Why are movie NFTs still so terrible?
Make loyalty, not products
Warner Bros. is having an interesting year. Barbie just surpassed $1B, the first female-directed movie to do so.. Greta made an awesome movie, but it’s really Mattel’s licensing teams who have been working overtime to ensure that Malibu pink is the color of the year, and ubiquitous in everything from shoes to cosmetics. Want the full list? This article has several dozen collabs and is missing many more.
It’s becoming more common for film and TV debuts—especially those that are built off mainstream, existing IP like games, books, or toys—to have a physical and digital blitz like this that not only lets audiences know about the media launch, but also gives consumers dozens of different ways to connect (and spend money).
In the same breath as this universally-lauded Barbie success, Warner Bros. has been delving into its own IP treasure box and exploring merchandising through NFT drops for Lord of the Rings, Superman, and the Flash. These projects have been universally panned. Like, top to bottom panning. The trailer. The item artwork. The “utility.” The resounding takeaway was that WB had taken old-school DVD menus, thrown them online, and slapped a $30-$100 entry fee on top. All three film projects have been wrapped up in a “Movieverse” platform run by a company called Eluvio with its own chain used for little more than these WB mints.
What has happened:
Here’s a general overview of what these collections have looked like so far, and why they’ve failed to gain much notice:
Content
In each case the content is little more than 4K streams and some extra footage.
The artwork would be lacking for literally any NFT project, but especially one from a major enterprise.
Utility
Aside from additional content, the only other perk was being able to own The Flash at home a few weeks after its dismal debut. For 3x the cost of an average movie.
No connection to gaming.
No relationship to physical merch.
No connection to any Warner Bros park (yes they exist).
Gamification
The Movieverse has a leaderboard that only shows what wallets have the most items held. It seems users have the option of creating a username for it, but most don’t. And that's it, it’s just a list of wallet addresses with the number of items bought. No engagement, no achievements, no benefits for being at the top.
Beyond that, there’s also zero connectivity between the collections: buying into all three means nothing, having one does nothing for buying into the next, etc.
In general, the whole thing smacks of ho-humness: lacking polish buyers expect, any sense of deeper storytelling, and a complete disconnect from the broader merch worlds of each of these films. Despite nearly Barbie-level physical collectible ecosystems for each of these movies, none of it played into this.
Nor did WB’s massive gaming division. Warner Bros. is pretty unique in the media realm because it has its in-house games publishing arm. There are Lord of the Rings games galore, and some stellar DC-universe titles like the Batman: Arkham series. While all of the them are web2, there wasn’t even a web2-web3 Fortnite x dotSwoosh attempt to link the fandoms and how people engage with them (e.g. if you’ve achieved X in Arkham Knight, you get Y style NFT as a special badge of honor).
The Flash came out this year, well after the highflying “let’s just go for it!” NFT days of the years prior, which is one way of saying WB is all-in on using web3 and isn’t shying away from bear markets. Which I applaud, but also means that they need to start raising the bar to meet expectations, and start to manage their own internal ones. These collections were mis-priced relative to what they were, and somewhere a WB exec tried to do too much in attempting to make some money while reducing delight and access for fans. Why? Even with a complete sell-out, the Flash’s NFT collection was going to make $550k, or the equivalent of 45k average US movie theater tickets, or 0.2% of the movie’s box office (would’ve been far less if it wasn’t one of the biggest flops of all time). If the goal couldn’t have been money, but the price was too high and the item count too limited for actual engagement, what was it?
As the space gets more sophisticated, studios need to imagine these collections as part of vast loyalty programs that infiltrate every aspect of the IP’s world across retail, ecommerce, gaming, physical locations, etc., delighting users during the collecting journey, and rewarding them with things they’ve never seen before. They are loyalty points, not high-priced collectibles. A free collection would bring more engagement to the table than any of these (mostly not sold-out) drops.
What should happen, a Case Study:
Potential collectors—especially the deepest fans who would be the expected audience for these collections—can smell laziness and cash grabs. They’ve already consumed all the behind-the-scenes footage, the interviews. To show them something new and give them reasons to buy, studios and creative teams need to reach deeper into lore and history, and make sure these projects don’t feel like a high-priced one-and-done project.
At Animoca, I had the pleasure (and personal excitement) in launching Jim Henson’s first NFTs. I created multiple drops around Henson’s iconic cult classic, the Dark Crystal, which was celebrating its 40th anniversary. But it wasn’t enough to take some screenshots and slap them onto a square, WB-NFT-style. Nor was it enough to just launch the items and walk away, even with my platform’s deep collecting gamification, chases, and leaderboards and awards. Here’s what we did:
Content: focusing on the new
The first collection consisted of never-before-seen archival artwork from Brian Froud, Henson’s co-creator and artist for the film. Every character and beast was hand drawn, and the NFT artwork animated as if it were being drawn again by Froud. It showed uber-fans things that had never seen the light of day.
The second collection featured interactive 3D sculpts from Weta Workshop, Henson’s other licensee who makes incredible physical collectibles. I wanted to create something that would tie in other Henson partners, reinforcing the multiple touch-points that fans had in the Dark Crystal world. But we went a step further, debuting future, not-yet-released sculpts from Weta. It was a digital preview, in collectible form, of other upcoming merch.
To top it off, because it was digital we were able to do things with these items that even Weta couldn’t, like creating rarer forms out of marble and—of course—crystal.
Utility
Buyers who ranked in the gamified collecting metagame unlocked unique NFT awards, which came with IRL rewards:
Merch: Brian Froud books and Weta sculptures, some of which we’re totally free rewards, but others just discounts, incentivizing my consumers to head over to Weta to spend money with them. More engagement with IP-based stuff, more money for Henson, more happiness for fans, more wins for licensees
Physical locations: tickets to Dragon Con, letting winners get access to places they otherwise might not be able to go
Gamification
Even without winning a single award, the drops were run as collectible games. Complete sets, race to be the first with everyone, rank with the best print count items, and winnable unique awards. Complex and fun.
To pat my team on the back: this is exactly what fans wanted to see. Multiple levels of engagement, low-priced buy-ins with high-profile rewards, and things that deepened their understanding of the lore and expanded merch universe of DC.
While Henson has no loyalty program, you can bet that this would have integrated with that ecosystem, but as it was we ran it as close to a Dark Crystal loyalty fan club as we could.
What’s next
Let’s call all of these the early experiments. But one of the benefits of the blockchain is also what makes missteps so risky for brands: this will live on forever. Unsold physical merch is swept off shelves and destroyed. Unsold NFTs remain indefinitely as a badge of a lackluster campaign and mismatch in expectations.
Other projects in film have leveraged NFTs for crowdfunding, a concept that historically has been fraught with issues. While it seems nice to think about under-the-radar creators getting alternative funding for the types of movies major distributors won’t touch, setting up this kind of financialized relationship with future fans has led to more failures than successful debuts and also sets up scenarios where creators are dealing more with funders who think they’re investors than actually making the content come to life.
Either way, Hollywood will continue to go down this path, and the more it focuses on thinking of NFTs as engagement chips that reach into other core business lines—rather than new products—the more powerfully it will immerse its audiences and open their wallets. By far the best example of this in the web2-based film world is A24’s loyalty program, with a mix of lore-deepening publications, licensed merch, and incentives for theater-going. Imagining bringing this into the web3 world, which will make the connectivity between merch and physical theaters even tighter, with net-new experiences on top, is something that gets me beyond excited. Because this is the future.
Heads up, A24, we’re going to be talking next week.