Hollywood is using blockchain technology to get in on the creator-led economy which has helped artists protect their intellectual property and reach their audiences and producers directly to fund the films they want without studio mediation.
With crypto and blockchain, the movie and entertainment industry is about to reinvent its business functions for more secure, transparent, and traceable transactions across the market, wrote Ahmed Shabana, a venture capitalist, startup advisor, and managing partner for Parkpine Capital.
Studios can better cater to filmmakers, retailers, and moviegoers by modernizing their approach to production and distribution from merchandise to receiving financing through crypto- and blockchain-based production, Shabana wrote in a column for Fast Company.
Hollywood has been slammed with a series of unfortunate events including covid-19 and disappearing movie theater audiences, surging piracy, and the challenge of monetizing streaming platforms.
“With the help of blockchain technology, media and advertising enterprises are able to eliminate fraud, reduce costs, and increase transparency within critical and time-consuming business processes,” according to a recent report from Industry Research on the blockchain’s impact on the media business. “Further, blockchain technology helps the media and entertainment companies to effectively protect Intellectual Property (IP) rights.”
The NFT boom has led to a sizable shift in the creator economy by effectively cutting out the middleman in distribution, according to NABAmplify. The National Association of Broadcasters (NAB) is an advocacy association for U.S. broadcasters and advances radio and TV interests in legislative, regulatory and public affairs.
A new way of generating scarcity and value, NFTs or non-fungible tokens are digital certificates of authenticity created through blockchain technology. Stored across computers and supposedly impossible to destroy, NFTs are unique and advocates say they make it easier to prove ownership of artistic work.
Filmmaker Quentin Tarantino in November announced announced a plan to make seven NFTs related to his cult film “Pulp Fiction”. Tarantino’s NFTs will feature hand-written script pages, audio commentary and other “secret” material only accessible to the owner, Euronews reported.
Fox Entertainment in June announced it is investing $100 million in a “creator fund” for NFTs. Through a new business called Blockchain Creative Labs, Fox said it will operate a digital marketplace dedicated to commercializing characters, background art, and GIF NFTs on “Krapopolis,” the first animated series curated entirely on blockchain.
Also in June, Marvel Entertainment and digital collectibles app VeVe struck a deal to expand Marvel’s physical fan collection market market to NFTs, minting comic books and figurines on the blockchain.
“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,” said Daniel Fink, VP of business development and strategy for Marvel Entertainment.
For creators, NFTs can be minted to give automatic royalties (say 10 percent each time it is sold and resold) — a characteristic of current NFT art dealing as speculators buy and immediately resell like stocks and shares, NABAmplify reported.
What’s in it for the Hollywood 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,” Brandon Katz wrote for the Observer. “… for companies like Fox and Marvel, increasing investment into this space 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. Ticket-buying and streaming audiences are then suddenly converted into active revenue drivers as opposed to just passive one-off consumer audiences.”
Amazon bought MGM for $8.45 billion in May and announced a partnership with Eluvio to support MGM’s distribution of screeners, prerelease screenings on local devices, and marketing and licensing support. Eluvio’s recent breakthroughs in blockchain security for content streaming are enabling media companies to expand monetization beyond traditional barriers, with greater personalization and rights control, Fast Company reported. MGM is also exploring the viability of NFT distribution.
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