What is Onchain Entertainment?

Welcome to another issue of In Transit. Thanks for being here and a special high five to new subscribers.

As always, you can collect this essay on Mirror.

How onchain technology and culture shapes entertainment long-term.

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.

That’s all for today!

Thanks,

Martin