Fox Corp. operates the only one of the four major US broadcast networks that is not affiliated with a major direct-to-consumer subscription broadcast play. The company is also the only one among its peers to launch a dedicated Web3 and NFT division.
Those two things are connected, says Charlie Collier, CEO of Fox Entertainment.
“We have a competitive advantage in building a business on the blockchain,” he says. “We’re able to invest in that, rather than having a vertically integrated SVOD [subscription video-on-demand] service; we’re not spending billions of dollars on content and focusing on migration.”
Last year, Fox founded Blockchain Creative Labs, a venture housed in its animation division Bento Box Entertainment. BCL’s mandate: to create, launch, manage and sell immutable content and experiences, as well as other digital goods.
But, according to Collier, the strategy isn’t to cash in on the craze around NFTs as speculative digital collectibles. The long-term vision for BCL is to enable new business models for content distribution and consumer engagement – cutting out the middlemen of the streaming platform and, one day, allowing fans to literally own a piece of their favorite shows television.
“This will pay dividends long into the future,” says Collier of Fox Corp.’s blockchain investment.
Collier credits Fox Corp.’s leadership, Rupert Murdoch and Lachlan Murdoch, for fostering an entrepreneurial business culture that supports making big bets. They’re all on the blockchain, he says. “The Murdochs have always been about looking around the corner and investing in what become successful ventures.”
Fox says it is prepared to invest up to $100 million in NFT and blockchain initiatives, seeking to signal its seriousness in the sector. (Collier declined to say how much the company has spent to date.) In August 2021, Fox Corp. paid an undisclosed amount to acquire a minority stake in Eluvio, a startup whose platform is designed to distribute and monetize premium content using blockchain to verify ownership and provide access control.
BCL is led by Scott Greenberg, co-founder and CEO of Bento Box, whose studio hits include Bob’s Burgers.
“As an animation company, all of our assets are now digital. Our content is built on top of databases,” he says. Embracing NFTs and blockchain “seemed like a natural evolution for us.”
The business potential for Web3 far exceeds what you see in today’s digital collections markets, Greenberg says. Blockchain marks the first time you can grant real digital property rights. Greenberg offers this thought experiment: Consider an environment similar to Napster, the infamous sharing service that was sued out of existence two decades ago for facilitating rampant piracy. But instead of a free-for-all value destruction, the Web3 version would give content owners the opportunity to monetize every single transaction. “We’re reinventing home video,” he says.
So far, BCL has produced NFT tokens for Fox’s “The Masked Singer” on a site called MaskVerse, which prompted more than 300,000 people to create digital wallets to collect NFTs. It has also released digital collections in partnership with WWE, whose “Friday Night SmackDown” airs on Fox.
The next big test of Fox and BCL’s block ambitions comes with “Krapopolis,” a new animated comedy set in the mythical world of ancient Greece from Dan Harmon, co-creator of “Rick and Morty” and “Community.” Ahead of the show premiering sometime in 2023 on Fox, BCL has launched krapopolis.com.
The inaugural collection of “Krap Chickens” went on sale on August 11, priced in the Ethereum cryptocurrency equivalent of $184-$330 each at current exchange rates. NFT purchasers receive exclusive access to a number of benefits, including walk-in access to content and private screening rooms, invitations to online meet-and-greets with cast and producers, exclusive first-look access to future NFT landings, and the ability to vote on elements to be included in the show (say, the ending song of an episode). NFT holders who accumulate enough credits may be able to secure a spot as an “extra” in the series — with their likeness appearing as a background character in “Krapopolis,” Greenberg says.
Krapopolis.com threw 10,420 chicken NFTs (get the pot number joke?), produced and illustrated by the show’s animators. For Harmon, this has been a series development process like no other, and the quirky writer is surprisingly fine with it.
‘Krapopolis’ is unlike any series I’ve had a creative hand in,” says Harmon. “Building a fully realized world and a cast of crazy characters on the blockchain has never been done before and in terms of the fan experience , will be in a way that no other show has been.”
The Krapopolis project isn’t about generating additional revenue through NFT sales, Collier reiterates: “It’s about fans self-selecting into something they’re passionate about.” To listen to Collier, just as Ryan Seacrest taught Americans how to text on Fox’s “American Idol” in the early 2000s, Fox and Blockchain Creative Labs will be at the forefront of demonstrating value and sustainability of Web3 in the world of entertainment.
But will these business models take root and become a dominant mechanism for content distribution? Greenberg asserts that a generation adept at the metaverses of Fortnite, Roblox, and Minecraft—acquainted with the concepts of ownership in a virtual world—is the audience of the future of the Web3 entertainment biz.
Bringing to mind a familiar baseball metaphor, Greenberg says Web3 and NFTs aren’t even in the first place. “We’re in batting practice,” he says. “The game hasn’t started yet.” On where things stand now in the blockchain revolution, he adds, “This is like the AOL and CompuServe of what’s coming.”
Pictured above: One of the Krapopolis Chicken NFTs for Dan Harmon’s upcoming Fox show