Over the last few years, cryptocurrencies and blockchain technology have become not only talking points but also have seen multiple use cases across every industry. The adoption of crypto technologies is rising in the movie industry as well. Numerous companies in this space started accepting cryptocurrencies for payments, while others tried to take advantage of blockchain technology. For example, some animation studios tried to find how to invest in Golem tokens since they allow them to get extra processing power for rendering computer-generated imagery (CGI).
According to a recent report from Industry Research, blockchain can help the movie and entertainment industry reinvent business functions and facilitate transactions. One of the blockchain-based technologies that can make it is NFT. NFTs use blockchain technology to verify ownership of unique digital assets and create secure transactions to authenticate digital art.
The craze around NFTs has swept across content industries in 2021, and Hollywood hasn’t been left out. In the first half of 2020, the total NFT sales added up to about $250 million. But the NFT sales for the same period in 2021 grew almost tenfold, reaching $2.47 billion. In October 2021 alone, NFT market sales surged to $4.2 billion.
Much of that trading activity is related to speculators who buy assets to find another buyer and earn profits. However, most media companies insist they started using NFTs not to make a quick buck. Let’s find out how Hollywood already tried to use NFTs.
Big Names Join the NFT Craze
In March 2021, Legendary Entertainment partnered with Boss Logic and Terra Virtua Ltd to launch two NFT collections related to the “Godzilla vs. Kong” movie. It was one of the first big moves from Hollywood in NFT that was gaining hype at that point. The company offered fans to buy exclusive collectibles of the two monsters fighting. It helped Legendary Entertainment to get both a new revenue stream and a new way to promote the movie.
Warner Bros. used the same approach by launching the sale of 100,000 NFTs of “Matrix”-inspired avatars in November 2021. The price for each NFT was $50, giving the company potential $5 million in revenue. But as for Legendary Entertainment, this event was more about promoting the “The Matrix Resurrections” movie released in December 2021.
Disney has released a series of “Golden Moments’ NFTs, featuring iconic characters and items to promote Disney Plus and drive up streaming subscribers. In selected markets, owners of “Golden Moments” NFTs were also able to receive a three- or a 12-month subscription for Disney Plus.
Hollywood sells not only images as NFTs but video content as well. Lionsgate released a “Saw”-inspired video collectibles before Halloween, and the limited-edition of NFTs quickly sold out. Lionsgate has seen $500,000 in sales for six NFT pieces. Then the company pointed out that NFT is just a way to extend entertainment franchises.
Some companies are counting on NFTs to be something more than a one-time promo opportunity and see them as a sizable option to generate revenue. For example, Fox Entertainment formed Blockchain Creative Labs with Bento Box. Blockchain Creative Labs is a content studio with $100 million in funding to launch the NFT initiative for Fox and third parties. Marvel joined Fox in similar ventures, creating NFTs from popular comics characters and other parts of the universe.
Despite the slight hype fading around NFT by the end of 2021, media companies continue joining the space. In the spring of 2022, ViacomCBS is planning to introduce its own NFT platform in partnership with startup Recur. The platform is expected to feature characters and content from Nickelodeon, MTV, Paramount Pictures, and Showtime brands as NFTs.
NFTs are also seen as a way to fund independent filmmaking. A startup NFT Studios is aiming to produce a first-ever movie that will be fully funded by NFTs, selling 10,000 NFTs to the public and institutional investors. The startup hopes to raise $8-10 billion from this initiative and promise that those who buy NFTs will get a share of any profits and meet the stars of the production. According to NFT Studios co-founder Niels Juul, such a way should “democratize the process” of filmmaking and circumvent a Hollywood system under which smaller productions take up to eight years to reach movie or TV screens. Niels Juul also expects to begin shooting by April 2022.
The Indie project “Zero Contact”, starring Anthony Hopkins, claims to experience a significant payoff from NFTs. The production company Enderby Entertainment that financed the movie decided to distribute the film via its own NFT platform Vuele. In September 2021, Vuele released 11 limited NFT copies of “Zero contact”, seeing $100,000 in sales. Rick Dugdale, CEO of Enderby Entertainment and co-founder of Vuele said that these 11 buyers were cinephiles and crypto enthusiasts who “wanted to own a piece of history”. Vuele plans to release another set of NFTs and “that’s it”, forming some kind of artificial scarcity for the movie.
For Hollywood and media companies, NFTs could become a new way to promote and monetize intellectual property, increasing the engagement of fans. But most of Hollywood’s NFT initiatives are currently experimental toes in the water to find the appropriate use of technology. The true power of NFTs in Hollywood has yet to be realized. Potentially, NFT may help Hollywood resolve such issues as content piracy and funding independent projects but NFTs have to resolve a lot of their own issues to accomplish that.