When we talk about blockchain and NFTs (non-fungible tokens), we often focus on specific topics: speculation in the cryptocurrency markets, sensational multimillionaire drops of new NFT collections, and so on. This doesn’t help to understand that NFTs and blockchain are technologies (part of a broader concept of Web3).
They are neither good nor bad. Just technologies, but potentially able to bring useful innovations in several sectors.
But what innovations and which sectors? And here comes into play creativity, the desire for experimentation, and the search for new business models. An example is the media & entertainment sector, where several companies have not hesitated to launch NFTs containing images, audio, and video, connected to their franchises.
In this article, we’ll focus on that sector, where NFTs have a potential that to date has barely been touched on the surface. A space in which where creativity and experimentation could generate surprising outcomes, even with disruptive impacts on the sector itself.
NFT and blockchain in the media & entertainment sector
So, some media companies have already brought their content into Web3. The list is not short and includes Warner’s NFTs collections (such as The Matrix, DC Comics, Looney Toones) on Nifty‘s’ marketplace, Disney and Marvel characters on NFTs in the Veve app, The Walking Dead in the Opensea marketplace, and so on.
These different drops are united by a single strategic approach: the search for new models of monetization of IPs (Intellectual Properties) by leveraging existing content. Therefore, the NFTs are often quite basic: the replica of content ‘inside’ the tokens.
Same content, new channels, and hopefully additional revenue. That’s all.
Of course, there are some exceptions: some collections such as “The Walking Dead” creatively rework the content of the television series, offer a membership to a community of fans, and allow access to incremental content and experiences.
The “Lord of the Rings” NFTs drop in the Warner’s Movieverse
A decisive leap forward, however, took place with the drop of October 21, 2022, made by Warner Bros for the NFT collection inspired by “Lord of the Ring – The Fellowship of the Ring“.
The film major launched two types of tokens, the “Mystery Edition”, with a minting price of $30 and available in 10,000 units, and the most expensive “Epic Edition” in 999 units at $100.
Once you purchase the NFT and access the site, called WB Movieverse, you can watch the extended edition film “The Fellowship of the Ring” in 4K UHD version, access 8 hours of special and unpublished video content (comments, interviews, making-of, etc.), explore with the mouse scenarios inspired by the film in which – clicking here and there – you can activate content such as photo galleries.
Finally, there is a series of digital items to be used on the smartphone (after framing a QR code) for AR effects (augmented reality).
Warner Bros describes all that as a “Web3 Movie Experience”, but such a definition should not deceive. The overall experience is at the end of the day limited and almost disappointing, Warner didn’t make that small extra effort to reach that WOW effect that is definitely missing.
You can find more details in my previous article in which I described my personal experience in the WB Movieverse.
Moreover, as I write (over one month after the drop) only 50% of the 10,000 NFTs available of the “Mystery Edition” has been minted and then sold.
Warner Bros has no reason to be really satisfied in terms of sales performance, also considering that successful new NFTs are usually sold out within a few hours and even less. But what we want here to focus on is the underlying infrastructure, which is much more interesting than the business initiative.
Blockchain and NFT as new channels for the distribution of digital content in entertainment?
Warner Bros has built its WB Movieverse on a new blockchain: eluv.io or if you prefer Eluvio.
What exactly is Eluvio? Eluvio was born as a blockchain dedicated to entertainment content, to allow creators (such as Warner Bros) to convey content experiences to fan communities.
Which content? Not only movies, but also live channels, streaming, digital collectibles, e-books, music albums, and digital tickets for access to events (virtual or physical).
At the heart of Eluvio is Eluvio Content Fabric, an open, advanced blockchain protocol intentionally designed for digital content. Capable of broadcasting audio-video in 4K UHD (and I must admit that it works perfectly).
Warner Bros is the best-known name among the creators who have partnered with Eluvio, but on this blockchain you can find also the contents of Paramax Film, Push Entertainment, and of the creative agency Innovative.
The entertainment distribution in the Web3
Now, beyond the poor performance of the drop “Lord of the Rings” (in the previous article I pointed out several weaknesses of the project), and beyond the future of Eluvio, we are facing the gradual development of a new architecture for the media & entertainment sector.
We are talking about a future in which entertainment experiences are made possible by the possession of NFTs, which allow their owners to take advantage through the blockchain of content and benefits (membership, tickets, etc.) in the virtual dimension but also in the physical dimension.
We should always keep in mind that an important role that NFTs can play, in general, is to act as a connector between the physical world and the virtual world. An example?
Imagine receiving an NFT after having seen a movie in a theatre (real experience) and then accessing with that NFT a virtual space dedicated to that franchise in the metaverse (virtual experience).
Or vice versa, imagine you have purchased an NFT in a marketplace (virtual experience) and therefore you are able to access an exclusive live music performance (real experience) by showing the NFT on your smartphone at the entrance.
Web3: the entertainment industry towards disruption?
After these examples, you will no doubt have guessed the immense possibilities offered to the entertainment industry by these fundamental technological innovations. Content consumers could watch videos, listen to music, and participate in virtual events in a metaverse…
But also, thanks to the possession of an NFT, enjoy the privileges associated with a membership: access to concerts, and ‘VIP experiences’ such as participation in a premiere or a reserved meeting with a talent behind the scenes.
Imagine that there are only 100 NFTs that allow the membership to a very small group of Justin Biener fans, with advantages such as participation in both virtual and live concerts in the front row, etc.
And then, an additional interesting aspect for the user is the possibility of reselling the NFT, even at a higher price, leveraging the scarcity of the NFT.
In the ticketing industry, all those possibilities could really have a disruptive impact. But the music, film and television industries would not be immune. And neither would be the amusement park industry: just think what a range of exclusive experiences could be connected to the ownership of an NFT.
Transmedia storytelling on the Web3
By transmedia storytelling we mean a narrative that develops through multiple media. In its most complete conception, the fan of a franchise would be encouraged to enter deeper and deeper into an imaginary world moving between movies, television series, books, comics, and so on.
An ideal framework in which each media contributes to adding new elements to the narrative development.
The NFTs could become an additional media, fully integrated into the transmedia storytelling, to enrich the content consumption experience by adding new narrative elements.
You read a story in the book, then you can watch the TV series (which adds new pieces to the story), go to watch the movie and then… discover how the story develops by getting access to new content through an NFT.
From this point of view, non-fungible tokens could radically change the entertainment experience as we know it today.
Blockchain, NFT and entertainment: in conclusion
However, the development that is emerging will not be so linear and rapid. There is a clear problem in spreading blockchain technology to a wider audience.
How many have an e-wallet today? How many are ready to purchase an NFT to get access to entertainment content with the same ease they purchase a Netflix subscription?
Non-fungible tokens are far from a mainstream diffusion phase, but that is not the only problem.
In this evolution, also a certain degree of resistance from media companies is to be expected.
Companies such as Netflix, Disney +, Amazon, Sky, which have invested heavily in streaming infrastructure, could hesitate to embrace innovations that would already undermine current models of content delivery and marketing.
There are also more complex but no less critical aspects.
For media companies, the collection and processing of user data is a critical success factor. How does this reconcile with the anonymity of an e-wallet?
How does this reconcile with the possibility of transferring an NFT (which could act as a subscription) from one user to another in a few minutes, and more generally with the decentralized nature of the blockchain which is so elusive?
Finally, there are problems of interoperability between the numerous blockchains. Indeed, every big media company prefers to develop partnerships with a specific blockchain.
As we have seen, in fact, Warner has relied on a blockchain like Eluvio, unknown until yesterday. While Disney uses the GoChain blockchain for its NFTs on the Veve app. The global leader in the stickers and trading cards market, Panini has even developed a Panini Blockchain for its digital trading cards, while FIFA uses Algorand for its FIFA+ platform.
Therefore, if we can get a glimpse of a possible scenario in the media & entertainment sector, we can’t predict today how far this future will be.
