Fox invests millions in NFTs and blockchain

Fox Corp. operates the only one of the four major US broadcast networks not tied to a major direct-to-consumer streaming subscription. The company is also the only one among its peers to launch a dedicated Web3 and NFT division.

The two things are connected, says Charlie Collier, CEO of Fox Entertainment.

“We have a competitive advantage in building a business on the blockchain,” he says. “We are able to invest in that, instead of having a vertically integrated SVOD [subscription video-on-demand] service; we don’t spend billions of dollars on content and focus on churn.”

Last year, Fox established Blockchain Creative Labs, a venture located in the animation division of Bento Box Entertainment. BCL’s mandate: to create, launch, manage and sell non-fungible token content and experiences as well as other digital goods.

But the strategy is not to cash in on the craze surrounding NFTs as speculative digital collectibles, according to Collier. The long-term vision for BCL is to enable new business models for content distribution and consumer engagement – ​​cutting out the streaming platform middleman and, one day, allowing fans to literally own a piece of their favorite TV shows.

“This will pay dividends well into the future,” says Collier of Fox Corp.’s blockchain investments.

Collier credits his bosses, Rupert Murdoch and Lachlan Murdoch, for fostering an entrepreneurial business culture that supports big bets. They are all-in on the blockchain, he says. “The Murdochs have always been about looking around corners and investing in what will become successful enterprises.”

Fox says it is prepared to invest up to $100 million in NFT and blockchain initiatives, to signal the seriousness of the sector. (Collier declines to say how much the company has spent to date.) In August 2021, Fox Corp. paid an undisclosed sum to buy a minority stake in Eluvio, a startup whose platform is designed to distribute and monetize premium content using blockchain to verify ownership and provide access control.

BCL is led by Scott Greenberg, co-founder and CEO of Bento Box, the studio whose hits include “Bob’s Burgers.”

“As an animation company, all of our assets are already digital. Our content is built on databases, he says. Embracing NFTs and blockchain “seemed like a natural progression for us.”

The business potential for Web3 far exceeds what you see in today’s marketplaces for digital collectibles, says Greenberg. The blockchain marks the first time you can grant real digital property rights. Greenberg offers this thought experiment: Consider an environment similar to Napster, the infamous peer-to-peer sharing service that was sued out of existence two decades ago for facilitating widespread piracy. But instead of a value-destroying free-for-all, the Web3 version would give content owners the ability to monetize each transaction. “We’re reinventing home video,” he says.

So far, BCL has produced NFT drops for Fox’s “The Masked Singer,” on a website called MaskVerse, which spurred more than 300,000 people to create digital wallets to collect the NFTs. It has also released digital collectibles in partnership with WWE, whose “Friday Night SmackDown” airs on Fox.

The next big test of Fox and BCL’s blockchain ambitions comes with “Krapopolis,” a new animated comedy set in the mythical world of ancient Greece from Dan Harmon, co-creator of “Rick and Morty” and “Community.” Ahead of the show’s premiere sometime in 2023 on Fox, BCL has launched krapopolis.com.

The first collection of “Krap Chickens” went on sale on August 11, priced in Ethereum cryptocurrency equivalent to $184-$330 a piece at current exchange rates. NFT buyers get exclusive access to a number of benefits, including token-gated access to content and private screening rooms, invitations to online meet-and-greets with cast and producers, exclusive first-look access to upcoming NFT drops, and the ability to vote for elements that will be included in the show (eg an episode’s end credits song). NFT holders who accumulate enough credits can even secure a spot as an “extra” in the series — with their likeness appearing on a background character in “Krapopolis,” Greenberg says.

Krapopolis.com dropped 10,420 Chicken NFTs (get the numeric pot joke?), produced and illustrated by the show’s animators. For Harmon, this has been a series development process like no other, and the maverick writer is not surprisingly doing well.

“‘Krapopolis’ is unlike any series I’ve had a creative hand in,” says Harmon. “Building a fully realized world and a cast of crazy characters on the blockchain has never been done before, and in terms of fan experience, it will come to life in a way no other show has.”

The “Krapopolis” project isn’t really about generating increased revenue through NFT sales, Collier reiterates: “It’s about letting the fans themselves choose something they’re passionate about.” To hear Collier tell it, just as Ryan Seacrest taught Americans to text on Fox’s “American Idol” in the early 2000s, Fox and Blockchain Creative Labs will be at the forefront of demonstrating the value and viability of Web3 in the world of entertainment.

But will these business models take root and become a dominant mechanism for content distribution? Greenberg argues that a generation familiar with the metaverses of Fortnite, Roblox and Minecraft – familiar with the concepts of ownership in a virtual world – is the future Web3 audience of the entertainment industry.

Conjuring a popular baseball metaphor, Greenberg says Web3 and NFTs aren’t even in the first round. “We’re in batting practice,” he says. “The game hasn’t started yet. This is like AOL and CompuServe for the future.”

Pictured above: One of the “Krapopolis” chicken NFTs for Dan Harmon’s upcoming Fox show