How DAOs might shape the future of the media
Chances are that if you lurk around the tech titles online you will have read a thing or two about Decentralised Autonomous Organisations, or DAOs to give them their more commonly used moniker.
Champions of DAOs believe that they will have a profound impact on business culture and structure over the coming years and may even lead to a golden age of entrepreneurialism.
But then the very same people may have said similar things about other new technologies too…
DAOs are an online club or community governed by rules that are open and transparent and enshrined on the blockchain. People join them by purchasing digital tokens which give them a certain amount of rights and privileges.
So far many of the high-profile DAOs have been coalitions of active core contributors supported by more passive volunteers. So in some way they do mirror the traditional business structure of shareholders and executives, only this is delivered in a looser and more democratic way.
There are still question marks about the legal status of DAOs, and these might not be resolved until they are tested in the courts. The tax implications of owning tokens are a classic example of the gap between the pace that technology evolves and the struggle of regulators to keep up.
One thing’s for certain though is that they could offer an alternative structure for media startups, helping them establish themselves in a shorter period of time than if they took more traditional approaches.
The companies are also more likely to evolve in a non-linear way too. To see how DAOs could evolve it is worth exploring the genesis of a DAO called Friends With Benefits. FWB started life as largely a social club for entrepreneurs yet backed by a pretty sizable financial warchest from investors Andreessen Horowitz.
Anyone who liked the concept could buy tokens in the DAO for which they were offered access to parties and events.
Yet more recently the movement has started pivoting into other areas including generating content
FWB lead organiser Alex Zhang told Techcrunch last year “We have a whole editorial and content team that creates multimedia assets like zines and are definitely moving into other forms of content. We’re launching a radio station soon where we’ll book different DJs.”
If FWB sets a trend we’re likely to see other groups of people who are passionate about certain interests come together in a DAO, and somewhere in their agreed plans will be the creation of content.
A blueprint for startups?
What could excite journalists is to use a DAO as the basis of a structure for new publishing entities. The scribes come together, pool resources and then work as a community to deliver the type of content they think will be consumed and ultimately monetised.
The most high-profile example of this approach has been Dirt, founded by writers Daisy Alioto and Kyle Chayka. Conceived during the pandemic, Dirt was originally a newsletter on the high profile Substack platform that looked at what Chakya described as the “avant-garde of digital content.”
Dirt has a fascinating business model in that access to its newsletters is free. However, its writers are paid a $500 fee for each 500-word dispatch with the money coming from the sale of non-fungible token NFTs.
The company explain the concept in this way
“Our NFTs are like digital souvenirs, but souvenirs you can trade, sell, and use to access things like private Discord channels and IRL events. By buying one, you become a Dirt supporter but also an insider, helping us develop the future of the publication. Soon, you’ll be able to use the token to vote on topics that we cover and how we focus our editorial. Think of it as a Kickstarter tote bag but much, much better. Whenever a new reader wants to support Dirt, they can buy one of our NFTs (if there are any left).”
So by buying a token people can soon be part of a democratic process that shapes the trajectory of the business. And seemingly a lot of other things too.
Ultimately what Media DAOs appear to be spawning are publishing entities where the relationships between content creators and the content consumers is becoming very close to the point that the latter largely shape the former.
The media has been on a long journey in this direction for some time now. It used to be the hunches of newspaper execs who allegedly intuitively knew what their readers wanted that shaped content. These days it could be driven by AI analysis of reader patterns. Consumers are quite rightly becoming ever more powerful voices in content creation.
DAOs could, in tandem with other blockchain initiatives, bring the reader and the publisher even closer.
The transparency of DAOs could also help shape the businesses of the future. We may reach a point where it will seem archaic not to have known the salaries of execs, or the ethical code governing the creation of content. Watching how the publishing industry responds to DAOs could well be as intriguing as seeing how they actually develop as entities themselves.
