Earning shares at Resonate: what do we recognize as economic value?

April 14th, 2021 at the Wednesday Community Call

@tamimulcahy @richjensen @Hakanto chatted about how membership and shares are designed as described in the Rulebook. The co-op has focused up til recently on how members attain their initial share which verifies them as a member. However, the co-op has not defined how members can earn additional shares.

Earning more shares at Resonate wouldn’t give you more votes. It is designed to increase the size of your dividend in the case that members decide to distribute the annual surplus among themselves. We are nowhere near the point where we’d have such a surplus, but earning shares now still would factor in to those future dividends.

This type of proportional dividend allotment is common at co-ops: those who generate economic value for the co-op (either through purchases, production, labor, etc) receive a dividend in proportion to the value generated. If the co-op defines particular activities as being able to be rewarded with shares, then members are incentivized to pursue these ways of contributing and can be formally and financially recognized for them.

Although often referred to by more informal titles, three membership classes are defined at Resonate than can earn shares: Fans, Music-makers, Collaborators. While members are required to align themselves with one class while voting (they must have at least one share in this class), members can acquire shares across the membership classes. For example, a member could have 21 Collaborator Shares, 40 Fan Shares, 6 Music-Maker Shares and elect to be a Collaborator when they cast their vote.

I’ll be speaking a bit more personally from here on out in this post from my own heart and interpretation.

The core question is this: what do we want to define as Qualifying Contributions (the formal term) for earning each of these types of shares?

A well-considered model will help the co-op grow by incentivizing, recognizing, and rewarding activities among members. Maybe you’d earn a Fan Share for every 20 Credits spent on the Resonate Player. Maybe you’d earn a Music-maker Share for every 20 Credits-worth of your music that users listen to. There are as many possibilities as we can think up.

I don’t consider this gamification in the modern sense, or if it is it is an old form experimented with by co-ops and related models for a long time and with dramatic success. This isn’t new tech, it’s old tech. The technique here is an established one: members are those who have demonstrated commitment to contribute to the co-op, either by building it, maintaining it, adding to the music catalog, listening to music, etc. These contributors are recognized with formal governance rights and with economic return (return relative to what they put in). I’d argue that this core dynamic is the “co-operation” itself. We make our own economy – and play this game to pursue a common mission while providing for our own economic needs.

This game and the co-operative ruleset that enables it isn’t synonymous with community. Not everything can or should be gamified and monetized. That’s not how humans work (clearly, as Resonate is almost entirely volunteer-run). We have many different incentives to be here and will find joys and have experiences that are ineffable – impossible to reward with a “share” or quantify. From my experience here I’d say that the community spirit at Resonate is bubbling and will continue to blossom with time, relationships and effort.

But co-operation is another key component of this equation, and this discussion – about Qualifying Contributions, Shares, Dividends – about Shareholder Classes – this is how we define the game we are choosing to play together. While these classifications are baked into our rulebook, ultimately members have the power to change these things however they want but that’s beyond this topic. My question here is about how we would want to play the game as its described.

So, what kinds of activities do you think are worth a Share from the co-op? How will these activities help Resonate, particularly financially?

For the sake of this discussion, I encourage focusing on Music-maker Shares (typically granted to artists and labels) and Fan Shares (typically granted to listeners). The Collaborator shareholder class is more complicated as it could be described as a worker co-op nested inside of the larger co-op. The Collaborator class is not currently established at Resonate and all working and volunteer members have membership as either Fans, Music-makers, or Founders. Happy to have a separate discussion on this if anyone has questions.

Footnote: Supporter Shares are a separate type of share that can be purchased at Resonate for a strictly investment purpose. They grant no voting rights in themselves.


Thanks Hakanto! Good info and I look forward to talking more about this on Saturday at the Forum Governance meeting at 11:00 See you then.

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