The NFT boom has led to a sizable shift in the creator economy by effectively cutting out the middleman known as distribution. While some believe crypto is part of a new creator-led economy in which artists can directly reach their audiences and producers can fund the films they want without studio mediation, guess what? Hollywood is getting in on the act.
The recent announcement by Fox Entertainment of its $100 million investment in a “creator fund” for NFTs is the latest in a string of studio activity in this space.
It is doing this through Blockchain Creative Labs and aims to “operate a digital marketplace dedicated to commercializing characters, background art, and GIF NFTs related to the series and other projects that join the platform.”
READ MORE: Fox invests $100 million in its new NFT company (Ledger Insights)
Fox’s animation division Bento Box Entertainment is developing the first animated series curated entirely on blockchain. Krapopolis, due in 2022 from Rick and Morty co-creator Dan Harmon, includes a marketplace for digital fan-oriented transactions such as GIFs and character art.
Earlier still, in March, Legendary Entertainment launched two new exclusive NFT collections with celebrated fan artist Boss Logic and Terra Virtua Ltd in connection to blockbuster Godzilla vs. Kong. Together, they each offered a unique line of digital collectibles and artwork related to the long-awaited monster mash-up film.
READ MORE: Two ‘Godzilla vs. Kong’ NFT Art Collections Launched by Legendary Entertainment (Observer)
A similar extension of the familiar and physical fan collection market was unveiled in June between Marvel Entertainment and VeVe, a digital collectibles app operated by Orbis Blockchain Technologies.
Daniel Fink, VP of Business Development and Strategy, Marvel Entertainment, explained; “Through VeVe’s platform, we hope to expand the limits of what Marvel fandom can be, starting with personal and interactive digital collectibles that, through NFTs, fans can truly collect, share, and enjoy in a way that they have not been able to do before.”
VeVe NFT digital collectibles such as comic books and figurines are minted on the blockchain, “which allows for an immutable record of authentication and allows fans to collect their digital products.”
READ MORE: Marvel and VeVe Collaborate to Offer Digital Collectibles Experience for Marvel Fans Worldwide (Marvel)
Since December 2020, VeVe has sold over 580,000 NFT digital collectibles to its user base of over 340,000 fans and has become one of the top apps in the entertainment category on the Google app store.
What’s in it for the studios? In some ways, it’s an extension of the thriving online economy created by video games that offer in-game purchases for invested players,” writes Brandon Katz at Observer. “The appeal is locking engaged fans and audiences into ongoing micro-transactions in these digital marketplaces.”
So, for companies like Fox and Marvel, increasing investment into crypto and blockchain is aimed at securing a steady flow of smaller-scale purchases from a committed user base.
“The longer-term hope is that this becomes a consistent and familiar element of the fan experience,” says Katz. “Ticket-buying and streaming audiences are then suddenly converted into active revenue drivers as opposed to just passive one-off consumer audiences.”
READ MORE: The Hidden Value Hollywood Hopes to Unlock With NFTs (Observer)
Yet, as the digital artists like Beeple have showed, there is a lot of money to be made in creating NFT-backed artworks. His $69 million paycheck for a single sale in March may be an outlier (the value of the NFT market has since nosedived) but the technology contains within it the keys to reward artists directly and in perpetuity.
NFTs can be minted to give the artist automatic royalties (say 10%) each time it is sold and resold — a trend that is characteristic of current NFT art dealing as speculators buy to immediately resell like stocks and shares.
READ MORE: Square’s Jack Dorsey says Tidal is interested in exploring NFT opportunities (The Block)
Twitter CEO Jack Dorsey has said that the technology enables people anywhere in the world to contribute and to become artists themselves, and also to receive tips or grants or donations without having to go through any third parties.
“There’s a lot of power in that,” Dorsey said. “I think the spirit of what NFTs represent, the spirit of just looking critically at how artists are compensated and improving that, is something that we want to spend a lot of our focus [on] going forward to make sure that we’re… looking deeply at entirely new ways to give artists the right tools to help them and to build.”
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Perhaps through client pressure, major agents are getting involved too.
CAA is working with Google, Samsung, and Sony, as well as major private equity and cryptocurrency firms to help facilitate blockchain in Hollywood.
READ MORE: Hollywood Powerhouse CAA Joins Blockchain Video Network Theta (CoinDesk)
“We believe that blockchain technology and the rise of digital collectible NFTs will bring unprecedented opportunities to our family of storytellers, trendsetters, icons, and thought leaders in the entertainment industry,” said Michael Yanover, CAA’s head of business development.
United Talent Agency has just signed CryptoPunks, Autoglyphs, and Meebits — a trio of NFT art projects from Larva Labs.
“I would say that it is one of the first opportunities for an IP that fully originated in crypto-world to enter a broader entertainment space, and they earned it,” Lesley Silverman, head of UTA Digital Assets, told The Hollywood Reporter. “They really have hit the zeitgeist in a tremendous way.”
READ MORE: UTA Signs NFT Art Projects CryptoPunks, Meebits and Autoglyphs (Exclusive) (The Hollywood Reporter)
Many people, it seems, are encouraged by Hollywood’s embracing of blockchain and NFTs, because they think it will decentralize the decision-making process from executives and studios, giving the audience much more power.
“If you can build your own coin, you can have people buy it and use the money to make your movie,” suggests Jason Hellerman at No Film School. “That’s basically a more advanced Kickstarter (although you would have to convert the money).”
He thinks the most likely scenario is the ability to sell NFTs of a work to make the budget back. If you have limited stills or art you sell as NFTs, you might be able to even sell them before the film to raise more money, he says.
“The most important thing here is independence. You are not reliant on studios or financiers as long as the audience is paying to see the movie. Maybe everyone who buys in gets a link and an NFT, then you release it that way. These are all hypotheticals, and we are learning as we go.”