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Harry Potter and the Open Storytellers of Web3
Harry Potter. Star Wars. The Economics of Media Companies (feat. Ben Thompson). Lessons from the Open Source Software Community.
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I spent last Monday at Universal Studios wandering around Harry Potter's Wizarding World.
It got me thinking about one of my favorite subjects: storytelling. The way we tell stories, and the worlds that we build around our stories has changed a lot in the last 20 years. Thanks to Star Wars, Marvel, Game of Thrones and others, our greatest stories are not isolated tales. They are full universes complete with many heroes and many stories.
Building a robust universe is not the project of a single auteur. It's a collaborative endeavor spanning companies and communities. Charterless, of course, focuses on innovations in companies and communities. So I decided to research the future of storytelling through the lens of Web3. This is my theory of the case.
Let's check it out.
Down Diagon Alley
“I dislike [allegory] because I think it renders fiction pretty pointless, if a story really is written to mean something else […] why not just say that thing?”- China Mieville, in response to a question about his novel, The City and the City
Maybe the most remarkable thing about Harry Potter’s Wizarding World at Universal that the Boy Wizard is not heavily featured in the park.
But Universal’s essential insight is important: you are not really there to see Harry.
You are there to experience shopping for wands at Ollivander’s in Diagon Alley, sharing a Butterbeer at the Leaky Cauldon or checking out the gag gifts at Weasley Wizard Wheezes. You are there to imagine living in the world that J.K. Rowling built.
Except that it’s not JK Rowling’s anymore. The Harry Potter canon counts 10 books, two themes parks, a broadway play, eleven films and 20 video games. And that’s just the officially sanctioned work. If you search “Harry Potter” on Wattpad you will find over 26,000 stories about the Wizarding World written, for free, by fans. Many of these stories have been read over a million times. There are two national amateur quidditch leagues. Harry Potter fan-creators on TikTok have millions of followers.
This universe-building didn’t start with the Wizarding World. Star Wars was doing it thirty years ago. As George Lucas said about the galaxy far, far away back in 1994 (!):
“After Star Wars was released, it became apparent that my story—however many films it took to tell—was only one of thousands that could be told about the characters who inhabit its galaxy. But these were not stories I was destined to tell. Instead they would spring from the imagination of other writers, inspired by the glimpse of a galaxy that Star Wars provided."
New creators bring new generations of fans into the fictional universe. In doing so, they also increase the value of the original IP.
But these new creators only rent the IP rights of Lucas and Rowling. They pay for the privilege of extending the universe’s mythology. Yes, they can profit from their works. But they are the artistic equivalent of wage labor rather than true owners. They do not stand to profit from the appreciation they cause in the underlying IP assets.
That could all change soon.
Lucas (now Disney) would, of course, retain a large ownership share. But imagine instead an open-source, collaborative fictional universe. Imagine a Star Wars that was built and owned by the writers, artists and fans who pour so much into it. They could write stories, or create movies, or write songs... hell even open restaurants themed after Star Wars.
Sound far fetched? Some pioneering DAOs and NFT projects are already testing this theory.
The Cathedral and the Bazaar (Part 1)
“Linux is subversive. Who would have thought even five years ago (1991) that a world-class operating system could coalesce as if by magic out of part-time hacking by several thousand developers scattered all over the planet, connected only by the tenuous strands of the Internet?” - Eric Steven Raymond, The Cathedral and the Bazaar
Open source software once sounded like a utopian dream. Why would highly trained, highly paid software engineers ever build complex software for free?
And even if you could somehow convince these engineers to contribute their labor, how would you ever organize them to code software that could compete with Microsoft, Apple or Google?
Eric Steven Raymond also started out as a skeptic. But after studying how Linux took shape, he tried his own hand at managing an open source project. He chronicled the lessons that he learned in his famous essay, The Cathedral and the Bazaar.
As Raymond recounts, much of the world believed that the most important software needed to “be built like cathedrals, carefully crafted by individual wizards or small bands of mages working in splendid isolation,” but Linux overturned this paradigm. They released early and often, were open to anyone’s contribution. “No quiet, reverent cathedral-building here — rather the Linux community seemed to resemble a great babbling bazaar of different agendas and approaches out of which a oherent and stable system could seemingly emerge only by a succession of miracles.”
And yet, it worked.
Linux grew to become the favored OS of software developers. It powers data centers around the world. It powers Android phones. It even powers Oculus VR headsets. The open source approach allowed it to flourish, finding its way into every crack of the tech world. Could an open source narrative universe work the same way? Could it compete — not with the Apple’s or Microsoft’s — but with the Disney and Netflix of the world?
Aggregators, Integrators and Collaborators
In a 2020 piece on Disney+, Ben Thompson defined two types of internet content companies: the aggregators and the integrators.
Netflix is an aggregator. They are content agnostic and seek to maximize the number of users who access their content. For content producers, Netflix provides leverage to reach the broadest possible audience.
Disney, in contrast, is an integrator. Disney’s content is highly differentiated. They leverage differentiated content to maximize profits from that content’s consumers.
This explains why Disney, the world's preeminent content creator, moved its content off of Netflix and onto its own platform. On Disney+, Disney can capture the full value that consumers pay for their content. They can also upsell those consumers to other Disney content, a Disney vacation or Disney products.
But this strategy works for Disney because it has built-in distribution. If Walt Disney were just starting out, he would have no way to get his content to consumers. He would need to leverage an aggregator’s captive audience. That aggregator (Netflix) would in turn cut a deal on the most favorable terms for itself. This is the Faustian Bargain that confronts creators in our system. If you want distribution, you need to give your content away for limited return.
But at the risk of co-opting the cliché: web3 might actually solve this. Crypto introduces a third model to the game. I call this, The Collaborators.
Imagine that I have an idea for a new competitor to Marvel’s Cinematic Universe. I call it The Super Badass Super Hero Club. Sounds pretty dope, right?
Now my 100 followers on Twitter are not going to be enough distribution to get this project started. But I have some fellow creative friends with their own larger followings. Let’s say my typical friend has 1,000 followers.
So I get an idea: I decide to let my creative friends (and friends of friends) mint 1 of 100 distinct Super Hero NFTs. Each Super Hero is, of course, a valued member of the Super Badass Super Hero Club.
And each holder of that NFT retains the IP rights to their hero. They are free to use them to tell any story that they want. The only requirement is that they obey the rules of our universe.
So now: rather than 100 followers for my 100 heroes, I have close to 100,000–spread, of course, across the holders' of our NFTs. Now things are starting to get interesting.
I keep the coolest hero NFT for myself. His name is Super Bob.
(My apologies–my super hero naming skills are rather weak.)
Now I am taking a long-term approach with Bob. I want this particular hero NFT to be as valuable as possible in ten years. So my financial interest is to build a robust narrative around Super Bob. I will make him as popular as Iron Man but twice as cool. If I succeed, I will be able to monetize him later by selling merchandise or licensing him for stories.
To achieve my goals, I need to do two things:
Create good content featuring Super Bob. I mean, that’s easy. Bob’s a super compelling guy.
Increase his reach. Now that’s harder.
To increase his reach, I could choose to work with an aggregator. I could pay to spread his story on Instagram or YouTube. But I have another choice, in this case, because I could also construct partnerships with the 99 other NFT holders.
So after building his Bob a small following of a few thousand fans, I decide to start working on cross-over specials with the other heroes of the Super Bad Ass Super Hero Club .
I set up collaborative missions with Awesome Andrew (10k followers). Andrew and I also pay to include Snoop Dogg’s hero, The Human Weed (150k followers) in our story.
Other members of the community signal-boost our story on social media. They do this because they know that a person who becomes a fan of one hero will likely become a fan of others.
It is in all of our interest to collaboratively build this media ecosystem.
So the incentives here just might work.
But telling a cohesive story is hard enough for a single creator. What happens when you get 1,000 friends involved — each of whom want to maximize the impact of their hero? How do you keep things from spiraling out of control?
To answer that, we’re going to have to return to our exploration of Open Source Software with Eric Raymond. There we will find four lessons that might help us keep our new cinematic universe on the rails.
The Cathedral and the Bazaar: Lessons from Open Source (Part II)
Lesson 1: Minimum Viable Story + Smart Primitives
“Smart data structures and dumb code works a lot better than the other way around.”
“To solve an interesting problem, start by finding a problem that is interesting to you.” - Eric S Raymond
The biggest risk facing most startup founders isn’t running out of money or competition. It’s building something that no one wants. And the best way to ensure that you build something that someone wants is by making sure that you, yourself, want that product.
The sprint to build “platforms” for other people is a trap. To build a great platform for products, you need to first build your own great products. Likewise, to build a great fictional universe, it helps to write some fiction within that Universe.
After all, without Harry Potter, we probably would not care about Diagon Alley.
These narratives also help introduce the rules of the Universe. They provide constraints to other artists who want to build in your world. Great creativity emerges from well-crafted constraints. Whereas too much flexibility can become oppressive.
Last year’s Loot project provides a case-in-point.
On August 27, 2021, Dom Hoffman (a co-founder of Vine) tweeted that he was creating an NFT project called “Loot.” The NFT collection consisted of 10,000 “bags of loot” — each one literally consisting of text describing eight magical items.
Hoffman provided no other guidance about the project. There was no pre-made game in which owners could use the Loot. There were no drawings of the items. There was not even the shell of a narrative associated with them. All interpretation was left up to the community.
So, of course, the project became valuable almost immediately. In September, these bags of Loot were selling for >10 Ethereum (~$30,000).
At first, the experiment seemed like a success. A full ecosystem began to take root around these sets of text-strings. There were Loot exchanges for trading items. There were guilds of Loot owners who were “uncovering” the story of their items. There were even games that incorporated Loot.
But the freedom proved too expansive for the community. Competing narratives have yet to coalesce into a single shared universe. And without that universe, it’s hardly a stable foundation for artists to build upon. Now - it might be ideologically pure (yay decentralization!..or something like that…)- but it’s not the stuff of great fictional universes.
As a result, Loot prices have been on a steady decline (~$5,000 USD at time of writing). Its value as a project will endure because of its OG status. It will not become Web3’s Lord of the Rings.
But other projects–with even the loosest narrative -- have had more inspiring outcomes.
Let me introduce you all to Jenkins the Valet.
Jenkins was born Bored Ape #1798.
As we covered in Bored Apes: The 2B JPEG Cartel, the BAYC has its own minimal storyline. In this world, crypto-investing apes waste away at their exclusive yacht club.
One month after the BAYC launched, a Twitter account in Jenkins’s name appeared. The account introduced himself as the Valet of the Bored Ape Yacht Club. He was ready to provide all the dirt on his misadventures with the other members of the BAYC.
By August, Jenkins had made over a million dollars. He was signed by CAA. His “tell-all memoir” is being written by bestselling author, Neill Strauss. Other Apes want to appear in his stories to increase the value of their NFTs. With only the lightest narrative framing from the BAYC, a star was born.
Lesson 2: Cultivate Community
“Release early. Re- lease often. And listen to your customers.” - Eric S Raymond
Last Fall, Twitter controversy exploded over a new NFT project called The Realms of Ruin.
Backed by five NYT bestselling and award-winning YA authors, The Realms of Ruin was proposed as the world's first community-driven fantasy epic.
The authors would start the story. Community members could extend the story by writing fan fiction and minting it as an NFT. If the authors approved, the fan's story would be “adopted” into the official canon of the Realms universe.
So far, so good.
We would have clear narrative framing with a clear path for community involvement. But the authors never bothered to solicit community input on their approach.
And the backlash was brutal.
Fellow writers (already distrustful of crypto experiments and disdainful of NFTs) were merciless. They hated the environmental impact of NFTs. They hated that the project was targeted at teenagers. But, even more alarming to the literary community, the project’s creators had not specified how IP rights would work. Critics feared the authors intended to turn fans into free labor.
Because they had not brought their community along for the ride, the Realms of Ruin was rejected by the very community that they had hoped to enlist.
The creators abandoned the project. They also scrubbed all references to it from their social media accounts.
Lesson 3: Preventing the Las Vegas Strip Problem
“Perfection (in design) is achieved not when there is nothing more to add, but rather when there is nothing more to take away.” - Eric S Raymond
An audience can only care about so many "grand battles."
In an open world, authors would compete to outdo one another. Battles would become bigger and less believable. This, of course, does not make for a coherent narrative universe.
Here’s where community governance needs to intervene.
First, there needs to be clear rules. This is something that authorized writers in the Star Wars universe understand.
As one puts it, “You don’t reveal Luke’s father is ‘actually’ Han. You don’t declare the Force to be generated by an evil space jellyfish, and so forth. You respect that a lot of other people are telling a lot of other stories and that those stories need space to grow and thrive. There’s basic common sense involved and the courtesy required to work in a shared universe.”
To prevent abuse, the community needs a collectively-governed shared source of truth. This ledger must be owned by the community rather than a single gatekeeper. It is roughly a story blockchain.
The chain would store the state of characters at different times. It would ensure that Captain America is not fighting Hydra in New York and Thanos in Wakanda.
A collectively managed story-chain would also ensure that the world's rules are expected. Voters would check that creators have not introduced flying cars into Lord of the Rings before approving an update.
One implementation of this approach is being tested in Impssbl’s project “Proof of Story.” In that project, authors compete to tell stories using their characters. Each week, the community votes to incorporate its favorite stories as “chapters” in the official work. Another project from Vine/Loot creator Dom Hoffman, Blitmaps, encourages the community to propose and vote on a grand narrative of robots in a sci-fi universe. In the next stage of the project, the community will decide on the robots’ enemies. These approaches encourage individual creativity, but provides a community-check against divergent narratives.
Something Lost, Something Gained.
In real-life there are no individual heroes, there is no tight narrative unity. Instead, there are lots of people doing their best while living out their own stories. And therein lies the opportunity of the Open Source Storytelling universe.
We will populate our stories with many new diverse voices. That might not be enough to knock off Star Wars. But it’s going to make for some interesting stories.