Better Aligning Value Creation & Value Capture: The Future of the Ownership Economy

Better Aligning Value Creation & Value Capture: The Future of the Ownership Economy

In today's digital age, the dynamics of value creation and value capture have undergone a significant transformation. The traditional business models that relied on charging for content are no longer as effective as they once were. Instead, we are witnessing a shift towards a model that leverages the power of the internet and viral marketing to monetize the complement.

One of the key drivers of this shift is the prospect of being able to profit from early support of an artist. From a fan perspective, the incentive to become a supporter is strengthened by the opportunity to share in the success of the artist. This not only expands the total number of supporters but also aligns their interests with the creators. It is not just the artists who have been getting the short end of the stick; the entire industry is undermonetizing.

To understand the scale of this undermonetization, let's compare the music industry to video games. The music industry is valued at around $20 billion, whereas the video game industry is worth a whopping $140 billion. This stark difference highlights the potential for growth and the need for a better alignment of value creation and value capture.

This is where crypto comes into play. Cryptocurrency enables new ways for musicians and other creators to directly capture the value they create. By leveraging blockchain technology, artists can sell their work directly to their audience, charging them in a granular way that not only makes more money per fan but also financially incentivizes them to support the artist further. This direct connection between creators and fans helps bridge the gap that has long existed in the traditional music industry.

Moreover, crypto networks have the potential to revolutionize the way businesses operate. They act as a step function improvement over traditional joint stock corporations, making it easier for startups to raise money and acquire customers. By allowing users to become investors in these networks, the financial incentives are aligned for all stakeholders. This not only empowers creators and collectors but also creates a positive sum game within the ownership economy.

In the ownership economy, capitalism becomes more palatable to a wider audience. For the first time ever, we can have community ownership and network alignment that is completely consistent with capitalism. Platforms that are built, operated, and owned by their users can grow exponentially faster than their institutionally owned counterparts. This shift towards community ownership has the potential to reshape the business landscape in a profound way.