Are NFTs The Start Of A Hollywood Revolution?

September 1, 2022 by Mimi Phan

The market for non-fungible tokens (NFTs) has grown significantly over the past year alone. After NFTs broke into the limelight in 2021 and established themselves as a strong sub-category of the crypto space, they have truly never looked back – and are now ushering in a new age of digital identity and product ownership. But are NFTs the start of a Hollywood revolution?

Even though NFTs have yet to reach full global adoption and there are still some legal obstacles to clear, it’s quite obvious that the market isn’t stopping anytime soon (and that includes in Hollywood). Several of the most popular NFT collections are selling easily for six figures – even with the current market downturn.

Most people who enter the NFT space do so to make money. They purchase NFTs, wait for their prices to rise, then flip them for a healthy profit. However, like crypto before them, NFTs are very functional – and the movie industry has been quick to embrace these tokens.

So, what is NFT Hollywood and its future? Can these tokens change the movie landscape for the better?

Problems With The Traditional Movie Space – And How NFTs Solve Them

To understand the objective of NFTs in Hollywood, it’s important to examine some of the biggest issues that filmmakers and investors face in movies. While NFTs don’t necessarily solve all of these, they do provide a way to work around several major challenges. 

General Film Releases

What is NFT Hollywood? Surprisingly, the first use of NFTs in Hollywood appears to be for general movie releases.

Over the past year, several musical artists have chosen to forgo traditional methods and release their work as NFTs. Tennessee-based rock band Kings of Leon became the first act to release their album as an NFT in 2021. And since then, several other artists – including rapper Tory Lanez and Canadian singer Grimes – have followed suit.

In the movie space, a similar trend has emerged. Filmmakers are now releasing their work exclusively as NFTs, with these tokens providing the perfect way for them to earn and keep all of their revenue. Instead of sharing the money they make with a movie studio, they can easily capitalize on their name and release a film as an NFT. Any money they make, they keep.

Zero Contact, a movie featuring two-time Oscar winner Anthony Hopkins, became the first Hollywood feature film to sell as an NFT last year. Since then, Hopkins himself has ventured deeper into the NFT space, launching a collection that depicts his career in August 2022.

Funding For Movies

There’s no getting around it: money makes the world go round. And in the highly competitive movie business, finding a studio or a group of investors willing to fund your movie isn’t so easy, since there are just so many other filmmakers out there.

For most independent filmmakers, the best bet is to take a subpar deal from investors or studios. But at the end of the day, these people make the lion’s share of the movie’s revenues – and on the other hand, filmmakers are left with either a lump sum payment that doesn’t reflect the true value of their work or a very small percentage of the money their movie makes.

NFTs can help to solve this problem. A filmmaker who is sure of themselves can release NFTs and use them as a means of funding their movie. With NFTs, the filmmaker gets to keep 100% of their earnings. And since NFTs have royalty payments coded into them, the filmmaker can also earn a cut from any secondary sales.

Interestingly, movie studios themselves are getting in on this. In March 2021, Forest Road Company, an American financial services company, launched a $20 million fund aimed at monetizing movie content. With the fund, the company plans to invest in movies in exchange for the right to sell NFT collectibles based on the films. Once Forest Road earns its returns, producers will also be able to earn a cut of the movie’s earnings.

Image by Jonathan Faria on Pexels: What is NFT Hollywood?

Merchandise Sales For Movies

Merchandise sales have historically been one of the best ways to monetize movie content. Once a movie has been released to critical acclaim, the movie studio will ideally release merch to boost sales and provide a better sense of ownership for fans.

The problem with this is that the merch tends to go through different channels before eventually getting to movie fans. Several third parties assist in moving the merch, each taking their cut in the process. Once again, filmmakers are left with only a fraction of what they should be making.

With NFTs, filmmakers can finally cut out the middleman. Instead of going through several parties to move their merch, filmmakers can simply release them as NFTs and sell directly to their fans.

Earlier this year, Oscar-winning filmmaker Quentin Tarantino released NFTs from the 1994 cult classic Pulp Fiction. On offer was the original handwritten screenplay for the movie, broken down into several iconic scenes with director’s commentary.

Despite a lawsuit from the movie studio, Tarantino’s first NFT sold for a whopping $1.1 million. With that kind of money in mind, many filmmakers can learn from this innovation going forward.

Rewards For Fans

NFTs could also provide a great way to reward fans across the board. Like every other industry, the movie space is all about creating connections between filmmakers and fans. And one of the best ways to keep that connection is to offer rewards to the fans who watch movies. These rewards could be anything from special releases to the opportunity for fans to attend premieres or even see these movies with their favorite filmmakers.

NFTs can be a great way to get this done. Filmmakers could sell NFTs to their fans, promising them special rewards when they buy these tokens. With NFTs being hosted on blockchains, filmmakers will be able to track their buyers to pick out specific winners to reward. The process is transparent and, most of all, very easy.

How Will NFTs Change The World Of Cinema?

There’s a significant chance that NFTs are far more useful in movies than we know at this point. The space is still very young, and there is a lot of development still to be undertaken over time.

So, are NFTs the start of a Hollywood revolution? There’s no reason to believe otherwise right now. NFTs provide an opportunity for filmmakers to be more independent and control the direction of their movies. They also allow filmmakers to earn more money than they would if they made their work with movie studios. All in all, these tokens are a win-win for filmmakers.

While it might take time for NFTs to take over Hollywood, there’s no doubt about it – the revolution has begun!

Featured image by Edgar Colomba on Pexels