What is Web3? How could this change Hollywood?
Stoner Cats, CryptoPunks and Bored Apes. Blockchains and metaverses. Non-fungible cryptocurrencies and tokens.
Over the past 12 months, as the world has emerged from pandemic crisis mode, the pop culture verse and the Wall Street verse have been plagued by rhetoric and agreement around a belief in the potential breakthrough of mind-blowing complexity, new Internet-enabled communication, content creation, supply chain management, legal and banking documentation systems. This emerging world has its own nomenclature – the digital version of a velvet rope – but in general it refers to extremely complex computer processing (also known as data mining) technologies and applications that fall under the general rubric “Web3”.
Yet, in simple terms, what is Web3? And perhaps equally important, why apparently everyone in entertainment, finance, media and law started talking about it at cocktail parties and mixes when these pitfalls of pre-pandemic life came back into play? The answer is the only thing that is clear about the world of Web3: money.
“I started paying attention to NFT activity in the middle of the pandemic,” says Chris Jacquemin, WME partner and head of the agency’s digital strategy. “At the end of 2020, the total market revenue for NFTs was $300 million. A year later, it was a $41 billion business.
But back to the question what is it. The term “Web3” broadly refers to the next major evolution in Internet communication designed to combat the monopoly power wielded by Big Tech giants like Facebook, Amazon, Google, and Twitter.
Web1 was learning to send and receive email through CompuServe and AOL accounts during the Clinton administration. Web2 developed the World Wide Web, audio and video streaming capabilities, and social media platforms.
As for Web3: Paul Sweeting, founder of Washington, D.C.-based consulting firm Concurrent Media Strategies, describes it in his recent VIP+ report, “Web3 Demystified,” as “a shorthand for conjuring up a set of ideas and technologies that intersect and overlap. developers hope to be the next iteration of the Internet. At the center of this Venn diagram is the notion of a World Wide Web built on decentralized protocols such as blockchain rather than the massive, centralized platforms and walled gardens running on the proprietary servers that dominate the Web2 version. current.
For the creative community, the capabilities made possible by Web3 technology will pave the way for artists to be paid for their work directly by individuals, which, in theory, will remove the need for middle layers of production and distribution. The digital ledgers created by the impossible-to-reproduce calculations that form the blockchain will be the ultimate arbiter of who owns what – and they create a digital chain that will theoretically allow artists to receive royalties tied to any sale of their assets for all time.
“It’s the last mile of direct-to-consumer sales,” says Jacquemin. “The data and relationships that artists and sellers have with the consumer are very different in a blockchain environment.”
Cryptocurrencies and digital asset sales are the basis of the Web3 concept of business transactions. Propelled by the hype around the promise of Web3 and the big bucks accrued from the sales of NFT creations like Stoner Cats and Bored Ape Yacht Club, the value of Bitcoin, Ethereum and other cryptocurrencies soared in 2021. The market was so white-hot that crypto-ATMs started popping up at gas stations in some urban and suburban areas.
As with anything that soars like a rocket, the crypto was not immune to an IRL crash. As prices fell in the spring, owners selling cryptocurrencies accelerated. It took a lot of hot air in the market. Countless headlines about hackers stealing cryptocurrencies from the myriad of online services that facilitate transactions have also raised big questions about their viability as an alternative to old-school greenbacks and greenbacks. the Federal Reserve.
At the same time, there’s no doubt that Web3 has applications that Hollywood needs to understand, if only to understand how the next generation of consumers expects to be entertained and engaged. NFTs, or non-fungible tokens, are digital identifications that are stored on a blockchain. They certify the authenticity and rights of an owner to specific digital content such as an image or video, or a specific animated character in a franchise such as Stoner Cats or CryptoPunks. NFT holders enjoy fanclub-like benefits that can include broader access, early screenings, and in many cases the right to create their own iterations of the character or asset they own. This philosophy, unsurprisingly, is in direct conflict with the tight control that Hollywood studios have long enjoyed over content.
Those with the mental computing power to study crypto and blockchain say the market is deeply confusing because it is still in its most nascent form. Cryptocurrencies in general were a consequence of the global financial crisis of 2008-09, when trust in big banks was torpedoed by widespread evidence of greed and unethical activity around home mortgages. .
Mike Winkelmann is a graphic designer from Charleston, SC, who hit the jackpot in the NFT marketplace with his digital designs, marketed under his professional name, Beeple.
“People are starting to demand more transparency and ownership of their virtual selves. And that’s the very beginning of that with NFTs,” says Winklemann. isn’t a fully formed ecosystem that brings immediate additional utility and value to my life. Well, of course not. Neither did the Internet in the beginning; it was very difficult to use.
The flip side of distrust of large institutions lies in the collective power of the community. Relationships fueled by online discourse on specialized social media platforms such as Twitch and Discord are important and can be meaningful even for top talent.
“I see IP being generated in a completely new way,” says Tricia Biggio, CEO of Invisible Universe. The animation studio, which just closed a $12 million funding round, is working with partners including Serena Williams, Jennifer Aniston and TikTok dynamo Dixie D’Amelio. Currently, Invisible Universe straddles the worlds of Web2 and Web3, as the company relies on major platforms to distribute its animated short-form content. But the horizon is wide, emphasizes Biggio.
“The same way we used TikTok to build a community very quickly to manage IP and get creative ideas, I think we can do it in a Web3 way to build affinity for our content” , says Biggio. “Web3 talks a lot more about what it means to collaborate creatively, what it means to own an asset and [to what extent an owner] becomes involved in creation.
WME’s Jacquemin cites similar themes highlighting the potential he sees in the WME Pixel Vault client. The Web3-centric content operation is growing by leaps and bounds, not from ticket sales or Nielsen ratings, but from hot NFT auctions and gains in microchip processing power.
Jacquemin and his team firmly believe that Hollywood need only eliminate the jargon to embrace Web3 as another form of commerce, radical as it may seem today.
“Just as streamers have become an alternative to traditional networks, [Web3] is another iteration of a platform,” says Jacquemin. “The economics are quite substantial for some of these projects. It’s not spending $5,000 to make a YouTube video. These are companies that want to work with mainstream filmmakers and writers.
Shirley Halperin contributed to this report.