Nov 4, 2021 - Economy

Fox bets big on blockchain

Photo from Dan Harmon's new Fox animated comedy, Krapopolis, Courtesy of Fox

Fox plans to double down on its investments in blockchain technology by introducing more NFTs (non-fungible tokens) and digital collectibles for its shows and franchises in the coming months, a top executive tells Axios.

Why it matters: Fox Entertainment was the first major TV studio to debut its own blockchain division in May. At the time, the company said it would put at least $100 million behind the effort to build what it hopes will become a major part of its top line revenue growth in the years ahead.

"This is a revenue generating business," said Scott Greenberg, the CEO of Fox's Blockchain Creative Labs division. "There's a huge opportunity in tokenizing content."

  • Citing the success of gaming companies like Fortnite parent Epic Games and Roblox, he also noted, "there's a notion of creating digital economies around brands that we think that can apply."
  • "Imagine earn-to-watch," he said. What the gaming world has shown is that "you can turn your time spent into earnings."
  • Greenberg came to Fox in 2019 through Fox's acquisition of Bento Box Entertainment, the animation studio behind major animated hits, including "Bob's Burgers" and "The Great North." Fox put Greenberg in charge of its blockchain division, given Bento Box's expertise in digital art.

Fox CEO Lachlan Murdoch for the first time publicly acknowledged the new business to investors on Wednesday.

  • "[W]e are very pleased with the early results of our investment in Blockchain Creative Labs," he said on an earnings call.

Be smart: Greenberg sees NFTs and other digital assets as an opportunity to create more fan engagement not just across all of Fox's properties, like Fox Sports, Fox Entertainment and Fox News, but third-party franchises too.

  • Last week, Fox announced that it struck a multi-year deal with the WWE to launch an NFT marketplace, marking its first external partnership for its blockchain division.
  • A few weeks prior, the company launched 'The MaskVerse," its first NFT marketplace, which allows fans of its hit show "Masked Singer" to buy, sell, or trade digital "Masked Singer" collectables with NFTs.

By the numbers: Greenberg says that so far, the "MaskVerse" has driven over 120,000 digital wallet installs and fans have claimed over 120,000 "Masked Singer" NFTs.

  • The investment, Murdoch said during the earnings call, "further highlights the marketing power of the Fox broadcast network to drive new businesses and the creative and entrepreneurial spirit of all of us here at Fox."

The big picture: The NFT craze has taken Hollywood by storm, as major TV and film studios look to make more money off of the shows, movies and franchises they already own.

  • Fox debuted its NFT business in May, ahead of other major studios, and announced that its upcoming series "Krapopolis" — from “Rick and Morty" creator Dan Harmon — would be the first-ever animated series "curated entirely on the Blockchain."
  • In the time since, ViacomCBS, Lionsgate and Warner Bros. have also introduced big NFT drops and plans. Legendary was the first to debut a motion picture art release for "Godzilla vs. Kong" in March.
  • Fox is still one of the very few Hollywood studios to operate its own blockchain division, instead of working with a third-party company to create its NFTs.

What to watch: Fox has yet to disclose any revenue numbers from its blockchain division, but valuations and investments being poured into competitive NFT companies, like Recur — which is working with ViacomCBS — suggest the industry is booming.

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