Why NFTs Aren’t Dead – and How the Right Ones Will Transform Entertainment | PRO Insight
We are in the midst of a jaw-dropping “crypto winter.” A massive chill fills the Web3 air. Non-fungible token (NFT) sales have dropped a shocking 97% since the beginning of the year. The much-trumpeted promise of NFTs transforming media and entertainment artist/fan and creator/audience relationships is in tatters. Shattered. DOA. Right? Wrong.
NFTs (units of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable) continue to present a transformational mass market opportunity for Hollywood, the music industry, and all artists and creators long-term. We are still only in the early innings — just stepping up to the plate, really. This will take time, but it’s happening.
Let’s take Hollywood first
Fox Television — the sole major studio without a Netflix-like direct-to-consumer paid subscription streaming service — earmarked $100 million months ago to develop NFT-fueled programming. Its first major project is the new animated series “Krapopolis” from the creative mind of Dan Harmon, co-creator of “Community.” NFT buyers will get exclusive token-gated access and private screenings, not to mention meet-and-greets with the cast (and potentially even inclusion in later episodes).
Other new experiments by Hollywood in the NFT world include Warner Bros. Consumer Products’ partnership with storied trading card company Cartamundi. Together, they developed a limited-edition collection of NFT trading cards (called “Hro”) based on famous DC Comics characters that unlock new experiences and offer a new form of active promotion for Warner Bros. films. These hybrid cards marry a physical and digital component and can be resold on secondary markets, providing a lucrative new revenue stream.
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How about the music industry?
Major labels like Warner Music Group have deeply invested in companies and projects in the NFT space. Just last week, WMG announced a major partnership with NFT platform OpenSea to give certain artists the ability to bring their fan communities into Web3 (with exclusive benefits). And while the music industry is agog with massive private equity-financed music publishing and master recording acquisition deals — like last week’s reported $300 million-plus acquisition by Concord Music Group of Phil Collins’ and Genesis’ music catalogs — superfans can now get into the game too. Via NFTs.
Electronic dance music’s The Chainsmokers, for example, recently sold fractional interests in their latest album “So Far So Good” to superfans via NFTs on the Royal platform. These NFTs not only give priority access to tickets, merch and events on an ongoing basis, they also give the 5,000 NFT owners an ongoing share in the music’s royalties. Yes, these may be considered to be securities — so tread carefully — but Royal must have an answer since its offering was blessed by a major blue-chip law firm.
In the world of concerts and live events, companies like highly pedigreed OP3N are developing NFT ticketing as part of their overall super app platform, which could eradicate ticket scalping and gives additional lasting benefits to the buyer. Even Ticketmaster is making noises of getting into the game to protect its turf. And OOD, an innovative new blockchain-enabled marketplace for the physical collectibles market, uses NFTs to authenticate rare real-world music memorabilia like your favorite artist’s guitars and to give the buyer exclusive experiences as well (which may be both real world and digital).
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So why all the doom and gloom amid these clear signs of mass market opportunity?
Well, NFT skeptics focus only on the floor dropping for purely speculative greed-fueled token sales and notorious “pump and dump” schemes by hucksters who talked big and took the unsophisticated’s money and ran. But that’s not where the very real market opportunity is. Unlike that notorious JPEG-fueled crash, all those entertainment offerings mentioned above feature and promote real-world community and lasting value. It’s not just a two-dimensional digital picture. It’s a package of goodies only available to the exclusive community that pays to fund its favorite artist, creator or content. Exclusive active community and continuing meaningful value are the key components here.
What those goodies may be is entirely up to the NFT creator — essentially a new Web3 canvas on which to paint. It’s up to the NFT creator (the minter) to create a community based on something that lasts. And if they do, these NFTs will be the gift that keeps on giving to them, since creators now have the opportunity to share in revenues generated by the resale of these limited exclusive “memberships.” These new sources of financing and economics promise to fuel ever-greater creativity and art, because now the dollars flow directly to the creator/artist — not to the middle-man platforms like YouTube or TikTok that extract their pound of flesh.
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And let’s not forget that NFTs give superfans emotional value and bragging rights (“flex” in Web3 parlance) as well. Now they can say that they aren’t just passive consumers of the art and artists that speak to them. Now they can say that they are active participants who promote and build the artist’s ecosystem (and sometimes even share in the economics).
So make no mistake. NFTs are real, lasting and offer a transformational new media and entertainment opportunity for both creators and audiences alike. For all doubters out there, look to massive consumer brands like Starbucks. Yes, that Starbucks. Your neighborhood barista isn’t just brewing your favorite seasonal pumpkin-spiced latte anymore. Soon you will be able to enjoy your own limited edition exclusive NFT loyalty program called “Odyssey” that the coffee giant recently unveiled during the height of “crypto winter.” If Starbucks is in the NFT game, that game is real (and highly caffeinated).
Full disclosure: The author serves as an adviser to OOD and OP3N.
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