Hello to all our new friends, who signed up assuming this was one of those informative business newsletters about the wonderful world of Web3, only to find that it's the ramblings of a half-witted Carrie Bradshaw wannabe. But, we're still glad you're with us.
Versus
I want to talk about true fans.
I'm a fan of Yoncé. Don't get excited; I'm not going to talk about Cowboy Carter because I know it was an album that divided a nation. I went to her last tour and met a guy who had slept outside the stadium...in his 30s?! I don't know how his back handled it.
He wanted to be one of the first people in the stadium because he'd be the closest person to Bey when she came out. When I asked him why, he said it was all worth it if she looked at him. I can confirm she did, and she winked at him - life made.
MIDiA released a post a few weeks ago talking about their bifurcation theory. It's the idea that two tracks will take the music industry to a market cap of over $100Bn by 2031. These are described by Music X as:
Passive centres around lean-back listening, algorithmic playlists, and DSP subscription revenue. Active centres around lean-in listening, fans as co-creators, and monetizing fandom.
Let's look at how advanced technology and true/super fandom fit together nicely.
I'll start with what Kevin Kelly wrote about true fans in 2008:
A true fan is defined as a fan that will buy anything you produce. These diehard fans will drive 200 miles to see you sing; they will buy the hardback and paperback and audible versions of your book; they will purchase your next figurine sight unseen; they will pay for the “best-of” DVD version of your free youtube channel; they will come to your chef’s table once a month…Now here’s the thing; the big corporations, the intermediates, the commercial producers, are all under-equipped and ill-suited to connect with these thousand true fans. They are institutionally unable to find and deliver niche audiences and consumers.
Anyone looking into the fandom space over the past two years knows that the relationship people want is fan-to-artist. Not fan-to-platform-to-artist. People want direct access to artists. They want to co-create with them, they want to contribute to their journey, and they want the opportunity, in whatever way that is, to interact with them.
The only technology that allows this all to happen is (all together now)...blockchain!
Currently, platforms act as intermediaries between artists and their fans, extracting value from the artist-fan relationship without necessarily providing a fair share of the benefits to the artist or the fans.
This leads to an imbalance in the value exchange, with both artists and fans feeling shortchanged.
Existing platforms are not designed to foster the deep connections that true diehard fans seek.
They lack the features and tools that enable personalised, authentic, and interactive experiences, making it difficult for artists and fans to engage meaningfully. Finally, the current model around the artist-platform relationship limits artists' creative freedom and control over their content, brand, and fan engagement. All of this blocks artists from achieving their full potential and building genuine, lasting relationships with their true diehard fans.
The global fan engagement market is currently sitting at $100 billion.
Through social engagement, fans have utilised tools to voice opinions and show their support. This fan behaviour has become one of the most important measurements of an artist's success. But do artists and their teams really know who their fans are?
Marketing expert Marcus Collins explains that:
We mistake information for intimacy and that’s the data paradox. We have more information about people than ever before, but we don’t know people very well.
So we’re looking at a situation where artists and their teams don’t have the current solution to identify their true fans. Of course, everyone understands the importance of fandom - this is evident from the amount of resources/budget the major labels are pouring into this sector in 2024. Fans are the lifeblood of an artist's brand—the ones who spread the word, share excitement, and support them financially.
Diehard fans have a strong sense of identity and belonging within the artist's fan community. Their relationship with the artist often surpasses mere appreciation for their work; they see themselves as an extension of the artist's brand.
However, artists still lack the full data overview to segment their fans into different categories. Are fans engaging because they love the artist's music, because of who the artist is, because they enjoy their social media posts, because they find them attractive, or because they aspire to be them?
I believe where true fandom lies, so does ownership.
People follow people, not companies, but companies have had the advantage because of the effort required to build global brands and the siloed technology framework.
In Web2, true fans are drawn to artists for intrinsic reasons—simply because they adore their work. Web3 offers something deeper - a sense of psychological ownership and enhanced patronage. Consider Spotify Wrapped, which taps into "psychological ownership" — that feeling of possession or "mineness" over a product or service.
True fans tend to remain loyal and engaged and contribute to platforms that effectively foster the sense of "mineness." Currently, when artists drive traffic to these platforms, those platforms profit from selling that traffic to advertisers, while the artists receive little in return. Psychological ownership is important because it can enhance fan behaviour. It increases loyalty, referrals, and willingness to pay. Artists can harness the “mineness” of true fans by involving them in creative processes will see growth across their brand, sales and, ultimately, a larger true fan pool to engage with. Venture Capitalist - Li Jin reiterates this point:
“Jesse Walden defines “patronage+” as patronage with the possibility of profit, a phenomenon that is introduced through tokenized ownership. Another benefit beyond patronage and investment is membership to a like-minded group of individuals…People are willing to pay high prices for exclusive, differentiated content and access to a network of like-minded individuals.”
Ultimately, this means that for true fans, the possibility of profit will only amplify their incentives to support that artist. This, in turn, will create FOMO with loyal but not yet true fans who also want to benefit from their fandom. Which then creates a wider pool of true fans. Suppose you think about it on a meta-level. In that case, it means if built correctly (👋 like with us at W3M - sorry, it was a shameless plug!), artists could begin to convert all fans to some degree of true fandom, and the consumption of merchandise, tours, and entertainment would only increase. This is a new opportunity that artists didn’t have before in the Web2 space.
Pegged social tokens and/or digital collectibles are already driving a new era of fan engagement, giving artists the tools to connect directly with their most enthusiastic fans and create unexplored engagement streams. For example, through on-chain actions, a true fan can unlock a personalised experience - such as an exclusive track from an artist, special merch, or an exclusive concert. As true fans utilise and acquire intangible assets through on-chain activities, they become both physical and digital entities themselves. Social tokens deepen the intersection of physical and digital experiences and uncover new dynamic and multidirectional interaction methods — where the artist and the true fan are rewarded.
Katy, this sounds great, but where do we start?
Well, first, tune in next week, where I'll be teasing a little about our open innovation plans. But here are just some thoughts about how you can bring AI and blockchain together to make fan magic happen. 🪄
You can use AI to segment the artist's audience by analysing their social media interactions, the content they engage with, and their overall online behaviour. NLP and sentiment analysis can be used to determine the reasons behind fans' engagement, while machine learning algorithms can cluster fans into distinct groups based on their preferences and motivations. Technically, this would involve collecting and processing data from various sources (e.g., social media and websites - these are things that artists' teams can access) and training AI models to identify patterns and classify fans into segments.
Once the audience is segmented, you can then use AI to support artists in understanding, creating, and building their fan groups:
👉 AI algorithms can generate tailored content, recommendations, and interactions for each fan segment based on their preferences and interests.
👉 AI can help spot emerging trends or preferences among fan groups, enabling artists to adapt their content, products, or experiences accordingly.
👉 AI can forecast the likely response of different fan segments to new content, offerings, or events, allowing artists to optimise their strategies and maximise engagement.
👉 AI-powered chatbots can facilitate personalised interactions between artists and their fans, fostering a deeper connection.
Blockchain and AI play so nicely together 🥰 to make this all work:
👉 Analysing fan behaviour and preferences to determine the most appropriate rewards, incentives, or experiences for each fan segment.
👉 Helping automate the minting and distribution of digital collectibles and social tokens based on fan engagement, loyalty, and other metrics.
👉 Utilising machine learning to optimise tokenomics and ensure a fair and balanced rewards system.
The power of Web3 plays into this so easily. You use AI to bring in the right people and convert them to true fans through Web3 frameworks. It’s Web3 that will create a deep sense of psychological ownership and enhanced patronage by involving fans in the creative processes and decision-making of their favourite artists.
An increase in the percentage of true fans would lead to a more stable and predictable revenue stream for artists. It would also result in stronger brand loyalty, ensuring a more dedicated fan base that actively promotes and supports their favourite artist's work.
More on our open innovation ideas next week and how you can get involved in actually executing all of this.
That was a bit of a longer read. If you made it to the end, then...
See you next week,
Katy x
