Fandom is a financial asset and here's the formula that proves it
New research proposes a quantitative model for valuing intellectual property based not on legal rights, but on the scale, intensity and duration of fan communities.
The entertainment industry has spent decades valuing intellectual property the wrong way. Copyright law, royalty relief models, income projections — all of them treat IP as a static asset, something you own and protect. What they consistently fail to capture is the force that actually determines whether an IP lives or dies in the market: fandom.
A new paper published in Kritika Kultura challenges that assumption head-on, and proposes something more rigorous in its place.
The problem with existing IP valuation
Researchers Sungmin Lee and Kyuchan Kim begin with a diagnosis. Traditional valuation models — cost, market, and income approaches — were built for a different era. They assume stable cash flows, predictable economic lifespans, and assets that can be measured independently of their audiences. Content IP breaks every one of those assumptions.
The success of content is winner-takes-all, non-linear, and deeply entangled with community behaviour. You cannot separate the value of a franchise from the fandom that sustains it. Yet no existing model accounts for this. The authors describe the field as being at a fundamental impasse.
The Fandom Asset Model: V = S × I × D
To bridge the gap, the paper proposes the Fandom Asset Model (FAM) — a framework that treats fandom itself as a measurable, quantifiable asset with three core variables:
Scale (S) — The size of the fan community. Measured through social media followers, platform subscribers, search volume, and fan club membership. Scale determines market reach and brand awareness.
Intensity (I) — The depth of fan engagement and loyalty. Measured through paid membership conversion rates, merchandise repurchase, average revenue per user, fan content creation volume, and willingness to pay. Intensity determines revenue stability.
Duration (D) — How long the fandom sustains cultural and commercial relevance. Measured through fan churn rate, intergenerational inheritance indicators, and the frequency of transmedia expansion. Duration determines economic lifespan.
Crucially, the three variables are interdependent. Growing scale tends to deepen intensity through network effects. High intensity extends duration by anchoring long-term loyalty. Long duration attracts new generations, re-expanding scale. The model is a feedback loop, not a balance sheet.
Tested on Weverse
The paper applies FAM to Weverse, HYBE Corporation's global fandom platform. The case is instructive. Weverse didn't just build a communication channel between artists and fans — it engineered a system to systematically manage all three FAM variables simultaneously.
Scale was expanded by onboarding artists from competing agencies and deploying multi-language translation to remove geographical barriers. Intensity was deepened through exclusive content, direct artist interaction, and seamless commerce integration that converts emotional attachment into immediate economic contribution. Duration was extended by encouraging daily platform engagement rather than event-driven spikes, and through metaverse and AI translation partnerships that keep content fresh across formats.
The Weverse case demonstrates that fandom is not an abstract cultural phenomenon. It is infrastructure — and it can be strategically managed.
The risk side of the equation
The paper doesn't shy away from fandom's darker dynamics. Anti-fans, organised boycotts, and toxic fandom activity can damage IP value in ways traditional models don't capture — functioning as what the authors call a fandom liability. The NewJeans agency dispute is cited as a live example of how fandom instability can rapidly erode intensity and duration. Any serious valuation model, the authors argue, must account for both directions.
Why this matters for sport and entertainment
The FAM framework was developed in the context of Korean content IP, but its logic applies directly to sport. A football club, a league, a tournament — all are content IPs whose value is determined not by their legal ownership but by the scale, intensity, and duration of the fandom attached to them.
For sport organisations, the implication is the same one FAM draws for entertainment: fandom should be treated not as an audience to be monetised, but as a long-term asset to be invested in, measured, and managed. The metric that matters is not how many people watched last weekend. It is how deeply they are embedded and for how long.
READ FULL RESEARCH PAPER
Sungmin Lee, Kyuchan Kim / Changwon National University, Korea