2022 dawned with new desires and prospects. Many of us see a new year as an opportunity to reinvent ourselves, and so has our beloved entertainment industry.
You’ve probably come across NFTs (non-fungible token) and many more new buzzwords.The fact is, these intangible things might be set to revolutionize the industry as we know it. We are not talking slight change here Reports from the Influencer Marketing Hub state that“NFT Trading Volume Added Up to Nearly US$11 Billion in Q3 2021” plus, “OpenSea, the biggest digital marketplace for crypto collectibles and NFTs across the globe, boasted more than US$3 billion in trading volume in August 2021, an increase of more than 800%compared to the previous month’s volumes.”
In case you don’t know, an NFT stands for “Non-Fungible-Token” and is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded. ‘Non-Fungible’ means not replaceable. Cryptocurrencies, like Bitcoin for example, are fungible because when you trade them for another bitcoin, you get exactly the same face monetary value. This never happens with an NFT because every token is unique.Like an artist’s painting, every NFT is one of a kind and its ownership is clearly assigned to one individual or organization.
Now that that’s a little bit clearer, let’s take a closer look at NFTs and their role in the digital entertainment industry together, shall we?
Well, as we begin our voyage of discovery, you soon find that Samsung has introduced anew TV feature: NFT support, described as “a feature that will help people understand and consume (or purchase) NFTs from the comfort of their sofas”.
But what are the implications of the NFT phenomenon for the broader entertainment industry? Let’s unpack this a bit.
Exclusivity, Limited Editions and Collectables
In the past, alongside their general releases, studios produced limited editions of films, exclusive DVD box-sets, collector’s editions, with exclusive content or special branding. This same strategy can be brought to the brave new world. Originators of content can offer a special package of media bound to an NFT that includes extra exclusive material – such as bloopers, interviews with cast or directors, deleted scenes, etc. – relating to certain media assets.
The raison d'être of an NFT is its exclusivity. You can create something that’s unique, therefore limited, exclusive and, for some, desirable or even irresistible.
How will NFT’s carve out their role in the media and entertainment industry and, furthermore, how can NFTs become a business-enhancing part of the strategy of a pay TV operator?
Operators could, for example, brand NFTs as collectable action figures from blockbuster movies or TV shows. Here’s where the collector's ecosystem kicks in.
Ownership of an NFT comes with the rights/permission to access certain content, and your right to transfer that content if you lose interest. You can sell it or trade it for something else.Just think of collectible trading cards, which might depict premier league football stars or baseball players, or Star Wars and Harry Potter sticker collections or action figures. But the difference here is that NFTs can’t be easily replicated, so there is only one Harry Potter action character, or a limited amount of numbered Harry’s (as in Harry 348/1000).
You can see a current example on UFC Strike, where collectables of fighters and videos of memorable UFC moments are for sale in digital format.
We’ve already touched on access. In a pay-TV or super-aggregator context, NFTs can be bound to a certain and when you purchase your NFT, you acquire access rights to that asset. This system might work like a DRM (digital rights management) solution, but instead of a finite time window or subscription, it will be associated with an NFT. The backend can be configured to recognize it and grant access to that content. If the owner wants to transfer that NFT, access will be revoked, and granted to the new owner. Similar to the old days of reselling or gifting DVDs
So how can content providers and operators take advantage of this? For a start, they could put on a live event - digital or in-person, or both. This might be a live movie premiere, season preview of a hit TV show, or a live music event, etc. But the audience would be limited to only a certain number of people, let’s say 10.000, and the operator sells an NFT to each of them. Only the individuals who own those NFTs can watch or attend the event. To see a current example, read how Lupe Fiasco and Gucci Mane are selling tickets to their upcoming concerts as NFT’s.
We‘re familiar with other NFTs in media scenarios first-hand, since one of 3SS’ customers ,Beem, is offering consumers who join its unique experience platform the opportunity to use their favorite NFT collections to gate your content or events and accept payments at those events in your own community coin.
Beem is a true pioneer in using NFTs in the entertainment industry, having started to develop the idea back in 2018, in which the industry was going to be dominated by blockchain technology. But back to the present, and Beem is currently working with access rights and NFTs in diverse ways:
If you have an NFT sitting in your wallet, you can access extra exclusive content within Beem, like live events or noteworthy digital and non-digital assets. This is exactly what provides value to the community of NFT owners; they get something others don’t. But Beem hasn’t stopped there. The company has developed innovative functionalities to enhance the live event experience, features that deliver extra fun or utility, but which can only be unblocked or used by NFT owners. This is not limited to content anymore, but how users themselves are interacting e.g. at a specific live event.
NFTs as incentive for engagement (Watch to get paid)
Among the possibilities with NFTs, there’s also the creation of a rewarding system for streaming or binge-watching to drive engagement. This would be a perfect way for an operator to promote new content and get feedback from it.
Engagement is crucial for operators to keep their customers on side, especially those who pay big fees every month. What would be a high-impact way to achieve this? Well, gamification for starters. The operator can transform a content-specific event into a challenge where there’s a virtual award offered to the subscriber, e.g., an NFT for binge-watching the newest season of a particular show.
Beem has put this idea into action. Recently they streamed a live film premiere, where every person who attended the event received a NFT, created by the director, into their wallets,.
This might seem tricky at first, but it is not for the web 3.0 creators since they can drop the NFT’s directly in people’s wallets which they connected before.
The Future of NFT’s
Beem is not stopping there: They have clear ideas for the future use of NFTs in the entertainment industry:
These include ticketing – Beem wants to convert all the tickets in its app into NFT’s, which will have a significant impact on users and content creators. First, the creator can add a royalty fee on the secondary market which will regulate the price and avoid scalping or overpriced secondhand tickets. It will also serve as a reminder and identifier of the creator’s fans which will help content creators to filter content dedicated to certain people and groups.And let’s not forget those digital collectables, which can be gifted to the user alongside access to a certain event or content.
Content creators will continue to have ownership of intellectual property (IP) and will be able to create and sell or give away NFTs thanks to this initial IP. Also, users and creators both will benefit from a more secure way to provide and access content, in which no channel or platform can remove content once the license has expired or been removed.
It is clear that the NFT era just started, and we have a long way to go, but also with a lot of possibilities to be surprised by its impact on the media & entertainment industry. There is much more to come as regards NFTs, and we’re eager to hear about your opinions on the topic and the prospects you imagine for NFTs in our Industry. Feel free to leave a comment on the reply section of your preferred SM channel to interact with us.
Author: Susana Hidalgo, Marketing at 3SS