Last year's "DeFi-summer" left a mark and advanced the web3/crypto movement by introducing many people to exciting use-cases for blockchain and crypto technology. Currently, there's more than $92B locked in DeFi-protocols. That's huge.
Still, it's a far cry from mass adoption. Liquidity pools, collateralized crypto lending, and yield farming aren't familiar everyday terms that promote mass adoption.
Unlike DeFi, which is still pretty advanced stuff to get into, NFTs are (often) visual and are a far easier concept to "get." There's a close resemblance to the idea of digital asset ownership that's become familiar to many via Fortnite and other online games.
Like everything else blockchain that gains traction, the NFT space is chaotic and moving fast. From generative art via tons of animal avatar series to cryptodickbutts (yeah – I know, but I still bought and sold several. Which is either very amusing, very sad or just a sign of peak hype…).
Continuing, I'll assume you have some general idea of what NFT's are, and if not, I invite you to pause reading and simply Google "What is an NFT?".
Among all the craziness, there’s one specific type of NFT-project that I find fascinating: those building towards a long-term vision of building the next generation of entertainment networks.
A few weeks back, I tweeted this:
The next Disney will be a Metaverse-connected entity that's built bottoms-up via a strong community, where fans can become fractional owners of content, characters, and revenue.
I have worked in the entertainment industry for years, and I’m convinced that what we see now is the beginning of a new way to create IP and generate value from it.
Disney’s run with Marvel for the past 10+ years is a prime example of the current state of IP value creation; Movies, games, merchandise, theme park rides, and more. Top off with heavy marketing efforts.
It’s a top-down approach: the studio owns, creates, and pushes the content to the consumer, who pays the mula. The mula then moves through different value chain links, but the value flows to the top.
The model works well when you have an established intellectual property like the Marvel Cinematic Universe.
It gets riskier when you’re starting from scratch. You have to make big investments up-front and build fan engagement after. It may work, or it may not. The problem is that you won’t know until you have spent a lot of cash.
At some point, even Disney will have to retire (or at least scale back) the MCU initiative in favor of something fresh.
Surely there must be a better way? Oh yes, The New Way: Building Exponential Entertainment Networks.
The current prime example is Pixel Vault, but other exciting projects like the Bored Ape Yacht Club, Cyber Kongz, and more follow the same path.
Pixel Vault is an entertainment group with a vision to create entertainment IP and build properties for it, much like Marvel/Disney has.
Pixel Vault has several projects in the works that all tie together. Their tentpole is the MetaHeroes: a superhero-infused universe, not so different from Marvel. There will be a game in the future, and there might be other properties (movies, comics, series, etc.).
The big difference between Disney and Pixel Vault is their starting point: they’re starting with fan engagement first.
The ultimate success metric is whether the content engages fans or not. Pixel Vault started solving the most important thing first and built “backward” from there.
Now, how can they do that? By leveraging some of the fundamental components of web3 oriented products and services. Specifically, two important ones that's pretty tough to replicate for a legacy entertainment company:
Fan engagement through ownership
There’s no MetaHero game or movie ready to play or watch yet. There are a bunch of characters that will play a vital role in the future MetaHero Universe. These characters are NFT’s that fans of the project have bought and own.
Fans can become investors in the Pixel Vault project via ownership of these characters and by owning a share of the Pixel Vault project itself or even by holding a share of one of the planets inside the universe.
It sounds crazy when compared to Disney, and it is. It’s also pretty fxcking awesome.
Owning a piece of the game you play, the movie you watch, or one of the characters in the movie is next-level fan engagement.
It also unlocks another exciting component: revenue share. The different pieces of the universe (group ownership, character ownership, planet ownership) are entitled to share the revenue generated inside the ecosystem.
It also enables value to be distributed among fans, stakeholders, and the community, rather than solely flowing to the top and into the deep pockets of a select few owners.
Pixel Vault has raised several ten-million bags of dollars in funding by selling to the community investors. Funds they can now use to create the next phase of the entertainment network: properties (first: a game experience where the characters come to life).
Community-driven
Since community members are also owners, the project itself is community-directed to a certain degree.
How do we build the game? Partnering with a game studio? Acquiring a game studio? Building it in “in-house”? The community stakeholders take part in the process by voting.
This mechanic keeps the community continuously engaged with the long-term vision of the project.
Now, this is all new terrain, and Pixel Vault still has a lot to prove. It’s an experiment in progress with a lot of room to fail. Still, if nobody tries, nobody succeeds.
A few days ago, the project announced it had signed a deal with WME, one of the biggest talent agencies in Hollywood. That’s a pretty strong signal. Hollywood has already taken notice.
I’m excited about the future of Pixel Vault and the playbook they’re writing on how to create future Exponential Entertainment Networks.
Disclaimer: I have invested in the Pixel Vault / Metahero project.