Solana. The Creator Economy. Fortnite. Roblox. Discord. The Streaming Wars. Bored Ape Yacht Club. Gamestop. Shopper-tainment. Pinduoduo. NFT Drops. DAOs. Human IPO. You probably heard of many of these, maybe you’re familiar with some. Perhaps with all. But you may have not looked at them in the broader context of how they all relate to one another. We hadn’t, until a few months ago. We instinctively knew that they were related, but we couldn’t explain how, other than they were occurring roughly at the same time and largely, though not exclusively, in the same digital space. Now we have a theory that provides a systemic view of all the many waves of change and highlights the implications for those caught in the system. That theory is called “Entertainment is eating the world”. Back in 2011, Marc Andreessen published a white paper entitled “Software is eating the world” to illustrate how digital transformation (back when it was a meaningful term) was going to rewire everything it touched. And rewire it more or less did, as Covid19 hit upon a world that looked very different than 2011, and better prepared for it. Still, one thing software did not touch, and did not rewire, is the human mind. “Software is eating the world” explains the last 10 years of transformation. “Entertainment is eating the world” can explain the next 10. “Entertainment” refers to anything that is not functionally necessary, but that we choose to do because it’s gratifying. We can look at it as “The un-necessary delightful”. As for the “eating the world part”, that’s where things get interesting: The Brands of Entertainment At a basic level, conventional entertainment brands from Comcast to Netflix are outspending one another at incredible rates in pursuit of whatever spare time we have, a feat made harder by the parallel rise of gaming and esports. More interestingly, businesses from other industries are embracing the formats and norms of entertainment: Pinduoduo, the fastest company ever to reach $100Bn market cap valuation and now the largest ecommerce platform in China, has been described as “Disney meets Costco”; while traditionally serious and tightly controlled brands such as Gucci and Louis Vuitton are experimenting with forms of playfulness. But it’s in the form of flywheels that the greatest value is unleashed: companies such as Disney, Amazon and Peloton have engineered a business model where growth in entertainment drives further growth along other business lines, that in turn drive growth back to entertainment. And it’s not just organizations… The Faces of Entertainment Now that it’s easier than ever start a new company, and with audiences growing at global scale, many individual entertainers have enough fans and credibility to generate their own personal economy. Traditional celebrities from Ryan Reynolds to Kylie Jenner have traded the easy but short-lived revenues from endorsement deals with equity in their own company, and in doing so have evolved from an asset to a competitor for spirits and cosmetics brands respectively. Native digital entertainers have quickly followed, with a portfolio of business models that include owning, investing, licensing and revenue-sharing. The Spirit of Entertainment The power of entertainment as humans’ favourite mode of interaction is so strong that you don’t need to be an actual entertainer to capture its value: more companies are harnessing its spirit and its components and baking them directly into their business models. Elon Musk’s stunts and storytelling are not just a way to draw attention to Tesla, but one can make a solid case that they are the necessary conditions for it to exist as a viable business. The same spirit is embraced by decentralized communities that have achieved unlikely feats, such as retail investors successfully taking on a hedge fund, largely thanks to the galvanizing power of memes. The power of entertainment is a constant of human nature. So why now? What’s different about 2021? If, as Clay Shirky succinctly put it, “Behaviour = Motivation x Opportunity”, we have recently seen the emergence of two age-defining opportunities. Enabling Platforms Entertainment is a fabric around which relationships are built, and in turn those relationships change the fabric. Platforms such as Discord and Twitch were born and grew around gaming, but once they reached a certain scale, people started spontaneously using them for other purposes, planting the seeds for even greater growth. At the same time, individual creators built their reputation and audiences on legacy platforms such as Instagram, but their desire for creative and financial independence is quickly leading them to new destinations with more rewarding economics: Substack, Patreon and Onlyfans disintermediate their relationship with their fans, allowing them to monetize their fame directly and on their own terms. This represents an existential challenge to entire industries designed to manage and the distribution and monetization of content: broadcasters, newspapers, universities and many, many more. Enabling Technologies A lot of what you may have heard about blockchain lately sounds like the parody of a world gone mad, particularly when it comes to Non-Fungible Tokens (NFTs): jpegs of monkeys or pixelated punks being auctions for millions, or basketball highlights that can be watched by everyone for free, and yet can generate over $230M in sales in bizarre ownership certificates of debatable value. And yet, as Chris Dixon from Andreesseen Horowitz said, “The next big thing will start out looking like a toy”. Because it so often does: we playfully experiment with new technologies on our way to finding serious and definitive uses for them, and sometimes it’s hard to tell the two apart. NFTs are already powering new forms of interactions between brands and consumers, with the fashion industry embracing it at greater speed and scale than everyone else, and new applications are emerging: how about using them to replace ticketing? Or to decentralize functions of governance within autonomous organizations? Or even to invest in people like we can do in companies, and do human IPOs? “Entertainment is eating the world” is about all of this, and more, but deep down, it boils down to a simple question: what does it mean to explore a new world as we watch it unfold before our eyes?