NFT-mania has officially seized the indie film industry. One area where the NFT model has already shown proof of concept is in movie merchandising. Way back in 2018, 20th Century Fox released limited-edition Deadpool 2 digital posters to promote the Ryan Reynolds superhero spoof. For the launch of Godzilla vs. Kong in 2021, Legendary Entertainment brought out a seven-piece collection of original work inspired by the film, created by Australian digital concept artist BossLogic (Kode Abdo), which could be purchased as NFTs. The digital work itself can be easily copied and pirated online but the NFT, which is secured via blockchain technology guarantees the certificate of authenticity, so owners can buy and sell the NFTs like any physical collectible.
Now it is the movies’ turn, as directors, producers, distributors and financiers are turning to NFTs. The examples are already coming thick and fast:
- Projects from Kevin Smith, Jennifer Esposito and Anthony Hopkins are among those looking to the technology of non-fungible tokens as an alternative to the traditional movie business.
- Indie industry first-mover Kevin Smith took the plunge in April 2021, announcing he would auction off his upcoming horror feature anthology Killroy Was Here as an NFT. “Whoever buys it could choose to monetize it traditionally, or simply own a film that nobody ever sees but them,” Smith noted.
- Jennifer Esposito’s The Fresh Kills offering is structured so that Upstream investors will be at the front of the line should the movie make money and receive a 110 percent pay out on their investment before other shareholders in the film receive any dividends or returns. After the pay out, the investors’ preferred shares convert to common shares representing 25 percent of the copyright in the company/film. The remaining 75 percent are owned by the Fresh Kills production company (including the writer/director and producers) and Horizon, with the proceeds being distributed in a typical indie film backend structure allowing talent participation derived from the producing company’s shareholder interest in the film.
- NFTs featuring previously unreleased "secrets" from Quentin Tarantino's iconic 1994 film Pulp Fiction being auctioned off - each NFT tied to pages from Tarantino's original handwritten script of the film that reveal new information about the process of developing the story.
- Animated series “Stoner Cats” raised USD 8.4m at the end of July 2021 in a sale of NFTs (that grant holders the exclusive right to watch episodes), selling out in only 35 minutes.
This is only the beginning and key executives in the film industry are making it very clear that film and TV studios are beginning to look into NFTs.
One area of real potential excitement is the possibility that NFTs might not only provide a new, lucrative source of merchandise, but could also help to shape the industry in new ways. This will include enabling smaller, indie production firms to secure financing, as well as potentially using NFTs to let viewers vote on plot developments, among other things. NFTs will give production companies more control over the financing of their work, while also bringing them into closer contact with their audience. They can decide how many NFTs of their film they want to distribute and if they want to package it with exclusive content such as artwork or behind-the-scenes footage.
Put simply, it could be great way to finance a project and build a fan base that will watch the film once it is released. In terms of financing, NFTs are already being suggested as a part of the finance plan for a project either as a pre-sale or a carved-out item that would then be given to equity investors as collateral. Industry players even now are suggesting that an NFT strategy can provide 5-10 percent of the financing which could be enough to move a project over the line.
The future may be an exciting one – NFTs may well result in new, emergent formats and experiences within the TV and film industry - NFTs granting the right to vote on how the next season of a TV show plays out, or access to special content that can only be seen by NFT holders. This next level of fan engagement is when demand for NFTs may skyrocket and change how fans interact with their favourite IP. One thing that is sure, uses for NFTs within the film and TV industry will evolve over time. And NFTs will provide new and exciting ways for creators to forge deeper and more meaningful relationships with their supporters.
Put simply, NFTs could be great way to finance a film or TV project and build a fan base that will watch the film once it is released.