【vol.2】The Web 3.0 Concept in Entertainment "the important thing is the extent to which the fans can intervene."
Last June, Bandai Namco Entertainment 021 Fund invested in Gaudiy Inc., a company that provides and operates economies for fans of entertainment media using blockchain technology.
Also in June, we invited Bandai Namco Entertainment’s CEO Miyakawa and Gaudiy’s CEO Ishikawa-san to discuss topics such as “Web 3.0” and “fan communities” in order to introduce Gaudiy’s business to the entire Bandai Namco Group.
In Vol.2, Ishikawa-san and Miyakawa discuss how we can apply the Web3.0 concept to entertainment business.
（Read Vol.1 from below）
Kazama
Bandai Namco has various IPs, and Gaudiy has expertise in Web3.0 technology. I think that by combining the two, we can create an active community that connects us with fans and creators.
So I’d like to ask the two of you how we can apply Web 3.0 concepts and technology in the entertainment space. What do you think Ishikawa-san?
Ishikawa
It might get complicated if I talk about concepts and technology, so I’ll start by explaining the structure of blockchain communities.
I’ve observed blockchain communities for about 3 to 4 years before words like “NFT” and “Web3.0” even existed. And already back then, people were getting together in communities as fans of specific contents, and everyone had tokens for each of those contents. It turned out that people in those communities were discussing how to improve the content they love. Whenever there was an update, the participants gave feedback to make the service more appealing.
It was the same in other spaces too. I went to a blockchain gaming event, and the excitement there was quite impressive. Users were passionately watching the matches on a large screen and cheering the players. But the game only had about 10,000 users in total.
I learned that the users were excited because they had tokens for that content. They were active participants in the community who were passionate about improving the content.
In addition, the content makers don’t treat their users as consumers. They consider users as “co-creators.” They understand that fans support and build excitement toward the content through different activities like fanarts, and they use science to realize that structure.
Web3.0 communities are designed so that participants can support and become a relevant part of the content they like. The amazing thing about Web3.0 is that you can scientifically construct this kind of tight-knit community.
Miyakawa
What you just said confirms the fact that my time is up.
Content/IP creators used to do all the work and had their audience only consume the final product. A large part of the creative process is still the same, but maybe it’s time we move on and step into an era of “collective creation.” Of course, some parts will require the creators to make everything from the ground up, but we must work on accommodating this new structure to live up to our vision of “Connect with Fans.”
Ishikawa
I’m thinking that Web2.5 is the way to go.
For example, manga’s storylines would not be interesting if we let the fans decide everything. I believe that so-called “masterminds” with solid leadership should continue producing fun contents. And the important thing is the extent to which the fans can intervene. In the case of blockchain games, fans can’t create original contents. On the other hand, fans can promote the service, or third-party organizations can create derivative works using the original content.
There should be a god-like authoritative figure that produces the original. It’s just that there needs to be a scheme for the fans to get something in return when the content grows or becomes better.
Miyakawa
I see, so there can be an authoritative figure. Because without it we can’t really create good products or services.
Ishikawa
Right, there should always be a god-like figure because I don’t think there will be innovation if we decide everything based on a majority vote.
But there should be people supporting the content, and they should be rewarded for their support, which is why I believe Web2.5 is the best solution.
Miyakawa
I see. That makes a lot of sense.
I thought that in the Web3.0 era, we would have contents created by “the gods” and contents created by everyone, but we can keep the gods and use the Web3.0 mindset to only think about how to give back to the fans.
Well, that’s a relief. I can stay in the industry a bit longer (laughs).
Ishikawa
Yes, we still need you in the industry (laughs).
I think “the gods” will start to have even more power. They’ll be in more demand.
Miyakawa-san mentioned the idea of “freely creating something with fans in an environment where various rights are protected,” and I think that’s the best approach. Many Japanese fans produce derivative works like fanfictions and fanarts, yet our society somewhat stigmatizes those activities.
Miyakawa
I feel that our society enables creators of derivative works to become the gods. That’s quite important. We’ve seen people posting vocal covers become superstars. I would love to create a cycle where the “gods” still provide content, but the fans making derivative works also get rewarded, and some of those fans become the gods themselves.
Ishikawa
I completely agree.
And it’s not just for vocal covers. I’m pretty sure popular manga writers started out by making fanfictions. And yet, producing derivative works hasn’t been encouraged much by society. With something like cryptocurrency, we have a structure to protect and expand, and we can take away that stigma against creation of derivative contents. Blockchain allows us to give back to the fans while protecting various rights.
Kazama
I appreciate your insights.
Now, I want to better understand Ishikawa-san’s idea of giving back to the fans. Like you said, we can use cryptocurrency to do that, but there may be other options. For example, we could just give away Gunplas (plastic model kits of characters and vehicles from the Gundam universe) to Gundam fans. Do we need to use Web3.0 technology to achieve this structure?
Ishikawa
We must use blockchain to connect to a free market and expand the community while protecting our intellectual property.
It’s essential for there to be an incentive to increase the value of the given currency. It might be a little difficult to imagine when you are working for a large corporation, but it’s similar to stock options. It may not be worth much initially, but the employees get rewarded when their company grows big. That’s not the employees’ only incentive, but it connects their actions to a future return of value.
Kazama
I see. So it’s better to reward people as a result of their support instead of giving them money and asking for support in the first place.
Ishikawa
Exactly. Paying for people’s actions will not become an incentive.
Unlike stock options, the value of 100 yen will never become more than that.
People are saying that we will move on from capitalism to “Valuism”. I view capitalism as a game where we all fight to grab as much share as possible from a pool of limited amount of money. You might get paid some fees when you do business, but the total available amount stays the same, and we decide how to share that amount.
On the other hand, the Crypto/Web3.0 era is all about producing value. We don’t fight for something that already has a value of 100 but instead try to turn a value of 1 into 100. We work together and think of how to make a content or community better and more appealing. We all face the same direction instead of fighting to go in different directions.
Kazama
Fans of BTS, so-called ARMYs, are passionately pushing the group to stardom. What they’re doing is more of a spontaneous example, but you’re saying that we can achieve a similar structure by applying Web3.0 technology and concepts. Maybe we could create an environment that incentivizes Gundam fans to promote Gundam even more.
Ishikawa
Right, and activities like that will quickly gain momentum.
When HYBE (BTS’s agency and record label, formerly known as Big Hit Entertainment) went public, ARMYs bought the company’s stock for the first time. They said they wanted to hold on to a part of the group just like other merchandise. If those stockholders help BTS increase their popularity, the company’s stock price will also increase. Things like that are already taking place, and Web3.0 technology can help accelerate them.
Miyakawa
Ishikawa-san’s explanation is very easy to understand.
As you said earlier, current capitalism is focused on grabbing as much share of the pie as possible.
I’m also not interested in doing that, and we at Bandai Namco often talk about how we don’t have to fight for shares in the entertainment industry. I consider entertainment as a process of turning 0 into 1 or 100 and often discuss how to increase the value of 0. So I completely agree with Ishikawa-san’s ideas.
Ishikawa
We can’t create anything cool or interesting if we start by looking at market size and customer base before getting into the creative part.
Miyakawa
Right. We do need to be aware of those analytics, but it makes more sense to start by saying “let’s make something interesting.”
Kazama
Thank you so much.
Now I better understand the potential of Web3.0 concepts in entertainment. Now, I’d like to move on to the discussion of something we’ve been touching upon throughout our conversation: the ideal structure of fan communities.
Discussion continues to Vol.3: The Ideal Structure of Fan Communities
■Overview of Bandai Namco Entertainment 021 Fund
Main investment targets
Blockchain, VR/AR/xR, AI in Japan and overseas Entertainment utilizing technologies such as products and services related to, and In addition, Metaverse, startup companies engaged in Web 3.0-related businesses, etc.Target stage
Companies in a wide range of growth stages from pre-seed to later stageScale of investment
Approximately 1 billion yen per year (3 billion yen over 3 years)Ticket size
10million to 500 million yenOfficial website
https://021fund.bn-ent.net/en/ (English)
https://021fund.bn-ent. net/ (Japanese)