Hollywood has not let the NFT dream die

The digital assets known as NFTs burst into public consciousness in recent years when the Bored Ape Yacht Club’s louche cartoon breasts and the pixilated portraits known as CryptoPunks began trading for hundreds of thousands or even millions of dollars.

The rapid rise was followed by an equally rapid crash. But in Hollywood, where studio talent agencies have embraced online influencers and culture as opportunities for growth, the NFT craze never ended — and it may be hotter than ever.

One of Tinseltown’s biggest talent agencies, UTA, announced last month that they had signed Proof, the company that created the popular NFT project Moonbirds. Other NFT clients in the list include CryptoPunks, whose pixilated portraits include some of the most expensive NFTs ever sold. Meanwhile, competitor CAA’s stable includes musician Daniel Allan, who helped the pioneer sell songs in NFT form. And the studios are also up and running: Last autumn, Warner Bros. launched NFTs based on the 2001 film The Lord of the Rings: The Fellowship of the Ring.

The enthusiasm for NFTs is part of Hollywood’s broader interest in crypto and other “Web3” technologies, from the alternate reality known as the metaverse to virtual singers and actors.

“When we think about Web3, NFTs and the metaverse of the people we represent, they are some of the most creative people in the world,” said Adam Friedman, an executive at Creative Artists Agency who leads a cross-departmental group. agents and managers focused on the evolving landscape of NFTs and Web3. “It’s all a new canvas for them, and it’s a canvas for them to really showcase their creativity, their art form, whatever it may be. And as technology advances, you know, it’s more of an ability to show off that creativity.”

There have been some bumps along the way — like the backlash during last year’s Oscar season over an NFT tribute to the late “Black Panther” actor Chadwick Boseman. But that hasn’t seemed to affect the broader Hollywood interest in NFTs and Web3 technology, even if NFTs’ popularity is declining overall.

What they are used for

NFTs – or, more formally, “non-fungible tokens” – are digital files that come with a cryptographic hash (similar to a serial number) and ownership history stored on the blockchain, the same technology that underpins cryptocurrency.

The entertainment industry has been interested in them for several years. For example, actor Seth Green worked to spin an entire TV show around his Bored Ape NFT last year before it was stolen (and then returned, allegedly after a ransom payment). But unlike some companies and individuals who have jumped on the NFT trend before immediately jumping off (much to users’ chagrin), talent agencies like CAA and entertainment companies like Fox envision a much longer timeline for returns on their investments, on the order of years .

Melody Hildebrandt, Fox’s chief information security officer and president of subsidiary Blockchain Creative Labs, said there is an opportunity for companies like hers to create the back-end technology that will enable talent less familiar with the NFT concept to test the market.

Key questions for entertainment companies to consider before jumping into NFTs or Web3 investments include whether a brand is prepared to be in the industry over a long period of time, she said, and whether they have a good understanding of why the creator they’re working with using the technology.

“Otherwise, there’s just tons of inconvenience, and communities are really disappointed if they feel like they’ve been ripped off,” Hildebrandt said. Or they really could have been defrauded – there have been many “rug pulls” when it comes to NFTs, where project managers run off with users’ funds.

Getting off the ground with that kind of fan backlash may also require NFT creators and the studios or agencies that support them to build out the infrastructure needed for a successful launch.

For Fox, the potential upside is a new form of content distribution. The studio didn’t dive into the streaming wars like some competitors did with services like Hulu, Disney+ and Peacock. Instead, Hildebrandt said, Fox is thinking about what the next version of that is, and “it’s a good hypothesis that Web3 is.”

Makes it easier to test the water

Friedman said CAA’s non-Web3 clients want to understand how they can take advantage of NFTs and similar technology, including blockchain technology and the augmented reality known as the metaverse, to tell stories. Together, he said, they make up a new and immersive version of the Internet.

He points to Hume Collectivea virtual talent pool of “metastars”—including singing animated rabbit known as angelbaby — that CAA signed in January. Hume’s creations have followers and communities already rooted in the crypto and NFT world, and are a staple of this type of content.

“When this NFT space really came about, [there was a] very kind of basic notion of putting out some kind of digital collectible or digital asset,” Friedman said. “Today, as we think about the space and what really excites me [are] all the use cases around Web3, or involving Web3, that the end user doesn’t even know are powered by Web3.”

At a panel on NFTs and creators at CES in January, Lesley Silverman, head of UTA’s Web3 division, said the firm saw the power of the combination of superfandom and blockchain exploding in late 2020 — primarily around the NBA’s peak. Shoot NFTs of league players.

“We knew that these tools that would be brought to creators in this space that we didn’t even call Web3 at the time would be interesting to our customers,” said Silverman, even those who weren’t very tech-savvy. “We needed to be at the forefront and be able to demystify what was going on,” she added. “And soon after, we started representing creators who were using the tools of Web3 to kick in doors that they couldn’t kick in in their own industries.”

Friedman and Hildebrandt were quick to stress that even though the market is down, the emphasis right now needs to be on continuing to build out infrastructure that makes interacting with Web3 technologies like NFTs easier.

“I think we have to stick to the decentralization goal, that’s where all the freedom is,” Hildebrandt said. “That’s where the actual upside for equity and payments is, but there’s a lot of work to be done to smooth that out to actually make it available.”

Thanks to Lillian Barkley for copy editing this article.