So, I'm going to take us back to 2007.

I'd just spent about six months working on album

that I'd poured my heart and my soul into,

and it was getting about three plays per day on Myspace at the time,

and I was getting more and more depressed when I started noticing these other people

who were playing guitar and singing

and putting videos on this new site called YouTube,

and they were getting 300,000 views.

So I decided I'm going to start making some Youtube videos.

And one day they featured a video of my band on the homepage,

which was amazing -- we got a bunch of new fans.

We also got a bunch of people

who, I guess, just didn't really like the music or something --

(Laughter)

It's OK because people started coming to our shows,

and we started touring,

and we came out with a record.

And when I checked our bank account balance

after our first monthly iTunes payout,

we had 22,000 bucks in it,

which was amazing because at the time I was living at my dad's house,

trying to make a living as a musician by uploading videos to the internet

which literally zero people respected in 2009 --

even the people who were uploading videos to the internet.

And so for the next four years,

I uploaded more and more videos to the Internet,

and they got better and better,

and we made enough money through brand deals

and commercials and iTunes sales

to buy a house.

And we built a recording studio.

But there was one big problem:

making money as a creative person in 2013 was super weird.

First of all, the business models were changing all the time.

So our 58,000 dollars of annual iTunes download income

was about to be replaced by about 6,000 dollars of streaming income.

Steams paid less than downloads.

And then as more and more creators started popping up online,

there was just more competition for these five-figure brand deals

that had kept the band afloat for years.

And to top it all off, our videos themselves --

the creative stuff that we made that our fans loved and appreciated --

that were actually contributing value to the world,

those videos were generating almost zero dollars of income for us.

This is an actual snapshot of my YouTube dashboard

from a 28-day period

that shows one million views

and 166 dollars of ad earnings for those views.

The whole machine in 2013

that took art online and outputted money

was totally nonfunctional.

It doesn't matter if you're a newspaper,

or an institution,

or an independent creator.

A monthly web comic with 20,000 monthly readers --

20,000 monthly readers --

gets paid a couple hundred bucks in ad revenue.

This is 20,000 people.

Like, in what world is this not enough?

I don't understand.

What systems have we built where this is insufficient

for a person to make a living?

So, I actually have a theory about this.

I think it's been a weird 100 years.

(Laughter)

(Applause)

About 100 years ago,

humans figured out how to record sound onto a wax cylinder.

That was the beginning of the phonograph.

Right around the same time,

we figured out how to record light onto a piece of photographic paper,

celluloid -- the beginning of film and television.

For the first time, you could store art on a thing,

which was amazing.

Art used to be completely ephemeral,

so if you missed the symphony, you just didn't get to hear the orchestra.

But now, for the first time,

you could store the orchestra's performance on a physical object,

and like, listen to it later,

which was amazing.

It was so amazing in fact,

that for the next 100 years, between 1900 and 2000,

humans built just billions and billions of dollars of infrastructure

to essentially help artists do two things.

First, put their art on a thing,

and second, get that thing around the world

to the people who wanted the art.

So, so much industry is devoted to these two problems.

Oh my gosh, there are trucking companies,

and brick-and-mortar and marketing firms, and CD jewel case manufacturers,

all devoted to these two problems.

And then we all know what happened.

10 years ago, the internet matures

and we get Spotify and Facebook and YouTube

and iTunes and Google search,

and a hundred years of infrastructure

and supply chains and distribution systems

and monetization schemes

are completely bypassed --

in a decade.

After 100 years of designing these things,

it's no wonder that it's just totally broken for creative people right now.

It's no wonder that the monetization part of the chain doesn't work

given this new context.

But what gets me super excited to be a creator right now,

to be alive today and be a creative person right now,

is realizing that we're only 10 years into figuring out this new machine --

to figuring out the next 100 years of infrastructure for our creators.

And you can tell we're only 10 years in.

There's a lot of trial and error, some really good ideas forming,

a lot of experimentation.

We're figuring out what works and what doesn't.

Like Twitch streamers. Who's heard of Twitch?

Twitch streamers are making three to five thousand bucks a month

streaming gaming content.

The big ones are making over 100,000 dollars a year.

There's a site called YouNow,

it's an app.

It allows musicians and vloggers to get paid in digital goods from fans.

So, I'm also working on the problem.

Four years ago I started a company called Patreon

with a friend of mine.

We're 80 people now working on this problem.

It's basically a membership platform

that makes it really easy for creators to get paid --

every month from their fans to earn a living.

For a creator, it's like having a salary for being a creative person.

And this is one of our creators.

They're called "Kinda Funny."

They have about 220,000 subscribers on YouTube.

And when they upload a video,

it gets somewhere around 15,000 views to 100,000 views.

I want you to check yourselves right now.

I think when we hear numbers like that, when we hear "15,000 views,"

and we see content like this,

we just snap categorize it as being not as legitimate

as a morning show that you'd hear on the radio

or a talk show that you'd see on NBC or something

But when "Kinda Funny" launched on Patreon,

within a few weeks, they were making 31,000 dollars per month

for this show.

It took off so fast that they decided to expand their programming

and add new shows,

and now they launched a second Patreon page --

they're making an additional 21,000 dollars per month.

And they're scaling what's essentially becoming a media company,

financing the whole thing through membership.

OK, here's another example.

This is Derek Bodner,

a sports journalist who used to write for Philadelphia Magazine

until a few months ago when the magazine cut out all sports coverage.

Now he writes articles and publishes them on his own website --

he's still covering sports, but for himself.

And he's making 4,800 bucks a month from 1,700 patrons,

financing it through membership.

This is Crash Course --

free educational content for the world.

This show is actually on the PBS digital network --

29,000 dollars per month.

This is a duo sailing around the world,

getting paid every month for documenting their travels

from 1,400 patrons.

This is a podcast, "Chapo Trap House", making --

actually, since I screenshotted this,

they're making an additional 2,000 dollars per month,

so they're now making 56,000 dollars per month for their podcast.

And Patreon's not the only one working on the problem.

Even Google's starting to work on this.

A couple years ago, they launched Fan Funding;

more recently, they launched Super Chat

as a way for creators to monetize live streaming.

Newspapers are starting to experiment with membership.

New York Times has a membership program;

The Guardian has over 200,000 paying subscribers