Warner Bros Launches Ethereum Compatible ‘Lord of the Rings’ NFTs

At least one major Hollywood studio is looking to pivot its home entertainment business from DVD collections to NFTs.

Warner Bros. lets go NFTs for its iconic 2001 film “Lord of the Rings: Fellowship of the Ring,” the studio announced Thursday. Effectively serving as an all-in-one digital experience, the NFTs each include a 4K copy of the film, hours of bonus behind-the-scenes footage, tons of behind-the-scenes stills, and exclusive AR collectibles inspired by the film.

Web3 the company Eluvio developed the NFTs and hosts them, along with all the content data, via its Ethereum-compatible Content Fabric blockchain.

“The core digital assets themselves, not just the token, are on blockchain“, said Eluvio CEO and co-founder Michelle Munson Decrypt of the NFTs in an interview.

“They’re both owned and attested to and all the streaming you’ll see with the movie, with the AR objects, the interactive experience, the audio commentary, all of that is both authorized and distributed directly from the Content Fabric blockchain,” she said.

NFTs are unique blockchain tokens that signify ownership. In this case, a single “Lord of the Rings” NFT gives the holder a license to watch the footage in the same way as buying a BluRay DVD.

Ownership in the digital age

While these NFTs don’t promise holders any sort of commercial usage rights, each is essentially just a digital DVD with more immersive, immersive menus and some exclusive AR elements like Gandalf’s wand, whose QR code can be scanned with a smartphone and examined in different real-world environments, like a Snapchat filter.

This is the studio’s first attempt at offering full-length feature films as NFTs. Instead of buying movies from YouTube, Amazon or Apple, customers can feel a greater sense of digital ownership by keeping the NFTs in their MetaMask wallets (although Warner and Eluvio also offer a custody option). And users can buy LoTR NFTs with a credit card, USDC on Solana or Ethereum, ETH or Bitcoin– something you can’t do through Apple TV.

Could NFTs become the preferred way for cinematographers to feel a more intimate sense of ownership in the digital age?

It could also be argued that self-storage is only symbolic here, given Eluvio and Warner’s control of the metadata and iron-clad ownership of NFT’s IP.

Warner’s NFT Experiment

Jessica Schell, Warner’s EVP and general manager of Warner Bros. Discovery Home Entertainment, told Decrypt in an interview that the NFT launch is an experiment designed to see if a mass market audience has an appetite for direct-to-consumer content with Web3 elements.

“It would be easy to miss that it’s actually using Web3 or NFTs under the hood, and that’s by design,” Schell said. “We believe the initiative has implications as a potential new way to handle film distribution directly to our fans.”

If successful, Schell said Warner may explore turning more of its titles into NFTs — and may even build out its own NFT marketplace, where users can even fractionalize their NFTs and trade specific assets from their purchases, like the AR wand filter. (Warner Bros. shared the user interface for the NFT marketplace with Decrypt.)

“We want to learn, we want to engage, we want to understand what works in this space,” Schell said of Warner’s approach to Web3.

For now, the LoTR launch will only allow fans to trade their entire NFTs as a single package on Warner’s NFT Marketplace. But Munson told it Decrypt that fractionalization for these NFTs is definitely possible.

“Each of them can also be individually tokenized,” Munson said, adding that it would be “very easy” for Eluvio to do so in the future.

A time of transition

Warner Bros. is also exploring NFTs because the home entertainment industry is constantly evolving and the studios are looking for ways to stay competitive.

“We still sell physical products in the retail trade, but that market is declining. And meanwhile, digital distribution is a much larger share of the market, Schell said. “We have a long history of developing the business models to meet consumers where they are.”

But will NFTs become mainstream in Hollywood?

“I think for it to come to mass adoption, it has to be seamless,” Schell said. “There are still many perceived obstacles around engagement with the blockchain.”

But the NFTs also protect Warners’ IP from piracy – a major and ongoing concern in the film industry.

“The movie, for example, when it’s streaming, it’s protected through DRM, and that DRM is implemented by the Eluvio Content blockchain,” Munson said, referring to management of digital rights.

“The authorization for the keys that make up the DRM is controlled through blockchain contracts, which means that if you don’t own this NFT, you can’t stream it.”

As Warner Bros. is making its latest foray into NFTs, it’s far from the first Hollywood brand to do so. Lionsgate has released NFTs for its horror franchise “Saw”, Paramount released “Star Trek” NFTs, AMC launched “Walking Dead“NFTs earlier this year, and Netflix has faced some backlash for its”Stranger Things” NFTs, to name a few.

But Schell is not fascinated by the competition. In fact, she hopes more studios create Web3 experiences with their IP.

“We’re early in the game,” she said. “I love looking at what other studios are doing and I welcome everything.”