NFT Land Grows From Content Marketplace to IP Licensing Source
NFT Business Views by Clyde F. Smith
An NFT Entrepreneur Newsletter by Clyde F. Smith
NFT-Native Intellectual Property (IP)
There’s an interesting development in NFT Land involving intellectual property, marketing and content creation. In 2021, we saw artists making art and turning it into NFTs, companies big and small working with artists or examining the archives for content to turn into NFTs and concerns about content jackers stealing art and turning it into NFTs. Basically, a heck of a lot of content was being created or repurposed to bring into NFT Land.
If you check out AdAge’s awesome mini-blog, How NFTs Are Used By Markets — A Continually Updated List, you’ll see that such activities still dominate. But, in 2021, we also began seeing content born in NFT Land being licensed for potentially all the things for which one might license art and media for including art on objects, art for marketing and art for narrative content creation. This development is taking two intertwining paths, a traditional IP licensing route and a more experimental IP rights ownership route.
Note that purchasing art in NFT form, just as in any other form, does not automatically convey IP ownership rights. Given that more money can often be made by licensing rights for ads and content creation than by just selling the art, this development is potentially a huge deal.
Bored Ape Yacht Club (BAYC)
A lot of the current IP action began with Yuga Labs’ Bored Ape Yacht Club which took the idea of conferring IP rights to NFT owners to a whole new level due to the 10k collections success. If BAYC had not done so well, it would not now be the poster child for buying an NFT and building a mini-empire off the IP rights. But, BAYC continues to outperform showing a great potential as the base for broader creation.
There are various experiments going on with NFTs and IP. Important examples include Dapper Labs NFT License and all sorts of activity involving music and IP rights. However, BAYC’s decision to allow owners to essentially own and profit off their Bored Apes took a huge step forward in what’s possible.
BAYC owners are finding a variety of ways to use or license their Bored Apes for everything from cannabis packaging, especially big in California, to comics and beer.
While I think this open approach is potentially disastrous in the long-term, due to overexposure and poor licensing choices, in the short-term it can be very profitable. This approach also shows the creative energy that can be released by being able to decide for oneself how to monetize one’s Ape.
I don’t expect Bored Apes to be the next Disney, but it’s clear that there’s a market for creations born in NFT Land and a growing number of options to license and merchandise those creations.
However, BAYC owners don’t get to use the brand Bored Ape Yacht Club. The company reserves that right for themselves so they can do things like collabing with The Hundreds and signing with legendary manager Guy Oseary. While Larva Labs may have signed with United Talent Agency first, BAYC ownership rights make Larva Labs seem behind the times.
World of Women (WoW)
A more recent NFT signee with Guy Oseary is the World of Women 10k NFT collection and community. Like BAYC, WoW owners have similar IP exploitation rights so both NFT owners and the company can profit from licensing.
While one might think the open-ended nature of the licensing possibilities would cause some brands to step back, WoW now has a deal with Reese Witherspoon’s Hello Sunshine “to develop WoW characters into feature films, scripted and unscripted TV shows and educational events.”
For WoW, the association with Witherspoon’s brand helps connect it to a forward-looking corporate realm that fits its art. Case in point, KPMG in Canada recently bought a World of Women NFT. Very upstanding brands all around! Hope none of those NFT holders do anything untowards with their IP options.
It’s important to recognize that 10k collectibles are not the only kind of NFTs available for licensing. In fact, a great deal of original art and graphic creations are available that could potentially support much richer work than an endless series of media creations based on an endless series of PFPs and avatars.
Ben Mauro’s series of graphic novels, released as NFTs, is an excellent example of such work though one could discuss 1 of 1 crypto artists as well. In addition, it does have a physical component though its marketing seems to emphasize the NFTs.
However, Mauro now has a deal with Arad Productions to create a film based on the Huxley graphic novels. A lot is still to be determined but a metaverse experience is also planned. Interestingly, Arad Productions’ Avi Arad, who co-founded Marvel Studios and produced many Marvel films, is also Mauro’s dad. Nevertheless, this is a solid example of a strong group of professionals taking work launched in NFT Land and exploiting the IP for the film industry.
Where Is All This Going?
Clearly, the ownership approach taken by BAYC and WoW will lead to some surprising outcomes. It’s very inspiring, in many ways, though potentially disastrous given the fact that some really awful uses of the BAYC and WoW art will occur because sometimes that makes money.
But the fact that both BAYC and WoW can also sign deals with a figure like Guy Oseary, while having such open-ended approaches to IP, is kind of a trip. It’s a great example of how web3 approaches can lead to true win-win outcomes and resolve previously unresolvable binaries.
More broadly, regardless of approaches to ownership and IP exploitation, NFT Land is becoming a source of IP for content creation. It’s easy to imagine NFT art showing up everywhere with no reference to NFTs. That’s already happening with BAYC.
One particularly rich area of activity will be NFT IP being used in the film and tv industries. Making a movie takes original art, narrative or not, and creates a version of the story around which a much larger community can grow. That sets the stage for all sorts of licensing and merchandising opportunities that can emerge organically over time.
Note that just as social media stats have been used in the music industry to identify musicians to sign, NFTs on the blockchain already provide many new data sources for evaluating the appeal of creative content.
At the same time, at least for awhile, launching content in NFT Land with the intent of catching Hollywood’s eye may well be a winning approach. Right now they’re paying attention to the space and that will grow with the first commercially successful media releases. It’s an approach I believe certain projects have already taken without revealing.
More Ahead on NFTs and IP
Coming up, a new piece of mine based on an interview with Scott Broock, Chief Strategy Officer at DNABLOCK. We discussed future plans based on recent funding news and DNABLOCKS’ plans for supporting NFT creators.
I’ll be following up with related coverage in future NFT Entrepreneur newsletters as well. I think IP and content licensing and merchandising will be a growing theme of 2022 in NFT Land and an important part of the long-term landscape.
Originally published at https://nftentrepreneur.substack.com on March 2, 2022.