Web3 — Tokenising Fandoms
Turning passive fans into active stakeholders
A fandom, simply put, is a community of fans, online or offline, active or passive, with the glue being a shared passion or interest in something or someone. Any kind of fandom depends on people feeling like they are a part of something, and how that something plays a role in identifying who they are. There’s all sorts of fandom: sports fandom, music and celebrity fandom, fantasy fandom, art & entertainment fandom, fashion and brand fandom etc … Historically, fan clubs have represented the ultimate level of fandom; a group of people brought together by their shared love of an artist, a team or a franchise. The internet has enabled fans to come together like never before, with fans congregating heavily on mainstream social media spaces and allowing for any niche fandom to be properly cultivated. Fans have also become more fluid. Largely because of digital media, they now move swiftly from one passion to the next, from one form of entertainment to another, with shorter bursts of interest and attention span.
Interaction and participation are the key elements of fandom, but not all fans are equal. There’s plenty of what draws a fan into a community, from group identity and sense of belonging to getting fully immersed into a shared passion. Typically in any fan community the 80/20 rule prevails. Or better the 5/15/80 rule: 5% of fans actively create and contribute, 15% engage and interact, with the large majority being more on the receiving end as a devoted but passive audience. However, with the rise of seamless creation and community tools, more fans feel empowered to get involved and contribute, reshaping the participatory elements of culture and fandom.
This participatory thesis is at the core of the new formula of fandom, where autonomy and equity are described as the driving forces for turning self-directing fan communities into powerful cultural and commercial currencies. Beyond creating connection and a sense of belonging based on shared passions and interests, fandoms will become increasingly self-regulating and decentralised. Defining their own purpose, norms and values, communities will leverage new and democratised means of creation and distribution to unleash the creative freedom and potential of the collective fan base. But more importantly, they will increasingly seek to align incentives such that fans can share in the value being created, allowing those who wish to actively participate to buy or earn a stake in their artist, team or passion communities. By turning fanship into equity, affinity and passions are being translated into economic value, mapping to some level of ownership over what you love and the economic upside it represents. And this will lead to a blending of the social, cultural and financial capital systems I have been referring to in Part2 of my Web3 series. Communities will become their own micro-economies. By intertwining financial assets with cultural and social capital, we’re witnessing the rise of micro-economies driven by symbiotic and reciprocal ties between creators, artists and their fans, and governed by their own community tokens.
Community (or social) tokens are tokens issued by individual creators or communities that enable member-fans to collaborate and share ownership in the value created together. Tokens can be bought or exchanged, but tokens can also be earned as rewards for contributing to the community. By tokenising fandoms, artists, sport teams and creators can transform their businesses into dynamic micro-economies, leveraging the collective and creative power of their fan base. These tokens can represent a variety of rights, from asset ownership to access permissions, participation rights or certain holder perks and privileges. Thanks to smart contracts and their composable nature, tokens are highly versatile and customisable over time. And given the ability to make rights fungible, shareable, and transferable, these tokens become true cultural currencies, attaching measurable and tradeable value to community ownership. As such, community tokens combine elements of fandom (belonging and connection), patronage (membership and support) and investment (liquid ownership and financial upside). It’s a form of the ownership economy giving stakeholder fans exposure to the growth potential of their passion community as well as the opportunity to help shape that potential. With community or social tokens as equities, member fans get to benefit directly from the growth of the community, and hence are incentivised to actively help and contribute.
Combining the social and utility benefits of community membership with the possibility of turning a profit is also referred to as “Patronage+” where the “plus” is the possibility of earning value alongside the creators, teams and artists you support. Tokens, whether fungible or NFT, represent a better way for member subscriptions or loyalty programs. Why just subscribe, if you can also invest? More than simply a format change, community tokens and NFTs offer the added value of ownership, collectability, and the prospect of bespoke utility and benefits that may be offered to owners, such as merchandise giveaways, premium content, exclusive access to events etc. Because they are programmable, token utility can be mapped to both digital and real world experiences. In this sense, tokens can function like membership cards or tickets, providing access to events, exclusive merchandise, and special discounts, while also supporting new business and profit models, providing token holders a fractional share in the revenue or royalties being generated. Thus owning a community token or NFT effectively turns a fan into a member of a club, an investor and brand shareholder, and a participant in a loyalty program all at once. Artists and creators can offer goods and services in exchange for their own currency. As the creator, artist or community micro-economy strengthens, so too does the value of the token which enables it, benefitting every token holder who has made an investment into the fandom. This will create strong network effects as fans will become even stronger advocates.
Tokenising fandoms will make co-ownership the new web3 social and cultural primitive. By tokenising culture and claiming ownership over what we love, owning something becomes a way to belong, to self-identify, and to signal to others which communities we belong to and identify with. And so, our sense of ownership becomes social. Collective ownership allows us to feel heard (control), while also making us feel like we’re a part of something greater (belonging) in a way that helps us define who we are to ourselves and the world (identity). Having skin in the game aligns incentives between artists and audience, creators and followers, writers and readers, players and fans.
By putting ownership back into the hands of creators and fans, tokens serve as the connective tissue to grow fandoms into sustainable value sharing micro-economies to the benefit of all.