First Steps in the Participation Economy

In recent years, “fan engagement” has become a buzzword in sports and entertainment. Thanks to Web3, models have emerged that let fans support their favorite teams or artists and even get involved in financing.

When “fan tokens” first appeared, they created a lot of excitement. But over time, we realized that while the idea was genuinely creative, the model often ended up being one-sided in practice and in involving fans:

Fans contributed financially, but didn’t really have a say or experience the two-way interaction that was intended.

As Marc Baumann highlights in his report “The Future of Fan Engagement,” the future model is built on two-way participation. Fans aren’t just spectators or consumers anymore; they become actors who vote in decision-making processes, contribute to creative content, and even turn into investors when needed.

From Experience to Participation

We can also look at the entertainment sector from a different angle. As Marc Baumann discusses in his “New Entertainment Economy” report, the entertainment industry reached about $2.9 trillion in 2024. Yet, the share creators receive is still quite limited.

Take the music industry, for example. There are hundreds of millions of artists, but less than 4% earn a sustainable income. Of the $43 billion generated by music in 2024, only $5 billion went into the artists’ pockets. The rest stayed with studios, producers, and platforms.

This scenario also explains why the fan token model isn’t sustainable: in both entertainment and fan worlds, the system still operates one-way, somewhat independently of technology. When the role of fans or followers is limited to “providing finance,” the gap between creator/player and consumer unfortunately doesn’t close. We need systems where both fans/followers and creators/artists/players can actively participate.

A New Expectation: Two-Way Relationship

Today’s younger generations, especially Gen Z, don’t accept being passive viewers. They don’t just want to buy a concert ticket or watch a game; they want to have a hand in the song’s production, contribute to the film’s budget, and have a say in the club’s decisions. In short, they want to say, “I have a stake in this.”

The next step in “fan engagement” is about changing this setup and contributing to a new order:

A system where ownership and participation are real. A community model that’s not just about consuming but also producing and sharing.

In football, the sport most focused on by fan tokens, a similar transformation is happening. Until now, the fan’s role was mostly limited to “cheering in the stands” or “buying club merchandise.” But today, new models offer fans the chance to be not just spectators but also investors and partners.

For example, The Project Scout points to a new approach where fans can have a say in a player’s future, becoming not just supporters but also investors.

Strategic Perspective

Here’s an important detail: Marc Baumann didn’t stop at one report; “Future of Fan Engagement” and “New Entertainment Economy” were published in a complementary way. This shows that the ecosystem takes this topic much more seriously than just a passing trend. The content of the reports also shows that these topics are genuine areas of strategic transformation.

Moreover, Avalanche is among the sponsors of both reports. This indicates that major blockchain ecosystems see entertainment and fan economy as strategic priorities, aiming to shape not just technological infrastructure but also cultural and economic models for the future.

The numbers support this direction too: surveys in fan token projects show that only half of token holders participate in voting. Participation is limited because the model is one-sided. In contrast, research by KPMG and Deloitte shows that over 70% of Gen Z finds “investing in experiences” more valuable than tangible consumption. So the expectation is clear: to be a participant, not just a viewer.

Although “fan tokens” have been limited, they were actually the first sign of this transformation. But to achieve real participation, we need to take it a step further. It’s inevitable that fans become actors who not only provide finance but also engage in two-way relationships, contributing to production and decision-making.

And this isn’t just a cultural expectation; it’s a strategic area that major funds, blockchain ecosystems, and investors are focusing on. The journey that started with “fan engagement” will evolve into a new participation economy worth billions of dollars in the coming years.

Next week, we’ll look at how this transformation is reflected in real applications in the entertainment and sports world, with concrete examples from film, music, and sports projects.