If you don’t know already, NFTs are here to stay.
A whole new market segment in crypto is born out of non-fungible tokens that represent immutable ownership of digital and real-world assets. At first, we mainly associated NFTs with trading cards, sports highlights presented by NBA Top Shots, and other digitally transformed artworks. As the market matured with more technology and creativity intertwining, we saw new verticals pop up, offering never-seen-before utility, scarcity, and status symbols.
The parabolic growth in the NFT market is not only attributed to art or digital collectibles. There are close to nine different verticals in the NFT space, including avatar collections, DeFi NFTs, collateralized NFTs, virtual worlds, trading marketplaces, play-to-earn games, music NFTs, and many more streams being created utilizing different forms of utility.
The total trading volume observed on marketplaces combined with games like Axie Infinity is over $16 billion to date. For comparison, in 2020, the total NFT sales accounted for $340 million. And according to Cointelegraph research, it is expected the NFT market will at least achieve $17.7 billion in trading volume by the end of 2021.
It is true that NFTs act as a medium to help democratize digital asset creation and exchange. They can also be used to monetize player-owned economies or facilitate further growth in the creator economy by empowering independent artists and creatives to monetize their loyal fan base.
From a business standpoint, brands and enterprises can leverage the global reach gained via NFTs to promote their products and services, as it is already a reality. So, NFTs don’t have any creative and commercial application limits.
On top of this wide range of utility weapons equipped to NFTs, they also provide access to a strong community where members share the same vision and long-term approach towards NFTs. This is one main reason why NFTs caught fire so quickly.
The best example of this would be the Bored Ape Yacht Club. The generative profile pictures of uniquely dressed apes with multiple unique traits just crossed $1 billion in trading volume on OpenSea. Also, it is one of the top NFT collections to experience the biggest celebrity wave, sending the average price from $3,000 to $250,000 in less than seven months. The community has been and will continue to be the key driver for such NFT collections, considering the utility is provided through a promising roadmap.
With the rise of BAYC, we saw more collections taking on the 10K PFP collection approach. Some had similar success and others failed miserably. The point here is — people resonated with NFTs such as BAYC, MAYC, and CryptoPunks because they introduce emotion, scarcity, and authenticity in a single digital format on the blockchain. Additionally, they have a massive online community in pop culture to support the project and drive more attention. But there’s more.
The growth of NFTs is mind-blowing. But we have not seen any major sector outside the art industry take advantage of this revolutionary market-expanding technology. That is slowly changing now.
As investors and mainstream users continue to see long-term value in NFTs, we can expect innovative use cases to emerge that go beyond digital art and status symbols. Some of the promising ones we see play out right now are music NFTs and in-game assets associated with play-to-earn games.
No one can deny the impact NFTs are having on the gaming industry. In fact, some might say gaming and NFTs make a perfect marriage, given their ability to help users accrue value for the skill sets they possess.
In the music industry, NFTs can potentially break down the barriers for independent artists and help them create new business models that compensate in an equitable way. Many artists are currently exploring new avenues involving crowdfunding albums and revenue-sharing programs, with fans owning particular NFT sets.
Regardless of the emerging trends in NFTs, there still seems to be something missing. Most of the collections or projects manage to only target a niche community or limited consumer base that doesn’t necessarily have the global appeal. Now, it doesn’t mean PFP-based NFTs will not thrive in the future. But to tap into a mainstream fan base, we need something beyond ordinary art and collectibles.
The largest untapped or underserved market in the NFT landscape is movies-oriented collections. The film industry probably presents the best fan bases in the world, giving actors, producers, and other creators a new way to promote movies and increase fan engagement with the help of NFTs.
If there’s one thing NFTs proved over the past year, it’s that they improve fan engagement and create more excitement in a community. Now imagine if a popular worldwide fan base gets introduced to NFTs. The rewards for creators and other crew members will be massive. And in the process, the fans interact with their favorite actors on a digital platform, and sometimes in person.
For studios, this can act as a new avenue for marketing and film promotions. It is far simpler and more cost-effective to launch an NFT collection than traditional movie promotional activities. In addition, the possibilities with NFTs are endless.
Filmmakers and producers can create various offers around their NFTs to increase ticket sales and overall viewership. Another amazing benefit of releasing movie-oriented collections is that fans will showcase their NFTs in public, creating more demand and free social promotions about the film or exclusive content launched by filmmakers or animators. Streaming films using NFT-controlled access cards could also be one possibility.
Sony and AMC theatres recently decided to promote Spider-Man: No Way Home through an advanced ticket sale. Both partners also included 86,000 NFTs to early ticket buyers. The demand was so much that the AMC site couldn’t handle the traffic and ultimately extended the wait times for many buyers. Another film that has already launched its first NFT collection is Dune. The blockbuster movie partnered with Lineage Studios, iv gallery, and MakersPlace, to launch assets inspired by the Sci-Fi world in the form of NFTs. Every major production company will soon adopt such promotional campaigns.
In 2021, we saw Warner Brothers take their movie promotions for The Matrix Resurrections a step further by dropping an avatar NFT collection. They planned to release 100,000 avatars for $50 each. With the growing popularity of NFTs and buzz surrounding the movie, all of them sold out while crashing the Nifty marketplace. The money collected from the primary sale is not significant because millions of fans buying NFTs drives more activity, engagement, and most importantly, aligns with your business goals.
Outside of films, NFTs can help creators raise money for their films. By leveraging Defi protocols and NFT marketplaces, content creators can start crowdfunding for their video products by tokenizing or selling NFT sets. On top of acquiring required capital, creators can also build a passionate community that allows them to interact and distribute exclusive clips or content directly. So NFT-backed financing for films will be a game-changer for independent artists in the Hollywood industry.
The current NFT landscape involves a learning curve that many interested buyers must go through. But to seize the market opportunity in the movie industry, we need easy-to-use platforms that allow any user to purchase NFT assets seamlessly.
It is also important for the NFT platform to have a marketplace functionality that supports all forms of media. It can be straight-up pictures, clips taken from a movie, or even audio files.
We talked about uplifting independent artists through NFTs. So, the platform also needs to integrate a financing option to support new films with talented actors on board. Mogul Productions is one such platform that finances projects in a decentralized way. It allows token holders of STARS, the native token of the movie marketplace, to vote on their favorite film. If the film turns out to be profitable, 50% of the profits will be distributed amongst token holders.
Along with an incentive mechanism for users, the platform should also be able to remove entry barriers in the form of gas fees. Mogul is planning to use a non-custodial gas-less wallet and will soon be integrated into the web platform.
So, in essence, platforms with zero entry barriers with reward ecosystems like Mogul are needed to simplify NFT gamification in the movie industry.
NFTs have established themselves as a new asset class. And it is time to expand its functionality beyond art and tap into the most engaging audience present in the movie industry. Everyone can benefit from launching a unique NFT collection, from photographers to producers. Blockchain technology can transform many film operations from financing to marketing to preventing content piracy. So, we will likely see many brands and movie franchises jump on the NFT bandwagon to create sustainable revenue and promotional channels.