The acquisition makes sense, and I’m excited to see what the team comes up with re Kiosk.

It would make sense to fold Mirror into Paragraph at some point.

Instead of waiting for that to happen, I decided to pick up my stuff and move over now.

This is the last post I publish here. Future posts will be published on my Paragraph.

If you’re a subscriber you’ll start receiving future posts via Paragraph automatically.

See you soon,

BRG

TL;DR:

1. Attention drives consumer business revenue.

2. Onchain economy enables attention tokenization.

3. Attention divides into active focus and passive mindshare.

4. Token ownership might change traditional valuation models.

5. Future models could embed tokenized attention in everyday products.

Attention is the scarcest asset because the raw material of attention is time. While it would be wonderful to create time, it's (currently) not possible. Time is a constrained resource.

All consumer businesses are built on attention as a core resource. Attracting and retaining attention and funneling it into consumer spending is the core business of every consumer brand and entertainment franchise, for instance.

Traditional businesses and models leverage attention as input to generate cash as output. Cashflow is the second-order effect of attention.

The onchain economy introduces new capabilities. One such capability is tokenizing intangible assets, such as attention.

A lot has been written about the latest memecoin frenzy as a proxy for tokenized attention. I even wrote some about it myself back in February [link].

Still, it's early days. The dynamics of tokenized attention are underexplored and not yet well understood, as are its possible effects on business models, valuation models, etc.

What follows are some musings around attention, tokenizing it, and the dynamics that follow.

Attention in the Context of Tokens

Attention flows can be likened to cash flows in a business, but there is one vital difference. Cash is a tangible asset that can be compounded over time. If a business operates with a 15% annual yield on invested capital and starts with $1000, it will have $1150 after one year and ≈$1520 after the third. Basic math.

This doesn't work for attention. Attention is an intangible asset and a continuous stream of engagement/focus. You either have someone's attention or you don't.

But, let's separate attention into two sub-categories:

• Active attention (where my focus is right now, real-time)

• Passive attention (retained mindshare)

Through this lens, acquiring a token where the primary value-driver is attention, we could say that

• buying a token is proof of (previous) active attention

• holding the token signals retained mindshare (I still care about it)

Compounding Attention

If we follow this arc, we will end up in an interesting place; passive attention, represented as token ownership, is a tangible asset, and tangible assets can be compounded over time.

In traditional business, it's commonplace to value businesses based on their cash flows and potential to compound over time.

It's interesting to consider what new valuation models may become relevant (and old ones that need to be rethought) in a context where businesses can compound attention as a first-order mechanism rather than compounding cash (second-order).

Attention flows may be relevant, like cash flows for traditional businesses in this context.

We can make it even more interesting by considering how value-streaming technologies like Superfluid can be incorporated into business models to directly connect active attention and tokens, too.

Imagine an onchain music streaming service where artist tokens are streamed in real-time to the user as she plays music from the artist.

New Products, Shifting Consumer Behaviour

Let's return to memecoins. Tokenized attention in this form is currently tightly coupled with financial speculation. But in the future, these tokens could be distributed and rewarded through other mechanisms, dampening the (overly) financial aspect. The streaming example I mentioned above is one example.

If all of the above can be true and come to fruition, it opens up space for novel products and business models that will also shape new consumer behaviors:

Attention as scarce, but tangible and user-owned assets. Being onchain means users can access liquid markets where this attention can be traded.

I don't think the end-state is the current over-financialized, exchange-driven way to trade attention. Rather, it will be embedded into the core of product experiences as a new primitive. One example that comes to mind (that's been around since way before this latest memecoin cycle) is the Basic Attention Token (BAT) from the Brave browser: It's a web browser with an embedded crypto wallet. When browsing, users can opt into ads. These ads run on a Brave-controlled ad network, and revenue from ads is split between Brave and users. Users receive these rewards as BAT tokens into their wallets and swap those tokens for fiat money or use the tokens to pay for content and services in the browser.

I'm not sure where this train of thought ends, so bear with me and consider this a work in progress. If you have any suggestions or feedback I would love to hear it.

Please reach out on Farcaster (@brg) if you have any thoughts, ideas, feedback etc.

First, we do a little TL;DR:

1. Digital environments blur the line between content creators and consumers, accelerated by user-generated content and generative ai.

2. Fan-created content, like fanfiction, showcases vast creative energy and potential for collaborative projects.

3. Co-creation is appealing but complex to implement, needing new strategies for effective collaboration in entertainment.

4. Blockchain technology supports these efforts, managing contributions, rewards, and intellectual property efficiently.

5. The Basepaint project exemplifies community creation, where artists co-create and monetize art via NFTs on a blockchain platform.

The lines between creating and consuming are blurring, driven by the rise of social media platforms and immersive online worlds powered by user-generated content. Generative AI will grow this wave, removing technical barriers that enable more people to cross the chasm from consuming to creating.

It's a fascinating trend. It will change the landscape of entertainment – it already is. It will change the way legacy entertainment and content brands think about involvement. And it will give more room for grassroots creator economies and related brands to flourish.

As consumers, when we discover something that resonates deeply with us, we naturally want to engage more deeply with it.

My go-to example for this display of creative energy is fanfiction. Millions of words are written by fans to extend the story universes they care about. There is no reward, just pure acts of passion. It's wonderful, but it's also a signal of underutilized creative energy.

Co-creation seems conceptually exciting but can be complicated to translate into practice. Given the blurring lines of consuming and creating, many entertainment segments must overcome this complexity. Co-creation and community participation will be essential to sustainably generate engagement and retain attention in a crowded content world.

Crypto networks and blockchains are useful tools for orchestrating this kind of collaboration and co-creation. The tech can handle reputation, reward mechanics, value capture, splits, and ownership rights.

It's valuable to watch the crypto-native projects that emerge in this category. These initiatives and teams can move without being restrained by legacy business models and strategies. It's just open space.

Such projects are worth exploring in their own right, as they're forming net-new areas of entertainment and content.

But, they can also serve as interesting proxies for what other, established parts of the entertainment sector can use as the baseline for their own playbooks.

We previously explored memecoins and intangible value and the Doge meme as proof of concept for "IP as platform."

Let's do the same with coordinated community creation.

Basepaint launched last year and is an example of a microcosm of community co-creation. It's a shared space to create art and runs on crypto rails for orchestration. Here's how it works:

• The community creates art on a shared canvas for 24 hours.

• To contribute, you need a brush (mint a brush NFT). A standard brush allows you to paint 100 pixels per canvas.

• The canvas locks and the artwork becomes an open edition NFT available to mint for 24 hours.

• 90% of the profits are distributed between the artists, proportional to the number of pixels they painted on the canvas. The rest goes to maintaining the protocol.

There's additional scaffolding and mechanics like leaderboards, special artist brushes, and community voting on color themes. As I'm writing this, the community is working on the "Day #264: Sunflower City" canvas, and it currently looks like this:

You can check it out yourself here. It works in real-time, so you can watch the artist's cursors move around the canvas while painting and discussing in the sidebar chat.

Here's a selection of previous canvases:

(PS, Continue reading to find out why two of the pieces are highlighted.)

The themes painted regularly reference other parts of the crypto space and culture, including the Ethereum upgrade, the Bitcoin halving, and "Higher" (a Farcaster-native headless lifestyle brand).

The different pieces are highly intricate and detailed. On average each canvas will have 4-500 contributing artists. Holding the two previous sentences together should make it obvious why this is a fascinating experiment.

It's a living, breathing example of coordinating distributed and fragmented creative energy aimed towards a common goal and resulting in tangible units of creation.

In total, the works have generated 365 ETH (roughly $1.15M) so far, with the top paintors earning $30-40K each so far.

But there's more: The artwork from Basepaint is licensed as CC0, meaning it's released into the public domain. As an act of support for Basepaint (and the proliferation of crypto culture broadly), a project named Nouns Factory is selling teeshirts with Basepaint prints.

(We explored the Nouns movie in a post late last year. Nouns Factory is a project out of the same headless brand).

I ordered a couple of teeshirts a few weeks ago. Maybe you recognize the prints?

It's also an interesting full-circle moment: One of these teeshirts displays a basepainted Steamboat Willie. In January, I wrote about the Steamboat Willie IP transitioning into the public domain and what that means.

And here I am, writing this piece a few months later, wearing a Steamboat Willie teeshirt that was co-created by 463 artists onchain.

Funny.

The Basepaint project is fascinating in isolation, but also proof that it's possible to use onchain mechanics to coordinate community creativity.

It's interesting to imagine what these mechanics could look like if woven into the ecosystem of established IP, for instance. 

They could serve as a way to let passionate consumers travel along the participation spectrum, cross the line between consuming and creating, and create novel engagement loops.

Please reach out on Farcaster (@brg) if you have any thoughts, ideas, feedback etc.

TL;DR:

1. Onchain entertainment integrates blockchain to reshape the entertainment sector.

2. It is an evolving concept, currently explored more than defined.

3. The evolution includes three phases: traditional entertainment using onchain tech, new forms born from onchain culture, and new formats driven by onchain capabilities.

4. Examples include Hollywood's NFT initiatives and community-owned brands like Doodles and Pudgy Penguins.

5. The future promises innovative, community-driven entertainment formats utilizing tokenization.

Entertainment is a massive market, but it is difficult to pinpoint exactly how big. Your average Statista or similar report aggregates large categories like music, video, and gaming to create a number. Entertainment is much broader than that. The actual "market size" is likely in the trillions.

This makes it an exciting segment to consider in the onchain-ification of the world.

Onchain entertainment is a concept I've been pondering for months now.

What follows is less of a "fully formed concept" and more of an "open exploration based on current mental models." Sometimes, the latter is a necessary tool to achieve the former.

Let's start with the basics – what is entertainment?

Here's a definition I came up with in collaboration with a friend (ChatGPT):

Entertainment is any activity designed to provide an audience with pleasure or relaxation, often through art or amusement that engages and captivates the senses. It aims to stimulate enjoyment and create emotional responses.

This is the mid-curve take. (Sidenote: GPTs are really good at mid-curving).

If we simply frame entertainment as "things we spend time on for fun," it simplifies things and also widens the aperture as we reflect further.

It's clear that blockchain technology and the capabilities it unlocks will shape entertainment, from capital formation and community coordination to digital property rights and tokenization.

Here's my current model for thinking about this.

The model divides "onchain" into two key components; tech and culture. Onchain tech is relatively easy to understand and latch onto from an outside-in perspective. Onchain culture is more abstract, but I argue it is equally important. It can only be understood by being a part of it. You have to gm to understand gm (if you know, you know).

Understanding onchain culture is relevant because it will eventually become an embedded part of culture broadly, similar to "online culture."

Onchain entertainment is evolving along an arc that follows the idea that new technology drives distribution innovation first and format innovation later.

• Phase 1: Traditional entertainment experimenting with onchain tech

• Phase 2: New entertainment born from onchain culture and tech but replicating old formats

• Phase 3: Net-new entertainment formats uniquely enabled by onchain technology and supported by onchain culture

During the NFT bull run in ≈2021, most major Hollywood studios launched some NFT-related initiatives. This is an example of the first phase playing out. Most of these initiatives were decoupled from the broader audience journey. They rose and fell in isolation, often carried out as third-party licensing plays.

There are still things to be done at the intersection of traditional entertainment and onchain technology. We explored some of these in the Disney NFT essay.

Around the same time, the first Web3 native entertainment brands emerged. Some of them are still around, and a few are thriving. Doodles, Pudgy Penguins, BAYC, and Nouns come to mind. I have no doubt that several of them will evolve into major entertainment brands and franchises.

These entertainment properties leverage the unique capabilities of blockchains to build community-owned entertainment brands and, in some cases, community-created entertainment output.

Interestingly, while these projects were born onchain, they evolved to orient toward producing entertainment in traditional formats like audio, video, and games.

Taking a step back, both the traditional Hollywood studio NFT drops and the concept of community-owned entertainment brands are experiments on distribution innovation.

Following the arc, this means that we have the most exciting part ahead of us: The invention of new entertainment formats that are unlocked by onchain culture and technology.

This may be entirely new projects and concepts, or it may be some of the existing onchain entertainment properties evolving. Likely it will be a mix of both.

What it looks like is less clear.

"Crypto The Game", a seasonal onchain survival game, is one early signal.

Going back to our edge-of-curve defintion of entertainment, I'm also inclined to think that the attention speculation games we see with memecoins will play a role. Tokenization, financialization and speculation are likely not bugs but features of new onchain entertainment formats.

As I mentioned in the beginning, these thoughts are highly work-in-progress. I would appreciate hearing your thoughts on the topic, so feel free to reach out if you have them (@brg on Farcaster).

I enjoy writing essays frequently as a way to keep progressing; there are always new insights, trends to explore, and things to learn. For the past year, we’ve explored several different trendlines that play a role in shaping the future of entertainment, consumer internet, and probably society as a whole.

The topics covered range from Roblox via AI to crypto and memecoins on the other end of the spectrum.

The formation of new trends, habits, and culture initially happens under the surface, away from the mainstream spotlight. That makes it easy to miss. It happens slowly at first, then things reach escape velocity, and then everything, everywhere, all at once.

The recent growth of the Farcaster social protocol and the surrounding ecosystem comes to mind as a recent example. And it’s still early days over there. None of my neighbors are on Farcaster yet, and most probably don’t even own crypto yet.

At least three major trendlines should be on everyone’s radar today. They also happen to be the recurring topics of my writing.

• crypto and blockchain networks

• ai and generative tech

• immersive online spaces

From an outsider’s perspective, they can all be dismissed if you wanted to (but why would you):

“Crypto isn’t real value; it’s a bubble.”

“AI content won’t outpace human-made content.” 

“Only kids and teenagers play Roblox and Fortnite.”

I do not subscribe to any of these views, and neither should you if you want to understand the future.

And that future isn’t shaped in a vacuum. There is no crypto-shaped future over here and an AI-shaped one over there. Instead, the trends all have a slight bend to them. A bend that makes them converge to impact the same future.

Immersive online spaces like Roblox serve as a proxy and proof-of-concept for conditioning future generations to experience the digital world and live their online lives with higher fidelity. This immersion requires infinitely more high-fidelity content and assets. Generative tech enables the required production capacity and customization capabilities to meet this demand. As this happens, ownership of digital assets (from fashion to attention tokens) will become normalized and expected.

Future corporations will form and operate in this environment as digital-first and digital-only entities. New business models will be invented. This will all be orchestrated through public ledgers, smart contracts, and blockchain networks (or just crypto).

It all converges to the same future. Pay attention.

Paying attention doesn’t mean you read some essays here and there and should consider yourself covered. If you truly want to pay attention, there’s only one way; be on the ground.

Spend time in those immersive spaces. Adopt some AI into your workflow. Start playing around with Farcaster and in-frame transactions.

How would you understand the energy of memecoins, and their proxy as attention tokens if you never felt it (even when that means getting rugged)?

It’s like cooking. Nobody becomes a great chef by reading a thousand recipes but spending zero hours in the kitchen.

Yet, there are a surprising number of chefs with many recipes but no receipts. 

Don’t listen to them. 

Instead, figure it out yourself—and have fun doing it.

Reach out on Farcaster if you want to discuss: @brg :-)

TL;DR:

1. The real challenge in Hollywood is capturing the audience's attention, not just business issues. Memecoins demonstrate a new way to solve this problem.

2. Insights from memecoins can help understand what captures and keeps public interest, offering valuable lessons for Hollywood.

3. Hollywood needs to create new types of franchises that connect with current cultural moments and interests, going beyond traditional sequel-based models.

4. The future of franchises may lie in internet-native intellectual properties and immersive online platforms, suggesting a shift towards community-driven content creation.

5. Hollywood could benefit from adopting new technologies like NFTs for more precise measurement of audience interest, similar to metrics used in the world of memecoins, to better develop and market new content.

Sometimes my diverging interests take me on surprising paths. Over the past few weeks, I have explored and written about memes and memecoins as outlets for attention.

I want to circle back to Hollywood this week, but the learnings from the previous pieces offer insights we'll bring along.

Hollywood is in an interesting in-between phase right now: still adjusting after the pandemic, absorbing the effects of last year's strike, and navigating shifting consumer behaviours.

The movie industry is a machine that has perfected the art and business of capturing, aggregating, and recycling attention in cultural objects. In a trough now, some insider voices point to "franchise* fatigue." No more sequels. It's time for independent, mid-market content to shine.

(* I will use the term "franchise" as a catch-all for movies that are part of a series, based on already established and well-known IP and characters, and generally benefit from network effects.) 

This is a noble thought, but it fails to appreciate how instrumental franchising is to the movie industry and why it works: Of the total box office revenue generated from the top 100 movies, ≈86% came from franchises and sequels (and that’s not including the first movie of a sequel).

As we explored in the "Content Barbell Theory," powerful forces push more attention to the edges of the content spectrum: toward the big hits (driven by network effects) and niche content (driven by passion). Mid-market content sits in this attention vacuum, and most movies in this segment have to cold-start attention capture. If the industry were to cycle out of franchises into mid-market standalone movies, it would break the economics of releasing movies. Because buying attention in the market is so capital intensive.

Franchises work well because they build on top of cultural objects with pre-stored attention: previous movies of a series, other content formats like a book series, etc. It’s compounding attention over time.

Hollywood is not facing franchise fatigue. The challenge is that the current batch of franchises is over-mature.

Hollywood is experiencing attention slippage. 

Attention Slippage

Most franchises that bring in the big bucks are 10-15 years old. Over this period, people’s attention and interests naturally and gradually shift. This is further amplified as new generations of consumers age up to become crucial parts of the market, bringing their own cultural references along.

Attention slippage happens when one continues pursuing cultural objects, failing to realise that the aggregated attention of the object is decaying.

This can be difficult to track and measure for entertainment IP, as it typically happens along the axis of movie releases. There's a long lead time between each movie in a series/franchise. This creates staggered "moment in time" data (box office results) rather than a continuous stream of data.

Let's turn for a second to something else that thrives on attention but is easy to measure continuously: memecoins (here we go again.. yes).

This is the volume graph of a memecoin from the previous crypto cycle. 

As we have discussed, memecoins are akin to financialized attention markers online.

It's easy to track when the memecoin above held attention and when it lost it. The comparison between movies and memes only goes so far (for now). Most memecoins are attention sprints. Movie IP is attention marathon.

But there is value in finding ways to measure the attention of movie IP on a finer scale and with more frequent data points. This is a meta-argument for owners of this type of IP to explore ownership and NFTs for fans, not primarily as a source of revenue but as a source of attention measurement.

Out With the Franchise, In With the…Franchise

Attention is slipping from the established movie franchises because people care about other things. The solution to this challenge is simple and complex: establish new franchises that build on cultural objects with current attention.

This is easier said than done. Sequels have predictability. Attempting to launch new franchises is high risk and unpredictable. 

But the shift is already happening. I wrote a piece for Variety last year (it requires a subscription to read) about Hollywood's move into gaming IP as a source for stories to tell. I left one part out of that op-ed: Hollywood sourcing from gaming is only transitory.

Many still see gaming as a distinct content format. Still, the largest gaming platforms (Roblox and Fortnite) are proxies for a more immersive internet (More here about Roblox as a social network, for instance). 

Consumers will increasingly spend time in immersive spaces online. And where we spend time, we also form culture. The seeds of future Hollywood franchises may not be distinct games, but come from cultural objects that form and grow in these online spaces. Think of this as internet native IP.

The magic potion for Hollywood is identifying the right seeds and put them into the machine we discussed in the intro.

This requires a different approach than before. The communities that form around internet-native IP are living, connected, and real-time. They're also global by default. Hollywood studios have to account for this in how they approach and work with IP creators and the communities.

Internet native IP also creates opportunities to leverage digital objects as connective tissue in the community, creating the same trackable attention markers as the memecoin example.

You can connect with me on Farcaster

TLDR;

1. The transition to digital necessitates brands to evolve from viewing IP as products to platforms for community creation.

2. The blurring line between creators and consumers online leads to deeper engagement through participation and ownership.

3. Memes and crypto demonstrate how digital assets can gain tangible value through attention and virality.

4. The Doge meme's journey from a viral image to a valuable NFT showcases the potential of community-driven IP evolution.

5. Enabling community co-creation and rewarding engagement can transform traditional IPs into dynamic, participatory platforms.

The world will be more digital tomorrow than it is today. People’s attention is increasingly spent in digital spaces. This gradual transition leads to new consumer behaviors and requires established brands and businesses to adapt.

We have previously explored how entertainment brands can thrive in the future by enabling more community participation. This requires reorienting from protecting “IP as products” to letting these assets flourish as platforms.

The line between creator and consumer, previously well-defined offline, is blurring online. Fan experiences should be designed as funnels with participation (and even ownership) as the deepest levels of engagement (something we explored last year in “The Spectrum of Entertainment Participation”).

We also circled the idea that memes and crypto meme coins serve as a blueprint for how a digital value system (blockchain) can make intangible assets more tangible. Visible. Measurable.

For a meme coin, that intangible value comes in the form of attention and online virality. But we don’t have to make a huge mental leap to see how this can be relevant for legacy IP businesses.

Disney, for instance, carries $90B of intangible assets on its balance sheet (some of this is “goodwill” from overpaying for the 21st Century Fox assets in 2019, but the rest is brand and IP).

We’ll eventually combine all of this into a coherent framework I’m working on. But, before we get there, we need a tactical and practical touchpoint.

That’s what’s on the plate for today.

Hi, Doge

The “Doge” meme is part of internet history. It originated when a blogger posted pictures of her Shiba Inu dog, Kabosu, online in the 2010s. Since then, the dog has been the character in countless meme images online. The Doge also inspired the first big crypto meme coin, Dogecoin. However, that coin has no direct affiliation with what we’ll discuss below.

The owner later minted a 1/1 NFT of the original photos. The most famous one with the Mona Lisa-esque smile (above) was sold for $5.5M to the pleasrDAO, an online community.

(If you think that’s insane, please read “Investing in Internet Culture”).

PleasrDAO then fractionalized the NFT (dividing the NFT into smaller, tradable shares that allow multiple people to own a piece of it) and issued the $DOG governance token.

(Sidenote: The full story about pleasrDAO and the Doge meme and community is worthy a dedicated essay that I’ll get to later, so we’ll just do the TLDR here.)

Let’s pause here for a moment.

The path described above to bring an IP asset onchain is obviously a little esoteric and not what it would look like for a legacy brand. But the Doge meme is an IP asset as much as Elsa from Frozen is.

At this point in our story, the Doge IP is an asset and a product.

Now is where it gets interesting. Let’s look at how the product becomes a platform.

Manifesting Culture Onchain

Imagine you have a visual asset with a community attached to it. To drive growth and engagement, you invite the community to co-create content on top of the original asset.

You could do it without any orchestration. It might become beautiful chaos, but it is not a foundation on which to continue building.

It might look like this:

Instead, maybe you want some way to organize this engagement:

• A way to lower the barrier for more people to participate

• Organize all the different creations

• Keep track of participants (to reward engagement, for instance).

That’s what the Doge wanted. The community partnered with Titles to solve all of the above. Titles is a new, all-in-one tool for creating and publishing media onchain. It enables artists to train AI models on their original works and lets community creators use that generative AI model to make derivative works.

Creating an AI model for Doge means anyone can participate (not just those proficient with “handmaking” digital art or memes).

Now, the community contributions look like this:

The IP asset becomes a graph of creations that can eventually have hundreds of layers and even include multiple original IP assets. The source material is traceable, and so are the different creators.

Here’s a remix I made while researching for this essay:

This derivative uses multiple samples, including the Doge AI model. A few days ago, I minted a cute pixelated penguin. Since my wallet was connected to Titles, the penguin was available as an owned asset, so I threw it in there. The NFT was also automatically included as a source for this remix.

To incentivize engagement and creation, the Doge community distributes $DOG tokens as rewards for the most popular contributions. It creates a forceful feedback loop; engage more to own a bigger share of the original IP asset. Distribution of the rewards is simple since every derivative is attached to a contributor with a crypto wallet.

You can see how the meme is growing with derivative works here.

Now, Imagine This

How does this connect to legacy entertainment franchises? Imagine all of the above, but instead of a dog meme, it’s your favorite character from a movie. Imagine that instead of creating a picture, you’re creating an interactive asset that can be used inside a 3D online world like Roblox.

Mattel could train AI models to allow fans to interact, create personalized assets in family-friendly confines, and keep track of it all through the IP graph.

A knee-jerk reaction for a legacy brand might be to fear diluting the asset. The reality is that the world is moving online, and the online world is a big attention market. Allowing fans to cross over to participation as an outlet for their fandom increases the surface area for the original asset. Mix that with ownership and rewards, and you create a powerful incentive for people to create and become the distributor for those creations.

Both IP assets and NFTs share a similar and important trait: They are powered by network effects, and the value of these network effects accrues to the asset itself. For IP, this happens in an intangible, harder-to-measure way, while for NFTs, it happens in a very tangible and measurable way. Combining the two (IP + NFT) also combines these powers.

As IP transitions from product to platform, the Doge+Titles initiative is the best practical blueprint I’ve encountered (so far).

Please reach out on Farcaster (@brg) if you have any thoughts, ideas, feedback etc.

TLDR;

1. NFTs offer a promising solution to problems like scalping and fraud in the ticketing industry.

2. Beyond access, NFT tickets can enhance the event experience and offer unique post-event memorabilia.

3. Many events don't face the high-demand issues NFT ticketing aims to solve, focusing instead on building consumer loyalty.

4. Successfully integrating NFT ticketing requires navigating a complex landscape of existing ticketing systems and partnerships.

5. The transition to NFT-based ticketing will be gradual, requiring strategic approaches to overcome industry fragmentation and technical challenges.

Ticketing is everyone's favorite use case to explain how NFTs can be useful beyond profile pictures. It's an enticing opportunity, and understandably so. It's a big market. According to Statista, the event ticketing market is expected to reach ≈$84 billion this year.

It's also a space with much more depth than most people consider.

I've seen many takes about the expansive and obvious opportunity that NFT ticketing presents, but few that consider the realities.

This essay explores that opportunity and some of the challenges to navigate.

Ticketing Status Quo

Tickets to entertainment experiences (sports, movies, live events) are access passes. We buy a ticket and it grants us access to a thing. That's the core utility of a ticket, which means that its utility (and value) expire "at the door". After you've used it to access the thing, the ticket has fulfilled its purpose.

Back in the day, tickets were paper-based, and you might keep a ticket stub as a memory object. Today, tickets are largely digital—no more than an email with a PDF attachment. After the event, your ticket stub disappears in the stream of emails in your inbox or is relegated to an app's off-screen "History" tab.

A ticket can be and do much more. And in the future, it should!

The Obvious Opportunity

In-demand events have a big problem with no perfect solution: demand far outstrips supply. This has led to severe bot-ing, scalping, and fraud problems in the industry.

Scalpers buy up tickets and sell them at inflated prices on secondary markets. Scammers will take this further and sell the same ticket multiple times. The end result is that the consumer experience can be chaotic and stressful.

NFTs and blockchain technology can be compelling solutions to these industry challenges. This is the first prominent argument people go to when explaining the benefit of NFT ticketing. It's a highly relevant argument, but it should be considered with an important modifier:

Most ticketed events do not have this problem. I don't have an exact way to measure it, but far from every event has demand that outstrips supply by orders of magnitude. For ease, let's assume it matches the power law of the Pareto Principle (80/20). When demand for an event is equal or less than supply of tickets, the scalping problem is reduced and mostly eliminated. The same goes for the second-hand market for those tickets.

Rather than managing 10x demand, most event organizers (whether a concert venue or a movie theatre) must invest in generating demand and building consumer loyalty.

Expansive Utility

Another exciting opportunity that opens up when we put tickets onchain is expanding the utility of a ticket beyond access at the door.

Increased utility can drive more demand for the event and increase the perceived value for consumers.

Some ideas of what this might look like

• The ticket becomes a node in the fandom graph, enabling the artist/studio/organizer to engage with and tailor experiences for the consumer based on it as (one of many) data points in the graph.

• Tickets can turn into memory tokens after the event. At a sports event, the ticket would update after the game to include a video of a memorable moment (like a TopShot card). This can be further gamified by enabling people who went together to "bond memory tokens" to unlock bonus value and utility. For the organizer, it creates exciting data about how individual patron fandom graphs intersect and overlap.

• For movies, tickets can be a gateway to character-first loyalty experiences.

• Third-party involvement. Hotels and restaurants can offer discounts or other types of value to ticket holders of an event in their area. This enables third parties to leverage an event's attention while also benefitting patrons (and organizers) who experience value-adds for holding a ticket.

• Patronage and event financing.

It can also be used to solve sector-specific challenges. For instance, when you go to the movies, multiple parties may want to reward you for that activity. But they want to reward you for different reasons. Going to the movies is a multi-layered loyalty activity.

• A movie theatre cares that you choose that specific location. They care less about the content you decide to watch.

• The distributor/studio cares that you choose to watch their content. They care less about which theatre you went to.

An NFT movie ticket constructed with this in mind would enable both parties to reward the consumer, leading to more value for the consumer.

Challenges

Event ticketing is a big market, and the design space for NFT tickets is vast. So, go for it, right? I don't think it's that simple. Let's explore some challenges that must be navigated to tap into this opportunity.

Tip of the Iceberg

The natural MVP for an NFT ticketing service would be to create a product that let's an event organizers publish an event and sell X number of tickets. Tokenproof is an example of one such product. It's great for that use case. For small or one-off events, this may work well. But, in many cases, the ticket is the tip of the iceberg, with a complex structure of logistics underneath.

Things like

• Season tickets, discounts, and holds

• Seat maps, sections, and tiers

• Distributors, sales agents, and aggregators

• Ticket bundles, timed releases, and dynamic pricing

That's why most continuously operating venues (concerts, theatres, movies, sports) run niche, vertical software to power their operations. The software looks like a ticketing system in the front, but it has many tools to handle all of the logistics in the back.

Running a movie theatre is very different from running a stadium. So, the event ticketing space is segmented with purpose-built, vertical software for the various segments. The importance of this can be easy to underestimate if one doesn't have insight into the industry.

Imagine someone builds a "better" Shopify, but it's better only in one dimension: slightly faster online checkout. It doesn't include features like inventory, marketing, and a POS. It's unlikely that a Shopify customer who's dependent on the "whole stack" will switch.

Without this depth of features, creating a differentiated product is difficult.

For someone bringing "NFT ticketing" to the table as the main value prop, many overhead requirements must be solved to scale into larger market segments, either by building or integrating. This leads us to another challenge.

Distribution & Fragmentation

As in any industry, players play in different segments. For live events, there are a few big venues and big artists who play them. Then, there's a massive landscape of mid-sized and small venues operating independently. In the US, the power of the former is heavily concentrated with Ticketmaster/Live Nation.

The structure is similar for movie theatres. There are a couple of big chains and many smaller, independent operators. I'm less familiar with sports ticketing, but it's safe to assume it's similarly structured.

A natural way to navigate this is by targeting the bottom end of the market, smaller events. However, if an NFT ticketing product goes to market with scalping and resale as its main value propositions, it's likely that this value proposition will be a mismatch with the market segment it is targeting.

The fragmentation of the bottom end of the spectrum across all sectors of entertainment ticketing also means that the software stack is highly fragmented. This is relevant when considering the previous challenge of feature breadth. Should an NFT ticketing platform build all the "non-crypto" overhead to compete for 1:1 with existing players in the market, or should you partner with existing players and create an integrated "layer on top"?

The latter might seem like a good option until you figure out that it, in practice, means trying to integrate with a bunch of on-premise, legacy software stacks from vendors with few incentives to be helpful.

It creates a challenging market landscape that requires smart navigation to scale beyond the initial cohort of small events that require "nothing but ticketing."

Outside Dependencies

There's also a chicken-and-egg problem when realizing expansive utility for NFT tickets. An NFT ticket would enable a third party, like a hotel, to reward ticket holders, but it's only interesting when a meaningful number of tickets are issued as NFTs. Then, they would need to invest on their end (services and products to create, distribute, and redeem such rewards) until the opportunity exists. This pushes the transition from theory to practice further down the line.

Going back to the value chain of movie tickets, the above is likely true for a film studio looking to create loyalty and connection with fans. Distribution either requires winning the top end of the market (big chains) or taking the long and winding road through the fragmented landscape of independents—or both.

As we advance

This essay may seem pessimistic, but that isn't my intention. I believe that all event tickets will eventually be issued as NFTs on blockchains.

But I think the road to getting there is more complex than some of the "Tickets as NFTs are so obvious" takes that I often see online.

There are already many "NFT ticketing" products in the market. So far, most of them are tapping the surface-level functionality. One notable example is GET Protocol. Among other things, they offer a product that enables existing ticketing vendors to produce digital twins of tickets, integrating blockchain-based ticket issuance on top of an existing stack. This can be a way to increase adoption without building all the overhead required to offer a full-suite, vertical event software.

The exciting projects to watch will target specific segments of event ticketing, preferably with a deep knowledge of the space and a clear strategy to navigate some of the challenges we have discussed.

I'll end with a second-order opportunity I can see forming on the horizon: As the range of "NFT ticketing providers" grows and the adoption of blockchain-based tickets increases, there will be a need to orchestrate data from different ticket protocols in one unified way.

If artists want to drop rewards to their fans from a tour, they may have played at ten different venues using five ticketing providers. When they get back home, they will want a simple way to airdrop a memory token and a merch discount to all of them.

FWIW, these thoughts are based on my experiences running a company that builds a full-stack operating platform (including ticketing) for movie theaters.

Please reach out on Farcaster (@brg) if you want to discuss the event ticket NFT space!

TLDR;

1. Disney has struggled in the gaming sector, leading to a shift towards licensing rather than in-house development.

2. Disney partnered with Epic Games, investing $1.5 billion to create a new entertainment universe, leveraging Epic's tech and Disney's IP.

3. The partnership recognizes gaming platforms as modern social networks and entertainment hubs, essential for engaging younger audiences.

4. This collaboration aims to keep Disney IPs relevant between major releases, offering a platform for fan engagement and content testing.

5. Despite short-term benefits, the essay questions the long-term value for Disney and suggests dependency on an external platform could be a strategic disadvantage.

Disney is great at crafting stories and characters that people grow affection for. The company is also great at giving those stories global distribution, aggregating massive amounts of attention, and monetizing it all.

But there is one sector of entertainment that's become the Achilles' heel. A limp. The limp is becoming more pronounced as consumer behavior changes.

Gaming.

Through the years, Disney tried various approaches to tap into gaming, in-house and externally, with variable success. It never managed to plant a solid beachhead. 2016 marked a final directional change as the company shuttered its self-publishing arm, Disney Interactive, and switched to licensing to third-party game developers.

Meanwhile, the gaming economy grew bigger than music and movies combined. Naturally, the biggest entertainment brand in the world needs a sustainable strategy for gaming.

Like Thanos searching for the Infinity Stones in Avengers, Bob Iger (Disney CEO) recently announced that he (hopefully?) found his.

Did he?

The Next Step

On February 7th, Disney put out a press release:

"The Walt Disney Company and Epic Games will collaborate on an all-new games and entertainment universe that will further expand the reach of beloved Disney stories and experiences. Disney will also invest $1.5 billion to acquire an equity stake in Epic Games alongside the multiyear project."

Like its streaming service, Disney+, the first big question to answer is: "Buy or build?" In that case, the company chose to build. In this case, they found something in between.

Disney briefly built a "Metaverse Department" a few years ago, then shuttered it again. It may signal that the company looked closely into building a platform for themselves.

Considering Disney's previous failed attempts at creating games in-house, it's understandable that they decided to find an external partner. Considering their earlier collaborations with Epic in Fortnite (skins and events for Marvel, etc.), they naturally continue this partnership.

Also, Disney already uses Unreal Engine (Epic Games' 3D engine) across the company, from theme parks to virtual production sets. In theory, this creates exciting cross-over opportunities.

Why Gaming is Important

The Disney/Epic partnership is not just about Disney getting into gaming. Open-world gaming like Fortnite and Roblox represents a meaningful generational consumer shift online. Time and money are increasingly spent online and in digital 3D spaces. The lines between gaming and hanging out online are blurring. Viewing these destinations as "gaming platforms" for "gamers" is a mistake*.* A better model is to consider them as new social networks and entertainment hubs.

Standing on the sidelines of this shift could become incredibly costly for a company like Disney. Revenue, marketing, and cultural significance: When the locus of attention shifts, all the other parts follow. Attention fuels the entire IP ecosystem of Disney. The younger consumer segments are essential for the company and are the segment that moves the fastest.

Disney has to keep up to keep its IP flywheel relevant.

Flywheel Integration

I'm sure you've seen the Disney flywheel that illustrates how the company's various parts drive value to and capture it from other parts. It's intricate and fascinating.

Attention ebbs and flows. The primary attention (and revenue) magnets for Disney's new content in the form of movies and series. This flow is naturally staggered – years go between each Frozen movie, there are only a few Marvel movies per year, etc. It's due to the time it takes to produce, but also because they would over-saturate fans if they could go to the movie theatre for a new Marvel flick every week. Movies and series are the "big rocks" to attract attention and evolve the story worlds.

Disney can fill a meaningful gap with an immersive platform infused with the same characters and worlds fans love. They keep their IP fresh and top of mind for fans between the big rocks and through a less attention-intense format.

Think of it as a way to capture overflow attention.

We can also imagine how the company can utilize this online destination to test new ideas and host virtual red-carpet events and similar activations.

A Second Fiddle?

Let me play devil's advocate for a little bit.

I'm curious to understand how this partnership is structured. The press release is intentionally vague:

"The Walt Disney Company and Epic Games will collaborate on an all-new games and entertainment universe(…)"

This "Disney metaverse" will be built using Epic technology and infrastructure, with Disney IP injected into it. But which company owns it? Does Tim Sweeney (Epic founder and majority shareholder) or Bob Iger ultimately control it?

The $1.5B Disney is investing in Epic might seem like a lot, but for reference, Disney bought Pixar in 2006 for $7.6B (≈$11.6B inflation-adjusted). The latest known valuation of Epic (from a 2023 investment round) was almost ≈$30B. Even if we consider a valuation haircut of 25%, it would put Disney at a 7% ownership stake. Hardly enough to be in control of anything, and far from a "this is our future" kind of bet.

It's interesting to compare this to Disney's streaming strategy. After years of licensing content to other platforms, the company recognized that streaming was becoming a primary distribution channel. It pulled its content from Netflix and built its own service, Disney+.

Primary motivation: direct consumer relationships and data.

Disney is already a little late to the "online 3D worlds are the new super destinations" party. As a public company, announcing to investors plans to sink billions into building an in-house "metaverse" to be released next decade would probably be a mouthful. Especially considering the company is still trying to make the in-house streaming project sustainable.

The partnership with Epic is a good move, considering the above. It requires limited capital and will yield tangible results fast. But it's good in the short term, and I'm more skeptical of the long-term value for Disney.

Contrary to streaming, where the thinking was, "This is core; we have to own it," this move signals that Disney cares about "gaming," but it's secondary.

As the world continues to move toward "digital first, higher fidelity," dependency on an outsourced "metaverse" may be a real disadvantage for Disney.

For Epic, this is a massive win across the board. They get higher leverage on existing infrastructure and can infuse their platform with the biggest IPs of the world to attract users and capture value from it all.

The Only Out

There are two outcomes for Disney:

1. It fails, leading the company into another wandering through the desert to figure out gaming

2. It succeeds.

I think the second option is more likely, and it leaves Disney in the awkward position of realizing too late that its second fiddle is actually a "first chair". Disney will then want to acquire Epic. The problem is that Epic's value has grown significantly, inflated by the success of injecting Disney IP into its ecosystem.

The short-term move for Disney potentially forces a second-order move that becomes much more expensive than it needs to be. And even if Disney would want to buy Epic in the future, there's no guarantee that Tim Sweeney would want to sell.

So, maybe this is Tim's infinity stone, not Bob's?

Hit me up on Farcaster if you want to chat about this: @brg

TLDR;

• Content battles for attention in a finite media landscape.

• Attention gravitates towards either major hits or niche content, sidelining mid-market content.

• Big IPs grow through network effects, while niche content thrives on passionate communities.

• Generative AI boosts niche content creation, making it easier and more efficient.

• Successful adaptation for mid-market creators involves focusing on niche passions and direct monetization.

We're in an interesting time for entertainment and media. The landscape is shifting, creating challenges and opportunities for content creators and media companies.

Before discussing the Barbell thesis, let's focus on core media content principles.

1. At an atomic level, all content competes for the same resource: attention (time). A modifier to this is that we prefer different types of content in different contexts (watching a movie is not the same as listening to music), and we have tastes (some like pop, others like rock). 

2. There's a natural limit to how much content we can consume. The content market, basically. Technically, the demand/market size is 24 hours times the population on Earth, but realistically, it's less than that. Market growth can come from population increases or the average time spent on content per person. According to a recent survey, the latter is 12 hours of media per adult daily in the US. Add ≈8 hours of sleep, and there's not much room for growth. Attention is a scarce, constrained resource and content competition is a zero-sum game.

There are currently two forces that are impacting this spectrum. The forces work in tandem to push attention to the edges, the hits, and the long tail. In turn, it creates a vacuum and difficult conditions for mid-market content.

Force #1: Network Effects of Hits

Big IP and entertainment franchises have long been the industry's golden goose. The biggest branded hits will continue to thrive. Hit content benefits from strong network effects. They become self-reinforcing attention machines. For instance, Taylor Swift gets a lot of media coverage and visibility because of her status. That media coverage increases her exposure, feeds the attention machine, and grows her status further.

The proliferation of social networks and online aggregators is a two-edged sword for creators. For most, it means trading revenue for distribution. Social platforms build strong network effects, but the value accrues to the platforms because of content lock-in and unfavorable revenue sharing (if any) for creators.

For big IPs, it's different. Even exposure on these platforms feeds the network effects of the IP itself, and the IP accrues attention and value, regardless of platform. Monetization can happen in other avenues (live concerts for Taylor, movies for Disney, etc.).

The network effects of hits will continue to accelerate as we continue our march towards living online-first, globally connected lives.

Further, the point of IP capturing the value of its network effects is also interesting because a new technology shares the same trait: NFTs. What is the value of network effects squared? 

(A topic we'll explore in an essay later this spring)

This doesn't mean that it is the same IP that continues to thrive forever. As consumer behavior and preference change, it allows for previous stars to fade and new ones to rise. The mechanic will be the same. The breakout hits will be big and get bigger and continue to vacuum attention from the mid-market.

Force #2: Infinite Content

At the other end of the content spectrum is the niche content. Thousands, millions of different niche verticals of varying sizes. From indie horror movies to TikTok accounts about cooking Korean BBQ. This is where the content creator economy lives. While some traditionalists will say that this content is not the same as the "professional" content that resides on the opposite side of the spectrum, let's remember what we discussed in the intro: all content competes for the same constrained resource: time.

The primary benefit of this content is that the consumers are passionate. You watch Marvel movies because of their social status and attention. You watch all those knitting TikToks because you f*cking love to knit.

There's a lot of niche content. Soon it will be infinite (or close to infinite). 

This is where we'll see generative AI impact first. It's a technology unlock that will enable more creators to create more niche content with less complexity, efficiency, and higher quality (read it again).

Why spend your time-consuming content that is of medium quality and vaguely interesting if you instead can watch something you really, really love?

(Sidenote: This also creates massive upstream opportunities in discovery and curation.)

As this type of content reaps the benefits of efficiency and is combined with new types of business models, it will make it sustainable for more niche creators to build small content businesses surrounded by a passionate community. It's the thousand true fans theory in effect.

This force drives attention from the middle of the spectrum towards the opposite end of hits and thus completes the gap and creates the barbell.

Mid-Market What?

These forces will increasingly move consumer attention towards global phenomena and the niche content that hits their passions on the other end.

What, then, about (all the) mid-market content?

Mid-market is the content that is neither big enough to benefit from network effects nor targeted enough to build passionate audience communities. These forces will create diminishing returns for this content because it will exist in an attention-deprived environment.

All is not lost, but a lot of creators in this middle tier will fail. They will fail by making one of two mistakes:

• Carry on as before to work "through it." This will not work because the forces described above are too strong to "work through".

• Recognize the dynamic, overestimate their content's potential and get burned by moving in the wrong direction (attempting to force hits).

The content creators that succeed will find ways to leverage these dynamics beneficially. They will make the bet that it's better to niche down and create a passionate community. They will choose the depth of engagement over the breadth of distribution (because the latter will be futile). New business models will enable these creators to monetize content vertically along the engagement axis rather than opting purely for shallow and wide monetization (like all-you-can-eat streaming buffets).

These creators will also use the technology at hand to become more efficient so that the cost of content matches the new reality of targeting a smaller, passionate community. They will use technology to build direct relationships and monetization channels, increasing their margins.

New Opportunities

In the future, what was the mid-market will be a gap. A chasm to cross for niche content to become a global phenomenon. We will see some content communities grow from niche and cross that chasm. These are the future entertainment franchises. They have a special capability in that they are internet-native: organically networked and global from day one.

These content ecosystems will eventually grow their own internal content maps containing big hits, mid-market (transitory), and niche (branches of community-driven creation) content.

For the rest, the time to adapt is now. Adapting means recognizing opportunities. Unfortunately, it also means recognizing opportunities that are no more and adapting accordingly.

Hit me up on Farcaster if you want to chat about this: @brg

Key Takeaways

• Disney's patent filings explore blockchain's role in its future strategies.

• Innovations focus on merging online-offline experiences and enhancing interactivity.

• Disney's blockchain exploration could guide other brands in digital engagement.

• Strategic investments signal Disney's shift towards immersive digital ecosystems.

• Patents propose NFTs to unify Disney experiences, offering personalized fan interactions.

A few weeks ago, I found Disney patent filings about NFT technology, which led me to explore the Google Patents rabbit hole.

Did I read them all? Yes.

It paints a picture of Disney’s (potential) onchain future.

In this post, I'll piece together insights from these applications and make educated guesses for the world's biggest entertainment conglomerate.

Understanding how Disney plans to use blockchain technology is valuable for several reasons.

• It can inspire and set a precedent / playbook for other brands.

• Moving towards a future state of the internet where users have more ownership requires attracting more people. That happens through a) a relevant value prop and b) distribution. Disney has the latter, and they can create the former (if they execute well). This benefits everyone building in the space.

This post comes a week after Disney announced a $1.5B investment in Epic Games (creator of Fortnite) and a partnership to “collaborate on an all-new games and entertainment universe that will further expand the reach of beloved Disney stories and experiences”.

Unrelated to NFTs, it lays a solid foundation for this essay. The announcement signals Disney's adaptation to changing consumer behaviors and shifting attention to digital platforms and economies.

An NFT strategy is another vehicle for that.

The Pre-Show

Before discussing the patents, let’s set the stage. Disney has done some experiments with NFTs already. Three major ones relate to digital collectibles.

• Collectibles on VeVe platform

• Collectibles through Cryptoys partnership

• A Disney Pinnacle app in partnership with Dapper Labs (still in beta)

It’s natural for the first experiments to be simple, familiar (merchandise) and safe (third party).

"We forget, in our generation, that things don’t have to be physical. They can be digital, and they have meaning to people. And as long as that meaning can be essentially substantiated in a blockchain, I think you’re going to see an explosion of things being created, traded, collected in NFTs."

Bob Iger, Disney CEO (again)

These initiatives don’t have utility or connection to the broader Disney ecosystem (for now).

For the company to succeed with a broader NFT strategy, it must incubate it from within and integrate it into its ecosystem. The patents suggest the company is on its way.

Instead of listing patents, I’ve created a few themes for us to explore:

• Online-offline experiences

• Location-aware NFTs

• Interactive stories

• Digital collectibles

• Loyalty and customer journeys (onchain-offchain)

Disclaimer: I refer to “patent” throughout this essay, but that is shorthand for “patent application”. All insights were derived from pending patent applications, and as far as I can see none have been granted (and maybe never will).

Online-offline experiences

The Disney ecosystem is a huge digital-to-physical experience, from movies and TV shows to theme parks and toys. Despite being one company, I imagine the tech stack powering everything from Disney+ to theme park ticketing is fragmented and complicated. Operating globally adds complexity, and distribution channels like the Apple AppStore and other platform dependencies also add to it.

As far as I know, Disney doesn’t have an ecosystem-wide loyalty program that connects every consumer touchpoint, digital and physical. But they should. It’s likely part of their NFT strategy (more details in the last theme).

A common counter-argument against using blockchain technology is “you can do it without blockchain”. This is an example where that argument applies. It could be done, but it's impractical, maybe even unrealistic. Using a public ledger and a standard (like NFTs) is easier.

Many patents focus on how NFTs can connect the fragmented touch points of the “Disney experience”.

One patent describes “Linking onchain assets with off-chain systems and accounts”. The application mentions mechanisms that enable actions like watching content on a streaming platform, attending an event, or being at a certain location to issue an NFT or modify one that’s already in a user's wallet.

This could be done by linking a wallet and a Disney+ account, or an app experience where you scan a QR code after a movie on your TV screen and it's recorded in a “loyalty NFT” in your wallet.

Location-Aware NFTs

Theme parks are big money-makers for Disney. Enabling tailored and memorable park experiences is key. Some patents point to this, from blockchain-based digital tickets (preventing fake tickets and enabling tickets as data points in a broader loyalty experience) to the more esoteric:

Tailored real-world experiences based on held assets

The patent describes real-world experiences that adapt based on assets held (or actions taken) by a wallet. For example, an “Iron Man” menu item revealing itself at a theme park restaurant, but only if you watched all the movies on Disney+.

Location-Specific Mints

Describes using on-location camera footage (e.g. sports event, photo from a ride etc.) to mint a memory NFT. It goes further, describing how two patrons in the same place at the same time can “collaboratively engage” and combine their minting experience to collect special “group NFTs”. This gets fun when you imagine that taking special actions like these could unlock something exclusive (like behind-the-scenes footage unlocking for your Disney+ account).

Collectibles – Digital and Physical

As we covered, Disney has ventured into digital collectibles already. It's a massive opportunity for the company if done properly.

IP and NFTs share a similar trait: network effects accrue to the asset, regardless of the platforms and formats used to distribute and consume.

Combining the two creates a potential super-vehicle to make intangible value tangible. Disney may have the most untapped intangible value in the form of brand, character and story affinity among fans in the world. An abstract gold mine.

Succeeding with digital collectibles requires making them matter. Early Disney digital collectibles exist outside the broader ecosystem, and in this context, doesn’t matter (beyond ownership).

When a fan holds a digital collectible, it should tailor other experiences in the ecosystem. NFTs can have levels of utility. A Star Wars collectible could also function as a ride ticket when you visit a park. And the ride ticket could level up the collectible. This is the kind of interplay the company should create with its collectibles. It’s consistent with what we previously discussed about entertainment franchises building character-first loyalty experiences.

One patent emphasizes the importance of sinks for NFTs and tokens; Incentives for collectors to burn NFTs for some other utility or value. The patent suggests this is important to prevent value dilution over time as more NFTs are issued. Disney is already considering NFT ownership to be value accretive for the fan-owners, and that maintaining stable and healthy marketplaces is important. That’s a good signal.

Toys With Brains(?)

Another patent on this topic taps into the relationship between physical and digital objects. Merchandising is a big part of Disney’s business, and we’ve already seen them start to bring the value of collecting to the digital realm.

In the web3-native world, Pudgy Penguins have successfully dropped physical toys with a digital connection; scan a QR code to create a wallet and redeem a digital collectible.

Disney’s patent describes taking this a step further: enabling physical objects (like toys) to change behavior based on digital cues. For example, a toy Iron Man with a chip inside that connects to a user's mobile wallet. If you went to a certain location to collect an NFT or saw a certain show episode, it unlocks a new ability that you can transfer to your physical toy. It’s a fun design space to consider.

Interactive Stories

Some patents open the door for interactive and gamified stories, where the content is adjusted based on user actions. It’s not a space I’m particularly excited about, so I won’t spend much time here. It’s my personal preference (obviously), but multiple-choice, scripted content with fixed outcomes is a faux participation mechanic. I’m more bullish on IP brands letting fans participate by building and remixing on top of the IP. There aren’t any indications of Disney going in that direction, though.

Customer Journey & Loyalty

The initiatives and NFT applications have a common element: using NFTs to connect fan engagement and actions across the ecosystem in one place; a blockchain-based wallet controlled by the fans.

One patent focuses on digital wallets in general, while another delves into loyalty to describe a wallet that generates a visual composite based on its contents. I envision this coming together as a wallet for collecting and engaging across the Disney ecosystem. As you add different contents, the visual badge/membership card representing your wallet changes character (color, material, tier, etc.).

This could become a collectible itself, and a social signaling object.

The patent can also describe character-based wallets where the assets can customize the wallet's visual. Imagine a wallet “in the shape of Elsa from Frozen,” its contents: different dresses and skills.

Worthy Mentions

As we wrap up, there are a few other things worth considering.

Technology stack

Which blockchain network(s) Disney would consider for their NFT initiatives is an interesting question. The patents reference different solutions: Ethereum, layer 2 scaling solutions (non-specific), EOS(?!) and “private enterprise blockchain networks”.

Disney's current initiatives are already dispersed across different blockchains. VeVe collectibles are on Immutable (Ethereum layer 2). Disney Pinnacle and Cryptoys are on the Flow blockchain.

This leads me to my next point.

Early collectors

As Disney potentially launches new NFT ventures, I hope they recognize the value of early adopters and bring them into the fold. It would be a mistake if the first generation of collectibles end up as disconnected and forgotten initiatives.

Gaming

There’s a patent that references gaming with onchain assets and “battle scores”. I didn’t pay much attention to it, considering Disney’s limited direct gaming exposure (but maybe I need to reconsider based on the Epic announcement?)

In Summary

Let’s summarize this. Disney's early exploration of NFT technology is the “NFT as product” approach. Nothing wrong with that, but it only taps 1% of the potential. The patents indicate a shift towards a more comprehensive approach, “NFTs as connectors”.

I tried my best to illustrate below:

I bet Disney will create a unified customer identifier that's wallet-based and runs on blockchain, likely branded as a Disney wallet considering the absolute need to make it user-friendly for a wide audience.

We'll see more NFT-powered initiatives that connect to the idea of ecosystem-wide loyalty and tailoring. Your Disney theme park tickets go in the wallet. So does the NFT you collect from going to the movies. And so on.

While the themes and examples aren't groundbreaking alone, the big opportunity is to have a foundation that enables Disney to create connections between the various parts of its ecosystem. When done right, this will create moments of tailoring that feel unique and special for consumers.

The opportunity for Disney is immense because they have massive distribution and amazing IP. It also makes it incredibly difficult to execute flawlessly.

It may also be that they don’t do anything, and that these patent applications just end up unused and forgotten. We’ll see.

Hit me up on Farcaster if you want to chat about this: @brg

For reference, these are the patents mentioned in the post: 

US020240013233A1,  US020240013196A1, US020240013179A1, US020230114235A1, US020230037296A1, US020230127351A1, US020230169492A1, US020230195855A1, US020230297345A1, US020230376572A1, US020230410066A1. 

Key takeaways

• Success hinges on deep fan engagement.

• Loyalty programs should center around characters.

• NFT technology enables seamless cross-platform loyalty experiences.

• Character-first loyalty schemes personalize fan interactions.

• Continuous fan retention is crucial in a competitive market.

As our access to quality content keeps increasing, the hits will get bigger, and the tail will get longer. We discussed this in a previous piece. The most successful entertainment franchises of the future will be those that double down on fandom.

Doubling down on fandom means cultivating relationships with fans that go beyond single pieces of content. Fan passion is not time or format-constrained, and the way franchises harness fan relationships shouldn't be either.

It also means connecting different fan touchpoints across platforms into one singular fan experience.

And, it should happen via the vector where the fan passion is the deepest: the characters and their stories.

Here's an exploration of what it could look like:

Character-First Loyalty

The power of enduring entertainment franchises is the characters and the stories we connect with. We love to see them return and learn more about their stories.

So, when entertainment franchises want to get serious about nurturing fandom and creating "loyalty programs," those should be from the perspective of characters.

Let's take the Trolls franchise as an example, which recently released its third installment; people generally don't care that the studio behind the franchise is DreamWorks.

People care about the Trolls universe. And more specifically, people will typically have a favorite character in that universe.

It's from this perspective we should design the loyalty schemes.

Not a DreamWorks content loyalty program.

Not a Trolls loyalty program.

But a Poppy (main character) loyalty program.

And a Cooper (another character) loyalty program.

These loyalty experiences must also evolve and adapt to each fan's engagement and actions.

So it's not one Poppy loyalty experience but thousands of dynamic such experiences. Each for one fan that selected Poppy as their fave.

And those loyalty experiences should expand from character to franchise to studio level. From characters and outward.

An Example

Barring current technical obstacles (and there are many), here's a hypothetical example of how such a loyalty program could play out:

You go to the movies to see the latest Trolls movie.

Later, you're invited to use the ticket to redeem a digital "Poppy Club card" that serves both as a loyalty marker and memorabilia from the movie event.

This Poppy collectible allows you access to a specific area of the Trolltopia Roblox experience. You get to open a loot box with Poppy hair for your avatar. It also contains a discount voucher for a Poppy plush toy.

All these engagements and touchpoints are recorded to your "club card" and evolve with more unlocks.

Like access to a secret Poppy-special-ending to the movie when it hits streaming services. Only accessible for club members.

So far, the interactions and rewards are character-based. From there, it can expand outward: discounts to theme parks, skip the line for Trolls specific rides, etc.

And, naturally, you get invited to a special pre-screening for the (inevitable?) fourth Trolls movie. Exclusive to friends of Poppy, of course.

Where NFTs Come In

The biggest practical challenge with executing something like the above is the technicalities of tying together engagement and access across different formats and platforms.

This is a perfect problem for NFT technology to be the solution.

The Poppy collectible club card would serve as a loyalty marker and identifier across different platforms and contexts.

Leveraging the inherent openness, accessibility, and interoperability of blockchain-based tokens.

Interestingly, Disney is already experimenting with digital collectibles in partnership with Cryptoys. So far, they don't have any utility or connection to the broader Disney ecosystem. But, in the future, they could.

As the competition for consumer attention intensifies, there's no doubt that entertainment franchises have to move from considering fandom an afterthought to considering it a core part of the franchise itself.

It's shifting to think more about continuous fan retention.

And it should start by honing in on the atomic units of the franchises that people care about the most: the characters.

(This essay was first published October 26th, 2023 on in-transit.xyz)

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• Farcaster: @brg

• LinkedIn

Key Takeaways:

• Farcaster is a decentralized social network allowing users to own their social graph.

• Frames, a new feature on Farcaster, lets developers run apps inside social posts.

• This innovation blends social interaction with commerce and gaming.

• Frames could simplify actions like newsletter subscriptions directly from the feed.

• The web3 foundation of Frames enables unique commerce experiences based on user identity and wallet activity.

Occasionally, a web3-powered product gains momentum and crosses the chasm into the mainstream. There’s a transition like that happening in real-time now, introducing an important invention that showcases the power of web3 technology and hints at the future of ecommerce.

Let’s dive in.

Setting the Stage

Have you heard about Farcaster? It’s a sufficiently decentralized social network. Huh? Let me explain.

Imagine you’ve built a network of followers and people you follow on Twitter/X. You grow tired of the Elon Musk antics, and want to move on, but you can’t because all your data and followers are locked in. You can’t bring them with you.

Farcaster (in its current iteration) is like Twitter/X in content and format. The big difference is that the social network and the client(s) you use to interact with the network are separated.

Farcaster is an open protocol where users retain ownership of their social graph.

Warpcast is a client for consuming and posting content. It’s built by the same team, but there are other clients, too. If you want to switch from Warpcast to Supercast (a different client) you…just do it™.

Your username and follower graph moves with you. From one client to the next. Because that data is yours. You own it.

The Farcaster protocol achieves this through onchain (blockchain-based) systems and off-chain data hubs.

In the illustration, Farcaster seems more complicated. Twitter/X bundles data and client interfaces in one box (controlled by one company). The Farcaster protocol decouples the pieces. Yet, it’s not more complex from a user experience perspective. Users interact with the client interface(s). Everything below that is infrastructure users don’t have to interact with directly.

The Farcaster protocol isn't free. You pay an annual protocol fee of $5 and pay for data storage. One unit of storage (covers 5k posts, 2.5k likes, and 2.5k follows) costs $7. When you run out, you buy more. Farcaster is currently subsidizing onboarding costs for users in many countries.

I assume the fees are to discourage bots, prevent spamming of the network, and to not become reliant on ads for revenue.

(Read more about sufficient decentralization in the Farcaster founder’s own words here)

Let’s move on. This isn’t meant to be a technical post about Farcaster (there are many others). But it’s necessary to understand the basics of what makes Farcaster different to follow our later discussion.

Farcaster has been around for a few years. I’ve had many interesting conversations there, but it’s generally been a niche hangout for crypto people.

A few weeks ago that all changed. The team released a new feature that attracted a lot of attention, and now the daily user graph looks like this:

What happened?

Frames on Frames on Frames

The Farcaster team released a new feature: Frames. It enables developers to run small applications inside content posts on the social network.

Every popular social network introduced a novel content format to rise: Twitter (140 character text), Instagram (video), Snapchat (ephemeral messages), TikTok (short form video).

Farcaster just introduced a new content format that can be described as anything.

An app runs inside a frame in a post on Farcaster. It can present visuals and actions (buttons) to the user, who can interact without leaving the Farcaster experience.

Incumbent social networks have attempted to make deep platform integrations to enable similar cross-platform actions (Spotify and Facebook comes to mind). Most of these attempts have failed for a few reasons.

• They require trust between the two integrating parties

• It’s selective; Facebook decides who can build a plug-in or gets access to specific APIs.

With web3 technology, it’s different. Software that runs on blockchain networks is open (everyone can access), trustless (not dependent on multi-party trust), composable (build software on top of software), and enables users to own digital objects (like data).

The Farcaster team introduced a new format, but it's the developer community that will experiment to figure out its usefulness.

Frames ignited massive attention and user growth lately; a new technical unlock is like a moth to a flame for devs.

And people are building a lot of things. Fast.

Among the Frames seen so far, there’s an instant check out for girl scout cookies, and a Frame where users can play Pokemon together.

The current state of Frames (it’s only been a couple of weeks) makes me think about this Chris Dixon quote:

The next big thing will start out looking like a toy.

What Can Frames Do?

Consider the current state of social networks. There's a clear distinction between what happens on the platform and off the platform. Frames blurs this line. And it blurs without intermediaries deciding what goes and what doesn’t.

Imagine that you want people to signup for your newsletter. On Twitter/X/LinkedIn, you need users to click a link, open a page and input their email address. With Frames, it could be a "Subscribe" button in the feed. One click, right from the feed. Done.

Let’s consider what Frames could unlock beyond the toy-phase.

Last year I wrote an essay about the blurring lines between content and commerce (You can read it here if you want). From the essay:

Consuming content from creators online is like a proxy for vertical product discovery for consumers.

And further:

Consuming content and engaging in commerce are decoupled, siloed online activities. At the same time, content is becoming an increasingly important top-of-funnel for commerce.

Finally, making this point towards the end:

In the next few years, we’ll see a shift towards headless online stores, as the focus shifts to products as the atomic unit of importance. And that unit will be distributed through a fragmented set of creator channels.

Frames is a new lego block that the web3 space has been waiting for. In a recent podcast, the same Chris Dixon referred to cannon events - events so powerful that they happen in all the different universes in a multiverse, like Peter Parker being bitten by the spider. The launch of Frames is a web3 cannon event.

It’s Cool Because it Works Together

Frames are capable because of the context they exist in. It's a primitive on top of Farcaster, a blockchain-based protocol. Users connect to Farcaster with a wallet, making digital value, identity and reputation/activity available.

This could enable one-click checkout directly from a social feed; Value flows from your wallet to the Frame creator as payment, an identity object in your wallet is shared to reveal the information necessary for the merchant to process the order, and so on.

And there’s more. The price or availability of a product in a Frame can be tailored based on the consumer and her wallet activity. For instance, a Frame serving pre-sale tickets to a popular show can activate only for consumers with a certain membership NFT in their wallet.

This stack can also solve affiliation and attribution challenges in marketing. A product sold through a Frame could automatically split that payment and send a fee to the users that shared the Frame and the client interface that displayed it (Something that should be especially relevant for marketers as third-party cookies are fading).

Again, Frames alone do not enable all of this. Frames are a new distribution channel that leverage all of these other capabilities of web3. The sum is a new commerce stack.

It will be very interesting to see how this evolves over the next weeks and months. What Frame-based products are built, and how fast it moves. I wouldn’t be surprised to see the Frames becoming a content standard supported across various products and services powered by web3 where the same capabilities and context are available.

Until next time.

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• Farcaster: @brg

• LinkedIn

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Key Takeaways

• NFTs enable participatory experiences and ownership in entertainment, deepening fan engagement.

• Ownership and financial incentives through NFTs enhance community belonging and network effects.

• Successful franchises of the future will integrate participation and ownership into fan experiences.

• Pudgy Penguins exemplifies transitioning an NFT collection into a mainstream brand with community ownership.

• Community-owned brands, like Pudgy Penguins, offer novel ways to grow and incentivize engagement through shared IP rights and royalties.

Blockchain technologies like NFTs enable brands and entertainment franchises to create new, participatory experiences for fans. It’s a valuable opportunity in a world where content increases and attention is scarce.

This is a powerful concept. When we're passionate about something, we want to engage with it. More passion, deeper engagement. Enabling fans to participate and take ownership pulls them deeper, and creates incentives to contribute, expand and grow.

It unleashes interesting network effects. Owning triggers a stronger sense of belonging. Adding a financial incentive makes it stronger.

In an NFT-powered brand, every object in the ecosystem becomes network nodes, whether NFTs from a collection or derivatives like physical toys. Some network nodes are owned by the community. As an owner, you’ll want to display your node, and that attention feeds and benefits the brand network as a whole.

The most successful entertainment franchises of the future will incorporate participation and ownership activities into the fan experience. I wrote about this in a previous piece, “The Spectrum of Entertainment Participation”.

How can an entertainment brand build from community ownership, and what does it look like in practice? There aren’t many concrete examples (yet), but today we’ll explore one.

Meet the Penguins

Pudgy Penguins started as an NFT collection but is quickly becoming a mainstream consumer brand.

In short, the history goes like this:

Pudgy Penguins launched as one of many “profile picture collections” during the 2021 NFT hype. The original collection consists of 8,888 penguin pictures.

The project lacked proper leadership and long-term plans (like many NFT projects of that era), like a rudderless ship filled with passengers.

Luca Netz, a brand and digital marketer, bought the project from the founder in April 2022 for ≈$2.5M and relaunched it.

Since then, Luca has orchestrated an exemplary brand building exercise that will be a reference for many.

He built a strong social media presence (1.5m+), launched a toy collection in 2000 Walmart stores (selling 750K+ items in 7 months), and announced Pudgy World, an online game-world set to launch this quarter.

Growing with the Community

Most NFT projects from the '21-22 class are struggling today. Many were never launched as lasting ventures, and those that did lacked business plans and models. Or, with a faulty business plan at best.

NFTs can enable the creator to collect royalties on secondary sales (if the marketplace honors the claims, but that’s a different story).

This is an innovative feature for digital objects, but it also misled many NFT brands to pursue an unsustainable path.

They tried to build businesses based on secondary sales volume. The problem: If you’re building a community-oriented brand with ownership at the core, but monetizing secondary sales, you're monetizing churn.

Most businesses thrive on retention. These NFT projects were designed for the opposite.

Pudgy Penguins took a different path, one that requires more effort. Building a community-owned consumer brand requires a thoughtful approach of adding layers, like a funnel, with NFT collectors at the bottom.

(From: “The Spectrum of Entertainment Participation”)

This creates a journey that consumers can traverse as their engagement increases (or if it doesn’t, stick to the level you’re at, which is also fine).

For this to be community-owned, some value must also accrue to the community.

Licensing IP from the Community

Pudgy Penguins uses characters owned by the community to create products like toys or videos. The company licenses these characters and pays royalties to the owners.

This is an interesting and novel concept. It’s so novel that Pudgy Penguins built their own platform, Overpass, to orchestrate the process:

The company is currently sourcing IP for their upcoming second toy product line. Any penguin owner can submit it, and if selected, see their penguin become a physical toy (which is cool in itself) and collect a 20% royalty.

There’s also a gamification element where owners collect secondary items (fishing rods) that adds multipliers to the royalty percentage.

As the brand grows, it will create more merchandise and consumer touch points, leading to more licensing opportunities for the community. This process potentially creates an interesting flywheel, with a different incentive and motivation structure than a traditional entertainment or consumer brand company.

This isn’t limited to Pudgy Penguins licensing from their community. In the future, anyone can post opportunities. This could be a brand tapping into the Pudgy Penguins vibe to launch a soft drink. When the soft drink launches, it adds value to the Penguin network, too.

The Overpass platform is built to accommodate other NFT collections looking to grow in a similar way (creating a secondary, software revenue opportunity for Pudgy Penguins in the process).

Wrapping up

Pudgy Penguins is leading the way, turning a theoretical idea (community-owned brands) into practice.

This is different from the traditional top-down approach of consumer brands and entertainment franchises. It’s the approach that I’m convinced will yield the most successful such companies in the future.

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- Farcaster: @brg
- Twitter 
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Key Takeaways:

• Wallets allow carrying digital assets, changing internet experiences.

• Declining third-party cookies require new marketing approaches.

• Wallets personalize merchant-customer interactions; customers control data.

• Wallets redistribute value, like Brave browser's BAT token and ad network.

• Blockchain and wallet integration offer unique marketing opportunities.

One exciting aspect of web3 is the new consumer internet experiences that wallets unlock. This will be more important as the structures that existing digital marketing and online customer relationships are based on start deprecating.

Let’s explore.

Summary of wallets

With a digital wallet we can interact with blockchain networks to store crypto tokens and digital assets like NFTs. We can also use it to securely sign transactions, and authenticate our identity on these networks.

I prefer this analogy:

Wallets are like online backpacks.

The internet is a massive online world. We travel from destination to destination, but for the most part, we can’t bring our stuff (data) with us from one place to the next. Our stuff is kept by the companies that control the different destinations.

Your friend graph is stored with Instagram/Meta. Your music preferences are with Spotify, and so on.

Backpacks (wallets) enable the internet destinations and our experience to shift. We get to put stuff in our backpacks and travel hope between destinations while bringing our backpack.

This unlocks a huge new design space for online (and offline) experiences.

Why Marketers Should Care (a Lot)

Let’s look at a highly practical and actual example of where wallets will come in handy in the very near future.

I wrote in a previous post that “the internet runs on user-generated content” (in “UGC, Upgraded”). I want to adjust that statement:

The internet runs on UGC and third-party cookies.

If you work with online marketing, it’s likely that your strategies and tactics are highly dependent on third-party cookies. They’re the lifeblood of every online ad network.

You know when you search for a hotel on Expedia, and later hotels for that destination show up in your social feed on Facebook/Instagram? Third-party cookies make it happen.

The problem is that third-party cookies are privacy challenged. Ad networks are built on the idea of collecting our data and monetizing it.

This paradigm is coming to an end and will alter the digital marketers' stack and strategy significantly.

Early this year, Google started blocking third-party cookies by default for 1% of its Chrome browser users. This will eventually become the default for 100%. Apple has been battling cookies for a few years already.

For marketers and brands, it’s wise to start planning for this cookie-less future sooner rather than later.

One such path leads to web3-enabled customer experiences, and wallets are key in that value proposition.

Wallet-Powered Experiences

Wallets make online experiences more human-centric. As a merchant, you don’t collect data about your customers (directly or indirectly via third parties like ad networks) to utilize. Instead, the customer owns her data and you have to create appropriate incentives and value propositions so that she wants to share some of that data with you.

For instance, a retailer can give a customer the opportunity to collect an NFT when they buy a product. This token then becomes an identifier between the retailer and customer. The customer can identify with their wallet later; the retailer reads the NFT and offers a related discount.

Since this all lives on a blockchain, a public ledger, it’s completely untethered from specific platforms. It can work across different ones, and across online and offline destinations.

In the past few years, we’ve seen a surge in consumer brands experimenting with web3-based, wallet-powered loyalty programs. Fashion and lifestyle brands like Adidas and Nike, coffee powerhouse Starbucks, and many more have all explored this avenue. Only a few weeks ago, Visa launched “a web3 loyalty toolkit” in partnership with SmartMedia Technology. The plan is to eventually enable all merchants on the Visa network to build their own loyalty solutions.

This is the beginning of a meaningful shift in how the internet works, including how companies use it, the business models we deploy, and how we experience it as consumers.

Unlocking New Value

Ownership of digital assets is the core unlock of wallets (or backpacks). What’s in your wallet, you own. This goes for data, and for money, but can extend beyond that to other kinds of value.

As we’ve discussed in “Onchain Fandom” and “Investing in Internet Culture”, this technology has the power to make intangible value tangible. The world is full of intangible value that’s difficult to define and measure, like brand value.

We’ll revisit this later in a high-level thesis on intangible/tangible value, but for now, let’s consider this:

The smartest consumer brands will leverage this power to bring their customers closer, to blur the lines between passive consumer and active participant – owner.

Redistributing Old Value

A wallet-enabled internet doesn’t just unlock new value, but can also distribute existing value in new ways. The Brave browser is an interesting example to consider. It’s a privacy-focused web browser that comes with a built-in wallet for every user.

Based on this foundation, Brave has built a decentralized ad network. It’s powered by an Ethereum-based token, BAT.

The browser blocks traditional ads, but users can opt in to see privacy-respecting ads from this ad network. When a user does, she will receive BAT tokens as rewards for engaging with ads.

Let’s pause and consider this.

In the ad-based internet economy we’re used to, the users – us – are not part of the value creation from ads, even if those ads would have no value without us.

It creates an interesting dynamic where users browse the web, accrue BAT tokens as they go. These tokens are owned in the in-browser wallet. Users can then use these tokens to tip content creators and pay for services.

It’s a very interesting proof of concept for a few different reasons:

• Redistribution of value

• Turning intangible (time) to tangible (BAT tokens)

• Fluid, integrated online commerce (no need to whip out that Visa card and punch digits!)

(You can also exchange your BAT tokens for dollars and spend them elsewhere)

The Marketer’s Opportunity

This is how the internet will work in the future. Marc Andreessen (founder of Netscape, now of venture powerhouse A16Z) has said that the original sin of the internet was not to build economics into it.

Blockchains and wallets fix this, finally.

For marketers, this is a generational opportunity. This impacts both strategy, tactics, and tools. And it will create a massive gap between those “that get it (early)” and those that will chase later.

I still vividly remember when I worked for a design agency early in my career. My job was to design and build websites. Most agencies in our region did not have the capacity to do that in a cost-efficient way. And that differentiator created a lot of business for us as everyone realized they needed websites, ecommerce, and so on.

This is the same kind of opportunity. Maybe bigger.

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Key Takeaways

• Onchain fandom unifies and measures fan engagement across platforms, enhancing value creation.

• Direct access to comprehensive fan data reshapes personalized artist-fan interactions.

• Data fragmentation is eliminated, creating a more cohesive and actionable fandom graph.

• Onchain fandom enables unique opportunities for cross-industry collaborations and marketing.

• Transitioning to onchain fandom requires time and collaboration between new web3 platforms and traditional data holders.

Fandoms drive the entertainment industry. Strong fandoms are easy to observe but hard to measure.

How do you measure Taylor Swift's “fandom energy” aggregate value?

The concept of fandom is interesting because it exists abstractly. It’s comprised of data, actions, and engagements that’s highly fragmented.

Bringing fandom onchain can enable better experiences for all involved, more value creation, and ultimately better value capture.

Let’s explore how.

What is Fandom?

Fandom refers to the collective group of fans enthusiastic and supportive of a particular subject (books, TV shows, movies, celebrities, artists, etc.).

"Fandom” is a blend of two words:

1. **Fan: “**fanatic”, indicating intense, enthusiastic devotion to something.

2. -dom: Old English term indicating a state or condition, often collective, like "kingdom."

To have a fandom, you need fans and a means for them to belong to a collective based on shared enthusiasm.

There’s more to it, though. You’re a fan of something, right? You likely have a favorite artist, or several. Perhaps you enjoy a sport, like soccer or hockey, and have a favorite team and players.

Being a fan of one thing does not exclude other interests.

Multiplying Fandom

Consider one fan's total “fandom energy," often distributed across their various interests. Let’s consider this the levels and dimensions of fandom.

We can go further and illustrate a fan's belonging to different fandoms like this:

It resembles a graph, a network with nodes—the fandom graph.

We could add complexity by considering different levels of fandom, too. But let’s keep it simple for now.

This fandom graph is theoretical, not practical.

The Fragmentation of Fandom

The actions fans take and the engagements they show for their fandom produce data. Data that, in aggregate, paints a clear picture of fandom.

However, this data is fragmented and scattered across the internet.Take a music artist, for example:

• Music streaming data on Spotify

• Tour and ticketing data on Ticketmaster

• Merchandise sales data on Shopify

• Social media data across Instagram and TikTok

• Fan club data from Discord or other community tool

The only person who fully understands their fandom is the fan herself. And even she may not have the complete picture.

If Beyoncé tours, she can't provide pre-sale access to top fans based on data from the whole graph. Instead, it might occur through proxies like "fan club members," but fandom and fan clubs differ.

We can create similar “fragmentation-stacks” for movies, actors, sports, and players.

Artists and fans would benefit from organic and accessible proof-of-fandom.

Bringing Fandom Onchain

Instead of the above data fragmentation, imagine this:

A fan creates data by interacting with her favorite artist through streaming, ticket purchases, and social media engagement. This data is stored onchain and it accumulates to her wallet. Where she goes, her data goes.

Since it’s onchain, it’s accessible and aggregable.

Let’s say their favorite artist is Beyonce, and she’s touring.

Beyoncé (or likely her team :-) can segment and identify fans within the entire fandom graph.

• Create an exclusive fan club accessible only with proper proof-of-fandom.

• Grant superfans access to ticket presales based on a set of criteria

• Gift the top 1% of ticket-buying fans an NFT redeemable for free tour merchandise.

Creating a living, evolving, accessible fandom graph enables new fan experiences and unlocks value for artists and fans.

Taking It Further

Bringing fandom onchain solves the data fragmentation problem, transforming the abstract fandom graph into existence and creating new opportunities in the artist-fan relationship.

But, it doesn’t have to stop there.

A person can be a fan of multiple subjects simultaneously, such as various artists or both artists and sports teams. The onchain fandom graph enables exploration and creation of value in overlaps and intersections of the graph.

This can yield interesting opportunities: an artist identifying an overlap in their fanbase to utilize, for cross-promotion for inbstance.

And it’s not just fans and artists who can use this it. Third parties can access the data and get involved. Starbucks could offer free drinks to top Beyoncé fans on concert day as a marketing stunt.

The first-degree and third-party opportunities to evolve the fandom experience through onchain methods represent an entirely new design space. I expect these opportunities to be far more extensive and exciting than the basic examples I've provided.

Getting There

The Onchain Fandom thesis is just that—a thesis. Currently, most fandom graph data isn't onchain. It’s not in a public ledger but in private company databases like Spotify, Meta, Ticketmaster, and others.

Bringing fandom onchain will take time. All three companies are exploring web3 and blockchain technologies, but it doesn’t mean they’re interested in “setting the fandom data free”. Most likely not.

On the other end of the spectrum, new companies native to this new chapter of the internet exists.

Sound.xyz is a platform for streaming and collecting music. Medallion aims to bring the fan-artist relationship onchain. Others are working in this space as well.

This thesis requires patience, but I’m convinced we’ll gradually move in this direction. It will accelerate when artists, players, and fandom subjects see the value unlocked by bringing fandom onchain.

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Key takeaways

• Memecoins represent the monetization of internet memes, turning viral digital culture into tangible, tradable assets.

• Viral memes and memecoins share similarities in their rapid, community-driven spread across the internet.

• While most memecoins are speculative and volatile, some achieve widespread popularity akin to viral memes.

• Memecoins offer a unique perspective on valuing intangible aspects of internet culture, like attention and engagement.

• The concept of memecoins serves as a blueprint for exploring the tangible value of intangible online phenomena, potentially extending to entertainment IP.

Memes play an important part in internet culture.

Internet memes are creative, often humorous content like images, videos, or phrases that spread rapidly online, typically through social media. Memes that go viral evolve, expand, and are remixed by users as they circulate. They are a form of digital culture that captures and conveys popular ideas, jokes, or trends in an accessible, shareable format.

One way to view memes is as cheap, childish fun. Maybe even gibberish.

They can also be seen as concentrated examples of the internet's viral distribution potency.

Imagine owning a share of the most popular memes and earning a fraction of a cent each time someone views them. Cool, right?

You can't; that's not how the internet works. Or, it's not the way it's worked until now.

From Memes to MemeCOINS

Have you heard about the crypto currency called Doge? What about Pepe? Or maybe Bonk or Dogwifhat?

These are cryptocurrencies that fall under the umbrella term "memecoins." Memecoins are the crypto equivalent of memes, as the name implies.

Other crypto tokens can represent ownership in protocols (blockchain equivalent of "owning company stock") or other types of underlying value, memecoins consist of air and engagement.

Many view memecoins as scams, and rightly so. Most will fizzle out like countless memes and GIFs that never go viral.

Some memecoins will go viral. They will spread like wildfire through communities on Crypto Twitter and eventually reach mainstream audiences, intensifying their popularity.

Just like a viral meme, a viral memecoin can go far.

The difference between a meme and a memecoin is that you own a share of its virality. It's speculation, but also an interesting example of what blockchains enable:

Digital value systems that turn intangible into tangible value.

The Blueprint

What is the value of internet culture? Or a viral GIF with billions of views? It’s hard to measure, but it's not zero. Memecoins turn the intangible value of viral internet culture into tangible, tradable assets.

This is not investment advice. Nothing I write is. Memecoins are highly volatile and speculative. Most become worthless.

But if you wanted to invest in the power of internet culture, the power of memes—memecoins make it possible. And it wasn’t possible before.

So, what are we doing here if I won't tell you which memecoins to buy?

We're here to look beyond memecoins' reputation as scams. Memecoins are interesting when considered as a blueprint for making digital value tangible.

There’s much undefined and unmeasurable value created online, like attention.

Similarly, there’s much intangible value in entertainment. What does the memecoin-blueprint yield if applied to entertainment IP, for instance?

This post plants the seed for a framework to explore the intangible→tangible transition enabled by blockchains. A framework we’ll experiment with and develop over time.

Stay tuned.

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