NFT Activity in the Entertainment Industry: Who’s Doing What

In just a little over two years, digital collectibles have gone from unknown to mainstream with the success of CryptoKitties. With hundreds of millions in market cap and thousands of NFTs created every day, it’s no wonder that major companies are interested in incorporating them into their business models. Who is leading this trend?

The “nft entertainment industry” is a term that has been used to describe the intersection of sports, film and television. The “nft entertainment industry” is now an important part of the economy in many countries around the world.

This article first appeared on Variety.

If the notion of NFTs makes you squirm, 2022 may not be the year for you.

The entertainment sector has taken notice of the digital format, which may take the shape of photographs, music, movies, shares in earnings, tokens allowing access to special events, video game goods, and more.

In 2021, the NFT market was valued at $18.5 billion. In comparison, in 2020, it was valued at $32 million, a new high for the industry. The growth from 2020 to 2021 was 57,676 percent, and the sector is still doing well, with sales of $6 billion already forecast for 2022.

The entertainment industry’s entry into the NFT market is motivated by the prospect of new income streams that might eventually become a part of the consumer landscape. The Variety Intelligence Platform assessed the current NFT positions of 26 companies in the television, film, video game, music, and sports industries to determine precisely what each business is doing in NFTs.

What’s interesting is that most of the present plans revolve on digital collectibles, with NFTs being made for properties like “Saw,” “Street Fighter 2,” “The Walking Dead,” Disney’s “Mickey and Friends,” and record-label star rosters.

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The enterprises included in VIP+’s NFT research have just touched the surface of their intellectual property, indicating that many organizations will only be beginning to plan for NFT declines in the next decade.

Entertainment corporations that control content aren’t only interested in collectibles. With their NBA Top Shot offering, Dapper Labs and the NBA became the first to sell video to fans, albeit in clip form. This is where a longer-term investment may be expected.

Consumers used to own the material they bought before the digital age. This changed when electronic-sale-through retailers, such as Apple’s iTunes, began selling a license that granted users access to the material but was not transferrable. Customers would be unable to access the material for which they had purchased if you switched to a system with a competing EST store.

NFTs have the possibility of ushering us out of the licensing period and back into a world where customers control what they purchase. This is particularly exciting for entertainment industries, since it promises two extra income sources, even if only one is implemented.

Cutting away the intermediary will provide the first new income stream. When a TV program or movie is sold via an EST, the merchant receives roughly 30% of the selling price, with the remaining 70% going to the content developer.

Because many entertainment businesses are developing their own NFT markets, they will be able to keep 100% of the sale profits. Theoretically, businesses may pass on part of these cost savings to customers, allowing them to compete more effectively with established marketplaces. However, as corporations seek to reach a condition of perpetual growth, prices are more likely to stay unchanged.

Media firms are also interested in the NFT smart contract’s concept, which enables the NFT developer to establish a permanent royalty price for resales upon minting the NFT. Although a resale fee is not required, many independent artists add one since it ensures that they will always earn from the value of their work rising over time. (For a detailed explanation of how this works, see VIP+’s interview with NFT artist Latashá.)

This has been noticed by the entertainment industry, which views smart contracts as a method to generate recurring income. Under this approach, if a customer buys an NFT of a movie for $10 and then sells it for $5, they will not recuperate the $5. Instead, the studio will take a small fee — up to 10% if Panini’s marketplace for reselling trading card NFTs is any indication — and the talent will get a cut as well.

That is the problem. To persuade consumers to purchase NFT versions of content, it will need to be communicated that they now “own” the content and can sell it once they’ve finished with it. But how can you really own something if you aren’t recouping all of your costs?

If entertainment companies go ahead and incorporate smart-contract resale fees into their content, there will undoubtedly be a backlash once consumers realize that selling a movie for $5 does not yield $5, and it will give the impression that big corporations are once again exploiting consumers through technology.

Ubisoft, the video game publisher, decided not introduce resale income on its Quartz marketplace because it was afraid of a reaction. It’s likely that content publishers may claim that this will be welcomed by fans since it will ensure that their favorite artists continue to earn from their work.

This, however, is deceptive. It’s one thing for fans to show their support for independent musicians, but it’s quite another to ask them to feel sorry for multimillionaires who live in mansions.

With NFTs providing a plethora of new income prospects, the entertainment industry is likely to make a slew of announcements in 2022. According to VIP+’s study, some of them may be perceived as cash grabs that ignore customer desire, while many will be creative as NFTs become more ubiquitous.

As an example:

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Non fungible tokens are a type of digital asset that is not interchangeable with other tokens. They are the most common form of cryptocurrency, and they allow for more complex and dynamic trading on blockchain platforms. The introduction to non fungible tokens will give you an idea of how these assets work, who’s doing what in the industry, and what you can expect in the future.

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