously low cost such that you can also pay creators particularly in the game Space for

digital content that can be less than five bucks very common to see 25 cent dollar a dollar fifty items in the game Space so this is the problem that we're solving today and that all help you understand what is working what the digital economy our largest digital economy including All Digital economies have going for it is the ability for a Creator to instantaneously create a brand for what she builds so you look at social media and the billions of people who are building their cottage industry businesses or large businesses on platforms like Tick Tock and Instagram anyone can get up and running with a digital shingle for her or his or their business idea

and the payment means for users to pay those content creators directly is a heavily regulated space the regulation is not just true of the United States which by the way is a residual regulation System state by state territory by territory extremely expensive but then it's also global so for any of us to catch up to the global nature of how our social Brands can become businesses that also means that the payment system has to be meaningfully efficient to move money globally but that opportunity because of the tick tocks of the world because of the Instagrams of the world that exist today WhatsApp too what's not working is effectively there's a lot of incentive for the payment rails today to continue

to be layers of middle check as you move that money so one of the things that I think about as I lead all of the sales efforts for Tilia which is the software that helps power this money movement in Fiat today is looking at the cost of goods that digital creators want to start selling underneath the threshold of what a network rail for credit cards how they can profit from moving that money and that sets an arbitrary minimum price for digital content it's about three to five dollars if you look at even what's happening in tipping and rewards alone for digital content creators the suggest the suggested minimally viable tip is about five bucks that's kind of a lot if you're just starting to build a relationship with a creator that you appreciate it's psychologically hard to pull out your

credit card every time and pay five dollars to start building relationships with creators that you're fans of but that's the cost of business today and it doesn't have to be that way we talked a little bit about the regulation of it and I think part of it is also just that the system is broken there are systems that have been cobbled together in order to create payment and money movement in this space a lot of our games platforms are AAA studios are looking at a very expensive model of Revenue share as met by a 1099 model to payout creators so in addition to opaque rules around how much money the Creator can make from her content than being served up for advertising purposes to pay her out requires a number of expensive checks

and balances inside a company and inside the accounts receivable departments and the accounting departments in order to get her paid so if you look at terms of service for becoming a Creator in any one of these economies it's often you know Creator beware you won't even get a check until you've grossed about 300 to 500 it's not worth our time and it's too expensive to pay you for your burgeoning business and that's the standard today because the regulation to move money is expensive for corporations to conceive of and to support and then the current models for payouts are also incredibly expensive I think what we see um and having been a part of one of the largest social media organizations in the world is that there's no question that in games and in Social and in traditional

media the engineering resources in order to build and scale are incredibly valuable and so you're not going to take on an expensive laborious time-consuming regulatory path until you have meaningful scale with which to profitably pay for the regulation necessary to move money quickly so that alone is one of the reasons why the Creator economy is stymied by its ability to pay its creators and really motivate create incentivize creators to expand exponentially ugc it's because the corporations themselves can't conceive of the millions of dollars and the years that it takes in order to establish the regulation necessary to do this from the outset and so then they take the risk then they take the risk that the regulatory money movement

will just fly under the radar for a bit until it's so large that somebody notices and then they have to catch up so Tilia the company that I'm with today if anybody's familiar with Second Life was created because second life is arguably the only metaverse that exists today it's a virtual reality environment that has been passionately stood up by its creators and its players for 20 years and second life if you're not familiar probably 15 years ago introduced this concept of a Linden dollar a digital dollar that could ultimately be cashed out in order to motivate creation of all kinds of wings and swords and player modifications that help make that gaming environment thrive The Regulators came and they said after a few years of watching this payout this

cash out literally take the digital dollar and turn it into money in your pocket that is a regulated Activity The Regulators came to Linden lab who were the creators of second life and said you can't do this we're going to shut you down and Lyndon instead said give us some time and we'll take on both the technical stack to create software that meets regulated activity and will work with you to make sure that we're in compliance so give us a few years they took the years they paid the tens of millions of dollars in order to acquire the licenses and then we spun that software out of Lyndon Lab in order to power all kinds of games communities today in our customer base and ultimately social media and media as well ultimately we all know that our games are going to be modified

and improved and made more exciting by the creators who build for these economies and they have to get paid in order to spend their time and their brains in the very resource intensive world of creating high quality digital content the thing that I've Loved about spending time with creators is it's not also often anymore a one-person shop digital content requires high value productivity to be salable to be enjoyable to scale and that also means that you've got co-collaborators and all of the influencers that we're familiar with now in our Instagram and our Tick Tock lives are highly produced and in the digital world it's very difficult in the current payment system for a Creator to then simply pay out her co-collaborators so that it's not off

platform in a way that she's also incurring risk of having to make venmo payments cash payments check payments and real life payments to her co-collaborators so the digital ecosystem in order for ugc to really grow and scale needs flexible fast low-cost payment in Fiat today and hopefully as blockchain and crypto scales it'll be met in web 3 with the interoperability and the the immutability of being able to track those payments that is in several years very excited about that future but today we need a system that works in cash I think the biggest point about our payment rails is I've already made it they're expensive and nobody has really stood up software that challenges that

so what does the right payment rail look like with licensing that is something that can be outsourced so I think for our largest game studios and our largest social media platforms as the product managers and the engineers are building out what scales there's an assumption that they also need to take on the maintenance the admin of building out the regulatory platform and that's not true you can build software like we have that's B2B and sell it to these companies to support the licensed activity and make sure that the company focuses on what it's great at which is building digital content and the platforms that scale we then come in with software that makes that money move in a regulated and instantaneous way and what this does is it's a neat solution for the digital content that

exists today in our highest performing economies you have to scale these low-cost transactions low-cost digital Goods globally in order for the publisher and for the creators to make money I think the other piece of this we've heard a little bit about kyc this morning the regulatory nature the liability exists and knowing that this money movement is compliant and not fraudulent so that is especially challenging in the pseudonymous digital environments that we all live in today my Instagram profile for example has always been synonymous it's a smaller footprint for me and I have you know an online name that's not mine cabin reporter isn't who I live as online makes it very difficult then for an unnamed Catherine Porter to get paid for any content that I'm creating on social media platforms there as a gamer

but if you have the kyc check underneath the pseudonymous identity you can still stay in platform it's a really interesting gray Market challenge of because sudanonymity is how we live digitally there's a whole gray Market that goes off game cuts the game experience so that the Creator can get paid in real time and she is pushed into an in real life identity situation with you know the wallets the consumer wallets that exist where all of a sudden you need the last four digits of your phone number and you need a real name in order to make that Transit transaction possible it's very much intention with the pseudonymous lives that we intentionally lead for our own safety so as we expand our content creation and how we profit from it it will be incredibly important to consider the platforms that keep identities safe to the user

the answer that we've come up with today is really looking at stored value of cash and tokenized ledgered money movement that our software understands the Catherine Porters and the details of all of the the pii that goes with the Creator payout that then allows the publisher to not have to interface with that information at all so the publisher can operate with Tilia underneath their platform and it allows for the Publishers and the creators to get started without any barriers of payment entry so forget about needing to gross 300 500 in order to even get paid with an obfuscated exchange rate of maybe 35 percent of ultimately the value of what you've built this is a fixed exchange rate that is transparent to the Creator and is fully

kyc'd underneath so that the Creator gets to build the content that she's passionate about pay out her collaborators instantaneously at whatever value that she's making at the terms that she's also asking for it which may be real-time payment or it's a request for payment every two weeks all of those barriers to entry that exist today because payments are difficult get torn down and are helpful as we think about digital economy scaling so I invite you to check out Talia if you are creators building on publishing platforms that we see all around us today if you're publisher as well we'd love to work with you and I'll take your questions if you have any I think we have two minutes yes hi hi no I welcome your question yeah um just speaking on to the I really like your talk just first first and foremost

thank you um I I I'm a big fan of what second life has been doing for a long time oh I love hearing that and my friend Jack used to work with with you guys as well so I'm familiar with you guys um I'm curious if the sort of in-ecosystem transactions that you're describing paying out your collaborators being paid directly if those things when done inside these closed ecosystems or inside the game and inside these worlds do all of those events count as taxable transactions or are you is your structure set such that they're only being taxed when they're withdrawing from the ecosystem into real Fiat cash uh all of the the kyc'd and administrative money movement is on the cash out so if the Creator is requesting real-time payment or if she's requesting to settle every two weeks or whatever her terms are then as she's moving that money from the closed loop okay so closed looping the tokenized and economy money movement when she makes that cash in ACH or in a

consumer wallet then that's the moment of paying the fees yeah and also being kyc yes I'm actually pretty loud so I might not need this okay um awesome so you're talking about branded coins that are U.S compliant and that brings the immediate question that a lot of the ugc people that I know are in Europe or Asia so how do we do that do they have to have a registered U.S presence in order to participate in this correct and so Tilia if you long story short Talia engages with U.S entities and then can operate globally so second life has Global uh users that we pay out and we do that based on regulatory regime because we have the U.S licenses and we're operating with the U.S entity then that has regulatory foothold I think as we expand and we want to sell into Europe and we want to sell into you into the UK

and um it's more open in some of the high GDP High gaming countries in Asia but you look at the regulatory perimeter and you make a decision about licensing so we're currently in application for the UK and EU in particular if you yeah ah hello I like the intimate nature of our room so it is nice thank you so much again for the talk is really great as in any developer working on a web through game um I have so when you say like branded coins can you just name a couple ones that you're working with sure um the ones that we I'm thinking of anybody that I can well so we work in the web three space and what's been launched for a long time is Upland um where they are very much in the nft space and we have the Branded coin there um we have a couple that are launching

this summer in leading up to GDC um where you're looking at a large publisher who has multiple gaming Studios and platforms underneath it Marketplace developer platform uh published titles and they work with us in order to create a unified coin that works throughout the developer Marketplace published gaming space ecosystem but underneath the large publisher umbrella so you'll see more of that this summer come out from us well if it's underneath Tilia if Tilly is powering that coin then there's interoperability that could be possible already built into the software otherwise then the publisher engages with Tilia directly sure thanks thanks everybody

[Music] [Applause] thank you